Developed Cold Chain industry critical to success of CBN’S policy on milk – experts

While some Nigerian stakeholders are still thinking over the recent Central Bank of Nigeria’s (CBN) policy on restriction of foreign exchange for the importation of milk, others are expectant of the investment spin-off the policy will create in the Nigeria’s fledgling economy.

In analysing the policy, industry operators believe that CBN may have focused only on reducing the quantum of forex expended on importation of milk and pushing operators to think local, but they said the policy, taken from broader perspective, would also be a catalyst to developing the Cold Chain sector and Logistic industry, which are critical to the success of the intension of the policy.

These two sectors alone, when developed, have the capacity to employ many Nigerians in a country where unemployment is presently at 23 percent. The

way it stands, the present poor developed Cold Chain industry will likely frustrate intensions of the policy, the experts say.

Assessing the policy, especially in line with CBN thinking, Tunde Okoya, managing director of Lange and Grant firm that specialises in the construction of large prefabricated structures and cold rooms, told Businessday that it was absolutely impossible to develop dairy industries, especially in tropical climate like Nigeria, without Cold Chain.

“Milk is highly perishable and it could be pasteurised to extend shelf-life but it still needs to be preserved before any other processing is done. Hence, the need to keep it in a cold temperature in order to prevent it from going bad before it is processed,” he said.

To make the intension of the policy a success, Okoya, who is also the Vice President of Organisation for Technology Advancement of Cold Chain in West Africa (OTACCWA), said there was need to have a Cold Chain system in operation right from the farm gate where the milk was obtained, to the aggregation point, where all the milk was collected before sending it to a major processor or packaging company. Even after it has been processed and bottled into Tetra packs or bottles, it still must be transported (which could require Cold Trucks), he said.

Reminded that Nigeria has a poorly developed Cold Chain industry, Okoya noted that some challenges would obviously be recorded with the absence of matured Cold chain operation in place. “This is why the government must come up with strong policies to salvage the situation. Industry and government policies are made to develop sectors that are perceived to be glitch and such policy (like that of CBN) at the end of the day have impact of cascading to other sectors. That is why this new CBN policy is a welcome development,” he said.

“Currently Nigeria has one of the lowest cold chain penetrations compared to its size. So the government should explore more innovative ways to address the development of cold chain in Nigeria to develop the industry rapidly.”

It is expected that the embrace of local production of milk following CBN restriction of importation on the product, will create opportunity for investment in cold chain.

To checkmate smuggling of milk in the short term due to the policy, Okoya recommended to government to build strong policies that will guide activities at the border. Government has to invest into the industry to help Nigeria catch up quickly with the necessary requirement, demand of cold chain and increase supply for effective operations, he said.

Regretting that the rate at which Nigeria imports basic needs (mostly agricultural produce) is alarming, Okoya said the CBN policy will increase income and earnings for cattle rearers and encourage them develop ranching settlement rather than moving around.