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Tuesday, 11 February 2020 00:00

CBN Exempts Friesland, Nestle, 4 Others from Forex Restriction

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The Central Bank of Nigeria (CBN) has exempted FrieslandCampina WAMCO Plc, Nestle Nigeria Plc and four other milk producing companies from the foreign exchange (forex) restriction it earlier placed on them on the importation of the product into the country.

In a circular signed by the CBN Director, Trade and Exchange Department, Mr O.S. Nnaji, to all authorised dealers published on its website on Tuesday, February 11, the apex bank said Friesland Campina WAMCO Nigeria; Chi Limited; TG Arla Dairy Products Limited; Promasidor Nigeria Limited; Nestle Nigeria Plc (MSK only); Integrated Dairies Limited are the only companies exempted from the restriction for now.

According to the statement, the move was as part of the federal government’s plan to boost local production of the dairy product as part of the bank’s backward integration programme.

“As part of efforts to increase local production of milk, its derivatives and dairy products, the Central Bank of Nigeria has engaged with some companies in the industry who have keyed into the bank’s backward integration program to enhance their capacity and improve local milk production,” the statement read in part.

It then directed all authorised dealers that all Forms ‘M’ for the importation of milk and its derivatives shall only be allowed for the exempted six companies.

The bank clarified that, “For the avoidance of doubt, all established Forms ‘M’ for the importation of milk and its derivatives for companies other than the above for which shipment has not taken place should be cancelled immediately.”

The exempted companies began investments in local milk production as part of the central bank’s backward integration plan when the CBN governor, Mr Godwin Emefiele, confirmed that there were plans to restrict forex for milk importation in July 2019, saying the bank was convinced that the product can be manufactured in Nigeria.

In November 2019, FrieslandCampina WAMCO Nigeria Plc and the Niger State Government signed a Memorandum of Understanding (MoU) for 10,000 hectares of land for milk production. The agreement will see the dairy company utilize the Bobi Grazing Reserve in the Northern state for its Dairy Development Programme.

The restriction placed on the importation of the product according to the CBN Governor is expected to see a reduction in over $1.2 billion spent every yearly to import milk into the country.

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