Why we must restrict importation of milk, by CBN

• As apex bank retains MPR at 13.5%, CRR 22.5%
The Central Bank of Nigeria (CBN) yesterday said it will restrict access to foreign exchange for importation of milk into the country, insisting that there are abundant resources to produce milk in Nigeria.

CBN Governor Godwin Emefiele stated this at a media briefing on its Monetary Policy Committee (MPC) meeting attended by all eleven members of the committee in Abuja.His words: “We believe milk is one of the products that can be produced in Nigeria today. I have asked questions at different forums that we have seen the importation of milk into Nigeria before many of us were born over 60 years ago. 

“West African Milk and Freisland Milk have been importing milk into Nigeria for over 60 years. Today, milk imports stand at between $1.2b and $1.5b annually. That is a very high import product, given that it’s a product that we are convinced can be produced here. 

“What really does it take to produce milk? Get cow and give them plenty of water to drink and let them eat a lot of grass and then position them in a place that they don’t roam about. Such cows get fat and we take milk out of them.”He charged the management of milk companies in Nigeria to support the policy, adding that local production of milk would reduce persistent clashes between farmers and herdsmen. 

Emefiele said the MPC retained Monetary Policy Rate (MPR) at 13.5 per cent, saying all 11 members at the meeting agreed to retain the current monetary policy stance. He said apart from retaining the MPR at 13.5 per cent, the committee held the Cash Reserves Ratio (CRR) at 22.5 per cent.

The CBN also retained the Liquidity Ratio at 30 per cent and the Asymmetric Window at +200 and-500 basis points around the MPR.This is the third time the MPC would be retaining all key benchmark monetary policy parameters, having held the rates constant in March and May. 

Explaining the rationale behind the decision, he said given recent happenings in the external sector and the fact that inflation keeps moderating, tightening monetary policy should not be an option at this time.

On the decision to retain the current monetary policy position, Emefiele said the MPC observed that given the recent actions of CBN’s management on the prescription of minimum lending thresholds for banks, it was safe to assume that this action, aimed at stimulating credit growth to the real sector, would increase credit delivery and accelerate investments and economic growth.

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