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CBN Instructs Banks Not to Accept Bills for Collection from Milk Importers

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  • CBN Instructs Banks Not to Accept Bills for Collection from Milk Importers

The Central Bank of Nigeria (CBN) on Tuesday instructed Nigerian banks not to accept Bills for Collections as means of payment for milk importation but only Letters of Credit (LCs).

Financial institutions were adviced to immediately discontinue the processing of Bills for Collections from importers of milk and its related products.

In the directive signed by Mr. Ahmed Umar, Director, Trade and Exchange Department, CBN, the policy was to cut down payment method for import products.

It reads: “As part of efforts aimed at streamlining payment modes for imports, all authorised dealers are hereby directed to discontinue the processing of imports of milk and its related products on Bills of Collection basis. For the avoidance of doubt, the mode of payment in respect of milk and its related products shall henceforth be on the basis of Letters of Credit only. Please ensure strict compliance.”

Godwin Emefiele, the Governor, CBN, had earlier said announced the apex bank plans to restrict importers of milk from accessing forex, saying its between $1.2 billion and $1.5 billion per annum.

“We believe that milk is one of those products that can be produced in Nigeria. Milk importation has been going on in Nigeria for over 60 years. If you Google West African Milk or Friesland Campina today, they say that they have been importing milk and that they have been in Nigeria for over 60 years.

“Today, the import of milk annually stands at $1.2-$1.5 billion. That is a very high import product into the country. Given that it is a product that we are convinced that it is a product that can be produced in Nigeria.

“The reason some say that our cows are not producing much milk is that our cows roam around; they don’t have water to drink.

“When the policy on the restriction of forex started, we considered including milk on the list. Then we thought that based on the sentiments that people would show, that we should be careful,” he had said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.