In a circular to banks on Tuesday, the CBN said milk imports will no longer be eligible under payment terms known as “bills for collection” which allowed the importer to buy on credit. Instead, importers would need to fund their naira accounts and open letters of credit, bankers said.
Bankers said the central bank wanted to streamline payment modes for milk imports.
The CBN governor, Godwin Emefiele, had said in July that the Central Bank would soon restrict the availability of foreign exchange to milk importers, saying that milk is a product it believes can be produced in the country.
According to the CBN, Nigeria spends about $1.2bn to $1.5bn per year on milk imports which it says could be better used in diversifying the economy away from oil.
Adding to the CBN’s new policy directive on milk imports, President Muhammadu Buhari had on Tuesday, August 13th directed the CBN to stop making available forex to importers of food items, saying that the directive is to ensure the steady improvement in agricultural production and to attain full food security.
Industry groups have been lobbying the CBN and the Nigerian government to halt the implementation of the programme as domestic production was not enough to meet local demand.
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