According to NECA, going ahead with the restriction now will be catastrophic for the nation’s economy.
The Director-General of the association, Mr Timothy Olawale, made this call in Lagos on Thursday, while speaking at a business forum on the need to measure the suitability of the policy.
The details: The NECA director-general said the CBN should further engage stakeholders in extensive consultation on the issue before implementation, as it would enable the apex bank to gauge the merits and demerits of the policy in the long term.
“While employers understood and acknowledged the imperative for backward integration in the long term, the proposed foreign exchange restriction is too sudden and has the potential of crippling businesses which are already struggling.
“Without prejudice to the long-term benefits of backward integration, the short-term consequences, without a deliberate and acceptable plan by critical stakeholders can be catastrophic for local businesses in the value-chain,” he stated.
Earlier development: In a recent circular released by the apex bank, the CBN Governor, Godwin Emefiele, reiterated the bank’s plan to restrict FOREX for importation of milk and other dairy products.
Emefiele said Nigeria spends between $1.2 billion to $1.5 billion annually on importation of milk and other dairy products.
- The CBN governor noted that although there were some successful attempts at producing milk locally, the vast majority of the importers still treat this national aspiration with imperial contempt.
- Subsequently, reactions have trailed the announcement from various stakeholders concerned, thus, labelling the policy as political and sudden.
- While the CBN has through various media reiterated its stand on the policy, industry analysts have called for a review of the policy in order not to complicate certain economic realities.
The way forward: The NECA boss stated that while backward integration was a welcome development, a long-term plan for massive investment would have to be made for the purpose of importing dairy cows for milk production.
According to him, the cow husbandry in Nigeria has not been proven to be good for milk production. He added that the consequences of the planned policy by the apex bank will result to:
- the unpatriotic activities of smugglers to import milk and loss of revenue for the government;
- attendant social consequences, such as massive job loss; and
- the adverse effect of capacity under-utilisation in the entire food and beverage sector.
In the meantime, NECA has emphasized that there is a need for the apex bank to reexamine the timeline for the implementation of the policy.