Milk is next on the chopping block. According to the central bank governor: we import $1.2bn worth of milk every year. Milk is something he believes we can produce locally. To quote the governor at the last MPC meeting; “What really does it take to produce milk? Get a cow and give the cow plenty of water to drink and let the cow eat a lot of grass and the cow positioned in a place without roaming around. Let that cow get fat and you can get some milk from it”.
So much to unpack. But the first question is: do we really import $1.2bn worth of milk every year? According to the UN comtrade database: No we don’t. There was one year, 2011, where we topped $1bn worth of dairy imports but in general we don’t.
In 2018 it was $330m (roughly $1.3 per person per year), down from $426m in 2017. Is that really a big deal? No its not. Is a ban on milk importers from FX markets going to magically stimulate the milk sector? Probably not. The story with our cows and milk is not a simple one. In practice all that will happen is that milk will get a bit more expensive. Of course, the ones who will pay for this are the poor who already spend a significant fraction of their income on food. In case you have forgotten, Nigeria has one of the highest rates of stunting and malnutrition in the world.
But what is the real story here? The real story here is that the CBN is under FX pressure again. In the first quarter the current account swung negative. The second quarter data are not out but signs from the downward trend in the foreign reserves suggest that it is negative again. And we know that once the CBN comes under pressure it resorts to the shenanigans known as “demand management”. And of course the poor are the first on the chopping block.
The CBN never looks to limit fuel imports which we spent $12.5bn on in 2018. It never looks to limit cars which we spent $944m on. It never looks to limit raw sugar which we spent $550m on. But once it comes to food that the poor eat then that is fair game. A sad state of affairs really.