The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has expressed concern that the removal of import restriction on dairy products could push the cost of the products higher.
Reacting to the development, president of NACCIMA, Dele Oye, in a statement, said the concern was particularly against the backdrop of the naira’s current depreciation and the inconsistencies observed in customs duty payment.
He further said the restoration of such policy could also result in the decline of local production.
The Central Bank of Nigeria (CBN) recently notified banks of its decision to remove the restrictions on access to FX for the importation of dairy products, three years after the CBN added milk and dairy products to the list of items not eligible for FX.
The NACCIMA president, acknowledged the CBN’s efforts to refine trade policies in alignment with the evolving economic landscape, saying the decision to lift restrictions on dairy importation by all entities, barring selected companies, suggests a strategic move towards liberalising the sector, which is commendable from a free-market perspective.
He, however, said NACCIMA as a professional body deeply invested in the growth and stability of Nigeria’s economy, was concerned about the potential ramifications of this policy change.
“The depreciation of the naira has already placed a significant burden on importers, with the increased cost of foreign exchange reflecting on the final prices of goods and services.
“The recent policy shift, while potentially increasing competition and broadening market access, could also exacerbate this burden, leading to higher retail prices for milk and dairy products, ultimately affecting the end consumers.
“In addition, inconsistent customs duty payments have been a significant challenge for businesses in Nigeria. This inconsistency not only hampers the ease of doing business but also creates an unpredictable trading environment.
“A policy change of this magnitude requires a concomitant strengthening of customs regulations to ensure that all stakeholders are on a level playing field.”
Oye recommended a phased approach that would allow domestic producers to adjust to the new competitive landscape while preserving the value of the naira.
“This approach should be coupled with a robust support system for local dairy farmers to boost domestic production, thereby reducing over-reliance on imports in the long term,” he added.
“Additionally, harmonising customs duty payments to eliminate disparities and foster transparency will be critical to ensuring the success of this policy.”
Oye said the association “strongly advocates for measures that safeguard the stability of our national currency and promote fair trade practices.”
