CBN hints on milk importation ban

…Retains MPR at 13.5%

By Etuka Sunday

The Central Bank of Nigeria (CBN) yesterday disclosed the plan of the Federal Government to ban the importation of milk into the country.
CBN governor, Mr Godwin Emefiele disclosed this shortly after the Monetary Policy Committee (MPC) meeting in Abuja.
Mr Emefiele said, for over 60 years, Nigeria has been importing milk and that as at today, the import of milk annually stands at between
$1.2billion and $1.5billion.
He said: “Yes, the report that there are attempts by CBN to restrict FX on importation of milk into the country is correct. Very correct
because we believe that milk is one of the products that can be produced in Nigeria. We have seen the importation of milk before some of us were born, over 60 years.
“For over 60 years, Nigeria has been importing milk. Today, the import annually stands at between $1.2billion and $1.5billion. That is a very high product import into the country. Given that it is a product that we are convinced can be produced in the country.
“And let’s ask ourselves the question, what does it really takes to produce milk-a cow, water for the cow to drink, grass for the cow to eat and the cow positioned in a place without roaming about, that cow gets fact and you can take milk out of it,” he said.
The CBN boss said, the bank would not allow importation milk into the country but would support backward integration, which he believes would end the herder, farmer clashes.
Meanwhile, he said, the Monetary Policy Committee decided unanimously by a vote of all members present to retain the Monetary Policy Rate (MPR) at 13.5 per cent and to hold all other policy parameters constant.
He said, the decision was informed by the conviction of members that key macroeconomic indicators are trending in the right direction.
Consequently, he said, the MPC unanimously voted to: Retain the MPR at 13.5 per cent; Retain the asymmetric corridor at +200/-500 basis points around the MPR; Retain the CRR at 22.5 per cent; and Retain the Liquidity Ratio at 30 per cent.
He said, available data from the National Bureau of Statistics (NBS) showed that real Gross Domestic Product (GDP) grew by 2.01 per cent in the first quarter of 2019, driven by the non-oil sector, compared with 2.38 and 1.89 per cent in the preceding and corresponding quarters of 2018, respectively.
He said, “the Committee noted the continued but moderate expansion in the economy as indicated by the Manufacturing and Non-Manufacturing Purchasing Managers’ Indices (PMI), which grew for the 27th and 26th consecutive months in June 2019.
“The indices stood at 57.4 and 58.6 index points, respectively, in June 2019. Staff
forecast indicate a 2.11, 2.39 and 2.56 per cent growth in GDP in Q2, Q3 and Q4 2019, respectively, expected to be driven largely by the non-oil sector.
“The Committee, however, noted that the downside risks to the growth projections to include low credit to the private sector;
high unemployment; delayed intervention of fiscal policy as well as low revenue and fiscal buffers, amongst others.
“The continued intervention by the Bank in the real sector is, however, expected to partly ameliorate the downside risks only in the short-run, while sound fiscal policy is expected to drive growth in the medium to the long-run,” he said.
On the domestic economy, he said, output growth in 2019 is expected to remain weak, peaking at 2.27 per cent, while inflation is projected at 11.37 per cent by the CBN staff projections by end-2019. The underlying arguments in favour of this forecast include: favourable oil prices; stable exchange rate; moderate inflationary pressures; enhanced flow of credit to the private sector; sustained CBN interventions in the real sector; effective implementation of the Economic Recovery and Growth Plan (ERGP); building fiscal buffers; and improved security in the food producing areas of the country.
On the African Continental Free Trade Agreement (AfCFTA), he said, “the Committee urged the Federal Government to put in place measures to aid the economy in realising the benefits and full potentials of that Agreement.
“In particular, it noted the need to resuscitate moribund industries in Nigeria and improve key infrastructure in order to strengthen the productive base of the economy, create job opportunities as well as boost exports.
“The Committee noted the positive developments towards the creation of a common currency in the West African Zone by January 2020 and commended Government and the Central Bank for pushing forward the initiative.
“The Committee, however, enjoined the Bank to ensure that Nigeria is properly positioned to maximise the benefits of monetary integration,” he said.