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CBN to Nigerians: We’re ready to provide loans for those who want to go into cattle rearing business

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…Retains MPR at 13.5 %

By  Emma Ujah – Abuja Bureau Chief

The Central Bank of Nigeria (CBN) has announced a new policy to end of milk into the country just as it assured that the bank was ready to provide loans for those who want to go into the cattle business.

RUGA cattle CBN
Herdsmen along with their cows wait for buyers at Kara Cattle Market in Lagos, Nigeria, on April 10, 2019. – Kara cattle market in Agege, Lagos is one of the largest of West Africa receiving thousands of cows weekly due to the massive consumption of meat in Lagos area. (Photo / AFP)

Briefing journalists at the end of the Monetary Policy Committee (MPC) meeting in Abuja yesterday, the Governor of CBN, Mr. Godwin Emediele, said that the nation could no longer continue to spend between $1.2-$1.5 on milk importation, annually.

He said that the nation had the capacity to produce its milk requirements and that CBN was ready to give loans to those interested in ranching and other businesses in the livestock value chain.

On milk importation, Mr. Emefiele said, “We believe milk is one of the products that can be produced in Nigeria today. We have seen the importation of milk into Nigeria before many of us were born, precisely over sixty years. West African Milk and Friesland milk, the foremost milk has been doing it for over sixty years.

“They have been importing milk into Nigeria for over sixty years. For over sixty years, Nigeria has been importing milk, the import of milk annually stands at between $1.2 to $1.5 billion.

“That is a very high import product into the country, given that it’s a product that we are convinced can be produced in the country.

Cows produce little milk due to roaming

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“Let’s ask ourselves the question: What really does it take to produce milk? Get the cow and give the cow plenty of water to drink and let the cow eat a lot of grass and the cow positioned in a place without roaming about, that cow gets fat and you can take milk out of it.

“The reason some say our cows are not producing much milk is that our cows roam about. They don’t have water to drink.

Under the pastoral arrangement, you find out that during the raining season you find out that, they are somewhere. When the rain recedes, and dry and hot seasons come, they begin to move from where they were.

“As they move just like they are cows, they are not human beings, they consumed wherever they find on their way. And unfortunately, in that process, they create destruction to farm products and farm produce in the country.”

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Loan for ranching

The CBN boss assured that the bank was ready to provide loans for those who want to go into the cattle business.

His words, “By the time we restrict you if you need a loan to acquire land we’ll give you. If you need a loan to grow your grass, we will give you. To produce water, we will give you a loan. But that you will continue to import milk into the country, I think we are getting to the end of the road. I will repeat, we are really getting to end of the road.

The era of restriction of forex for importation of milk is coming, and it will come soon and sooner than expected.”

Uncooperative milk companies

Mr. Emefiele lamented that the milk companies had refused to cooperate with the CBN in the last three and a half years when they were advised to adopt backward integration, in that regard.

According to him, “About three and half years ago, when the policy on restriction of forex started, we considered including milk in the list of items under restriction from forex, but we conjectured that based on sentiment, some people are bound to express, that we should be very careful.

“We called in the management of the oldest milk importing into Nigeria, WAMCO to Central Bank office in Lagos. We held at least three meetings with them.

Their MD came with one of the ladies. And we held those meetings, we told them this would have happened but we decided not to allow it to happen, that we were trying to use the opportunity to appeal to them to do backward integration.

Integrate backward and begin the process of development and produce your milk in Nigeria.

“There are obviously two schemes. Either the West Africa Milk or the milk importers acquire land and begin to graze their own cows and fatten them and get the milk, and then they can also be complemented by pastoralists who own their own small holder’s cows under a small farming holder arrangement, they can also get milk from them.

“Indeed, they could also support the pastoralists, get them concentrated in one place instead of moving around. Buy them facility like water, hospitals, schools. If you are in a community and you want to enjoy the proceeds of that community, there is nothing wrong in providing certain to those communities to blossom, provided the grass even if you sell the grass to them.

“Unfortunately, after three years, nothing has happened. Three weeks ago, we had another meeting, where we said we need to take stock of what you guys are doing because we can no longer continue to spend close to $1.2 to $1.5 billion importing milk to the country, a product we can produce.

“To some extent, they should help us also to reduce the rate of herder/ farmer conflict.

Perhaps, if you had started this journey three years ago with us, whereas the herders/ farmers conflict that we see today would not have been as intense as it is this time.”

Our policies must be respected

“They went to their association, Manufacturers Association of Nigeria, Lagos Chamber of Commerce. I have heard Muda Yusuf commenting about milk importation.

Nigeria belongs to us, when we have a policy, we want people to respect the policy of this country.

“During another meeting, WAMCO came and said they will support the activities of pastoralists. After that meeting, there was another meeting WAMCO changed its position, they have spoken to their bosses and their principals and those ones told them they are not going to change their position or policy. We will not change our policy to produce milk in Nigeria.”

Mr. Emefiele also said that the CBN had to look into how the banks can be refocused to do more of lending to real sector to grow the economy, “the only set of institutions or persons, by law that can conduct financial intermediation, real intermediation from the surplus side to deficit sectors are banks and if they fail in that regard, then we have a problem.”

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He said that the guideline that prescribed the minimum lending for banks, was issued because the apex bank would “no longer allow a situation where, when banks receive deposit from customers, all they do is just bring the money to CBN or government, invest in instruments after 90 days, 180 days, one year they come to CBN, we cut them a cheque and they put it as income into their balance sheet and they declare billions of naira.”

The governor announced that the Monetary Policy Rate ( MPR) was retained at 13.5 per cent, along with all other parameters.

Vanguard

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