The Central Bank of Nigeria (CBN) has told lenders to stop processing milk imports on a credit basis, bankers said on Tuesday, after the bank last month said would ban access to foreign currency for the imports to spur local production.
Nigeria spends between $1.2 billion to $1.5 billion annually to import milk, the central bank says, which said in July it would add milk imports to its restricted list for dollar sales. The bank did not say when the ban comes into force.
In a circular to lenders, the central bank said milk imports will no longer be eligible under payment terms known as “bills for collection” which allowed the importer to buy on credit. Importers would need to fund their naira accounts and open letters of credit, bankers said.
Bankers said the central bank wanted to streamline payment modes for milk imports.
Industry groups had been lobbying the government against the bank’s planned dollar curb, arguing that domestic milk production was not enough to meet local demand.
Nigeria relies on imports for most of what its 180 million population consumes. In 2015, the central bank restricted access to forex for 41 items which it said can be produced in Nigeria.