COMFORT EKELEME
The Central Bank of Nigeria (CBN) has concluded plans to restrict foreign exchange on the importation of milk in order to reduce the amount of money spent on its importation.
CBN Governor, Godwin Emefiele who disclosed this to newsmen after the two- day meeting of the Monetary Policy Committee (MPC) in Abuja, said the country spent between $1.2 and $1.5 billion dollars on importation of milk.
“We believe that milk is one of those products that can be produced in Nigeria. Milk importation has been going on in Nigeria for over 60 years. If you Google West African Milk or Friesland Campina today, they say that they have been importing milk and that they have been in Nigeria for over 60 years.
“Today, the import of milk annually stands at $1.2-$1.5 billion. That is a very high import product into the country. Given that it is a product that we are convinced that it is a product that can be produced in Nigeria.
“The reason some say that our cows are not producing much milk is that our cows roam around, they don’t have water to drink. When the policy on the restriction of FX started, we considered including milk to the list. Then we thought that based on the sentiments that people would show that we should be careful,” he said.
Emefiele said the bank held meetings with leading milk producers in the country to encourage them to begin the process of producing milk in 2016. However, he said there was no significant progress on the part of the companies.
“When we have a policy, we want people to respect the policy of this country. We are saying the amount we spend on milk in this country is too high, we need to reduce it. We are determined to make milk production in Nigeria a viable economic proposition. If you need a loan to acquire land, do artificial insemination, grow grass or even provide water, we will give you.
“We are getting to the end of the road of milk importation in Nigeria. The era of restriction of forex for the importation of milk is very close, sooner than they expect,” he maintained.
The Governor noted that restricting FX on importation of milk will make it a viable proposition locally and reduce farmers’ herders clash.
Emefiele also said September 30 this year has been set as deadline for Deposit Money Banks (DMBs) to comply with the policy on Bank loan deposit ratio, which presently stands at 57 per cent or have 50 per cent of their deposits ploughed into Cash Reserve Ratio (CRR).
According to him, the country’s loan deposit ratio at 57 per cent was too low compared to other climes like Brazil, USA, Japan, South Africa and Kenya that hover between 75 per cent and 100 per cent.
The apex bank stressed the need for deposit money banks to play their roles as financial intermediators and catalyze growth in the country
The Governor appealed to the government to address security challenges in some parts of the country to boost agricultural production and reduce inflation.
Meanwhile, the MPC again left the Monetary Policy Rate unchanged at 13.5 per cent.
Emefiele, announced the decision of the committee at the end of the meeting held at the apex bank’s headquarters in Abuja.
He said all the 11 members that attended the meeting agreed to retain the current monetary policy stance, adding that apart from the MPR that was retained at 13.5 per cent, the committee decided to hold the CRR at 22.5 per cent.
Also retained are the Liquidity Ratio which was left at 30 per cent; and the Asymmetric Window which was left at +200 and -500 basis points around the MPR, the interest rate at 13.5 per cent as well as all other monetary policy parameters for the second time.
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