NACCIMA kicks over CBN’s ban lift on FX access for importation

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has condemned the lifting of the foreign exchange restrictions the Central Bank of Nigeria (CBN) placed on the importation of milk and dairy products.

NACCIMA said the lifting of the ban by CBN would lead to the decline of local production.

The association said this in a statement issued by its National President, Dele Oye, on Thursday, March 21, 2024.

Oye expressed concerns over the potential ramifications of the policy change, especially against the backdrop of the naira’s current depreciation and the inconsistencies observed in customs duty payment.

He said: “We acknowledge the Central Bank of Nigeria’s efforts to refine trade policies in alignment with the evolving economic landscape.

“The decision to lift restrictions on dairy importation by all entities, barring selected companies, suggests a strategic move towards liberalising the sector, which is commendable from a free-market perspective.

CBN settles FX transactions, clears $7bn backlogs

“However, as a professional body deeply invested in the growth and stability of Nigeria’s economy, we must express our concerns regarding the potential ramifications of this policy change, especially against the backdrop of the naira’s current depreciation and the inconsistencies observed in customs duty payment.”

The NACCIMA president added: “The depreciation of the naira has already placed a significant burden on importers, with the increased cost of foreign exchange reflecting on the final prices of goods and services.

“The recent policy shift, while potentially increasing competition and broadening market access, could also exacerbate this burden, leading to higher retail prices for milk and dairy products, ultimately affecting the end consumers.

“In addition, inconsistent customs duty payments have been a significant challenge for businesses in Nigeria. This inconsistency not only hampers the ease of doing business but also creates an unpredictable trading environment.

“A policy change of this magnitude requires a concomitant strengthening of customs regulations to ensure that all stakeholders are on a level playing field.”

Oye, however, recommended a phased approach that would allow domestic producers to adjust to the new competitive landscape while preserving the value of the naira.

He said: “This approach should be coupled with a robust support system for local dairy farmers to boost domestic production, thereby reducing over-reliance on imports in the long term.

“Additionally, harmonising customs duty payments to eliminate disparities and foster transparency will be critical to ensuring the success of this policy.”

The Star