Making Case for Development of Nigerian Dairy Sector - News at its peak

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Making Case for Development of Nigerian Dairy Sector

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Nigeria has over 180 million residents, consuming about 1.3 billion tons of milk annually. This is a huge market for locally produced milk and dairy products. Unfortunately, about 60 per cent of dairy products consumed are imported.



According to the Central Bank of Nigeria (CBN), Nigeria spends between $1.2 billion and $1.5 billion annually importing milk and dairy products. This huge import bill contributes to food insecurity and is one of the reasons behind the CBN’s decision to add milk imports to its restricted list for foreign exchange sales. When the policy comes into effect, milk imports will no longer be eligible under payment terms known as “bills for collection” which allows importers to buy on credit. Importers will need to fund their Naira accounts and open letters of credit which will significantly reduce the profitability of importing milk and dairy product.

Although billions of dollars are spent on milk annually, domestic milk consumption levels are low. The average annual per capita consumption in Nigeria is between 10 and 20 liters compared to the U.S. dietary guidelines of 267 liters per year. Low consumption is a corollary of the low purchasing power of the average Nigerian household, who rank milk and dairy products as non-essential luxuries and prioritize other staple foods such as rice, beans, and yam. Notwithstanding the low per capita consumption volume, the Nigerian dairy production system is still unable to meet current demand.

This inability stems from the fact that the Nigerian milk production system is mainly subsistence-oriented and marred by low productivity. According to H.J Makun (2018), the average annual production per cow is 213 liters, which is less than one tenth of the global average. Business Day, Pg. 23.

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