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CBN lifts FX restrictions on dairy products

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Central Bank of Nigeria (CBN) has lifted forex restrictions on the importation of milk and dairy products in the country in a move aimed at price cut.

This is contained in a circular with the reference number TED/FEM/PUB/FPC/001/010 dated March 12, and sent to all banks.

The CBN’s directive to banks means that importers can now access foreign exchange at official Nigerian Autonomous Foreign Exchange Market (NAFEM) for transactions related to milk and dairy products, and this is expected to have far reaching implications for the dairy industry, which may lead to increased competition, improved availability of dairy products, and enhanced market access.

The latest development was  further confirmed by Zenith Bank in a recent notice to customers.

The statement reads in part, “Please be informed that the Central Bank of Nigeria (CBN), through its circular Ref No: TED/FEM/PUB/FPC/001/010, dated March 12, 2024, has provided an update on eligible items for foreign exchange (Non-Valid for FX).

“In light of the preceding, please note that the restriction on foreign exchange for importing dairy products and its derivatives to all entities except selected companies has been lifted.”

The CBN, in February 11, 2020 restricted foreign exchange allocation for milk importation exclusively to six designated companies within Nigeria, and noted that the initiative aimed to stimulate domestic milk production.

The beneficiary companies included Nestle, FrieslandCampina WAPCO Nigeria, Chi Limited, TG Arla Dairy Product Limited, Promasidor Nigeria, Nestle Nigeria, and Integrated Dairies Limited.

However, on October 12, 2023, the apex bank announced lifting the ban on 43 items previously restricted from accessing forex.

A report by the CBN indicated Nigeria spends about $1.5 billion importing dairy products annually.

The circular reads, “Lifting of Restrictions on Milk and Dairy Products importation

“Please be informed that the Central Bank of Nigeria, through its circular, Ref no ted/fem/pub/fpc/001/010 dated March 12, 2024 has provided an update on eligible items for foreign exchange (non-valid for FX).

“In light of the foregoing, please note that the restriction of FX for the importation of dairy products and its derivatives, to all entities except selected companies has been lifted.

“Also note that any entity that meets the necessary extant regulation requirements is allowed to source for FX at the NAFEM for transactions.”

Allowing any entity that meets the necessary extant regulation to source for FX from the official window as exemplified in the new circular marks a shift in the country’s trade policy, and it will impact the sector in many ways.

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