Nigeria Spends $1.5bn Annually To import Milk – Emefiele


Chidi Ugwu

Abuja – Governor of Central Bank of Nigeria, CBN Godwin Emefiele has disclosed that Nigeria spends between $1.2 billion and $1.5 billion annually to import milk.

He made the disclosure yesterday during a press briefing after the bi-monthly Monetary Policy Committee MPC meeting in Abuja.

Emefiele who said that the amount is unacceptable to the country urged the importers of milk to urgently embark on backward integration of milk production as there is a plan by the apex bank to include milk among 43 items restricted from forex because it can be produced in the country to grow the economy.

He said that the Committee retained all the parameters of monetary policy; the monetary Policy Rate MPR at 13.50%, Cash Reserve Ratio, CRR 22.5%, and Liquidity Ratio LR was retained 30% while the asymmetric corridor was equally held constant at +200 /-500 basis points around the MPR.

Mr. Godwin Emefiele who read the communique at the end of the two-day MPC meeting reiterated that he was convinced that milk was one of the products that could be produced in this country; hence there would not be a need for importation.

According to him, “We have cows, if the cows are positioned in places without roaming around and they are given water to drink and grass to eat, they will be able to produce quality milk.”

The CBN boss also revealed that the Committee reviewed developments in the global and domestic macro-economy and local economic developments to arrive at the decisions.

“It noted that the global environment is overwhelmed with vulnerabilities and financial fragilities. Inflation in the advanced economies is trending downwards and significantly below the long-run objective, necessitating the adoption of accommodative monetary policy, the global economy is poised to see another round of loose monetary policy.” He stated.

Emefiele said that the available data from the National Bureau of Statistics (NBS) showed that real Gross Domestic Product (GDP) grew by 2.01 per cent in the first quarter of 2019, driven by the non-oil sector, compared with 2.38 and 1.89 per cent in the preceding and corresponding quarters of 2018, respectively.

According to him, “the Committee noted the continued but moderate expansion in the economy as indicated by the Manufacturing and Non-Manufacturing Purchasing Managers’ Indices (PMI), which grew for the 27th and 26th consecutive months in June 2019. The indices stood at 57.4 and 58.6 index points, respectively, in June 2019.”

“The Committee, however, noted that the downside risks to 3 the growth projections to include low credit to the private sector; high unemployment; the delayed intervention of fiscal policy as well as low revenue and fiscal buffers, amongst others. The continued intervention by the Bank in the real sector is, however, expected to partly ameliorate the downside risks only in the short-run, while sound fiscal policy is expected to drive growth in the medium to the long-run.”

The CBN governor also noted that the net liquidity position and interest rates in the economy reflected the impact of liquidity injections and the Bank’s liquidity management operations associated with fiscal federalism, a transformation of maturing CBN Bills, Open Market Operations OMO auctions and foreign exchange interventions.

Just as the monthly weighted average Inter-bank call and Open Buyback (OBB) rates, oscillated within the MPR corridor, increasing to 8.38 and 8.71per cent in June 2019 from 5.14 and 8.34 per cent in May 2019, respectively.

Emefiele explained that the Committee noted that there was a need to boost output growth through a sustained increase in consumer credit and mortgage loans and granting loans to Small and Medium Enterprises companies.

The MPC called on the fiscal authorities to expedite action on expanding the tax base of the economy to improve government revenue and stem the growth in public borrowing. It further urged the fiscal authorities to build fiscal buffers to avert macroeconomic downturn in the event of a decline in oil prices.

The Committee also called on the Bank to intensify efforts to encourage Nigerians in the diaspora to use official sources for home remittances, noting that the effort will complement other measures geared towards improving Nigeria’s current account balance.

It enjoined the Bank to consider introducing incentives such as the reduction of charges on diaspora home remittances into Nigeria. On the African Continental Free Trade Agreement (AfCFTA), the Committee urged the Federal Government to put in place measures to aid the economy in realising the benefits and full potentials of that Agreement.

In particular, it noted the need to resuscitate moribund industries in Nigeria and improve key infrastructure in order to strengthen the productive base of the economy, create job opportunities as well as boost exports.

The Committee noted the positive developments towards the creation of a common currency in the West African Zone by January 2020 and commended Government and the Central Bank for pushing forward the initiative. The Committee, however, enjoined the Bank to ensure that Nigeria is properly positioned to maximise the benefits of monetary integration.

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