Stakeholders Calls for Regulatory Engagement to Reduce Business Risk

Godwin Emefiele CBN Governor

Regulatory risk has been attributed as major reason businesses are not triving and surviving in Nigeria. This was the views of stakeholders in the organized private sector (OPS) and some members of the civil society at a program tagged regulatory conversations in Lagos.

The focus was on foreign exchange restrctons on food imports and implicaton for regulating and growng the nigeran economy.  Addressing the financal press, Mr Soji Apampa chief executve officer of Integrty organsation / Convention on Business Integrity explained that the reason for the engagement is to draw attention to policy makers on how some of their policies are leading to corruptions in the system.

Apampa signhted the recent restriction of forex to importers of milk by the Central Bank of Nigeria (CBN), pointing out that while its appears like restriction, in actual sense it’s an indirect ban on milk importation,  Noting that most banks, would not want to process Form M for any product on the CBN forex exclusion list.

The Director General Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, was among those that spoke during the briefing, said though the commitment of the CBN to the backward integration agenda of the Federal Government is laudable, restriction of foreign exchange to milk importation would do more harm than good, both to investors and the citizens.

He urged the CBN to engage dairy industry investors in order to save the economy of the consequential shocks, business disruptions, investment dislocations, and job losses. Yusuf pointed out that since there are no dairy cows in the country.

Funmilayo Oyefusi, Director, Human Resource and Organisational Effectiveness actionaid, was of the view that stakeholders in the milk value chain would have been engaged and given a time frame for necessary logostic to be in place before the forex restriction, because it will lead to scarcity and puts price of milk up and out of the reach of the poor.

Adding that Nigeria needs to immediately triple current production of milk, because we are still battling with number of children less than 5 years with chronic malnutrition, with stunting or low height for age.

Stressing that “The infrastructure to provide a replacement of what is being banned is not there. Even when we have cows with high milk production, where is the power to store? Where is transportation/infrastructure system to sustain the various parts of the value chain? They need to give like 5-7 years, like it’s done in other places before implementation”

The Managing Director of Proshare Femi Awoyemi, that chaired a panel of discussants, drew the attention of the audience to the fact that government is currently have liquidity challenge, and in balancing it with economic activities there is need for regular engagements with key actors in the economy for amicable solutions.  

However, CBN, Governor, Godwin Emefiele,  at the end of the Monetary Policy Committee (MPC) meeting In July 2019, said the apex bank is determined to go ahead with the policy to help conserve between $1.2 billion and $1.5 billion the country spends on the importation of milk every year.

“we wish to reiterate that we remain ready and able to provide the needed finance to enable investors who genuinely want to engage in milk production” although there have been some successful attempts at providing milk locally, the vast majorty of the importers still treat this natonal aspiration with imperial contempt”.   

“For the avoidance of doubt, milk importation is not banned. Indeed the CBN has no such power. All we will do is to restrict sale of forex for the importation of milk from the Nigerian foreign exchange market”.

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