How Nigeria’s diary policy may drive local milk production

In a move to revamp Nigeria's Dairy Value Chain, the government has rolled out the National Dairy Policy 2023-2028. The aim of this policy is to provide a framework for both public and private sector investors in the dairy industry. The goal is to achieve self-sufficiency in milk production and enhance global competitiveness. Muhammadu Abubakar, the CEO of L and Z Farms and the President of the Commercial Dairy Ranchers Association of Nigeria, shed light on the significance of this new policy during a CNBC Africa interview. Abubakar emphasized that the Nigerian dairy industry needed a shift from reliance on Western imports to fostering local production. He highlighted the exorbitant amount spent annually on importing dairy products, amounting to about $1.5 billion. The National Dairy Policy is designed to address this issue through import substitution and backward integration. While the policy's focus is crystal clear on reducing imports and boosting local milk production, experts have raised concerns about the country's ability to meet domestic consumption levels. Abubakar acknowledged the long-term nature of dairy investment and stressed the importance of initiating steps in the right direction. The five-year policy document aims to attract investment in the midstream sector, focusing on collection and aggregation of milk, which is crucial for supplying processing centers. Currently, Nigeria heavily relies on multinational processors who import raw materials. The goal of the policy is to gradually reduce this dependency by promoting local production and eventually achieving import substitution. Abubakar voiced the need for increased investment in the sector to enhance aggregation and collection practices, paving the way for backward integration into production. The stark reality of Nigeria's milk import figures underscores the urgency of the situation. In the last quarter of 2023 alone, the country spent billions on milk imports, with a significant portion being essentially water. Abubakar advocated for restrictions on liquid dairy imports to curb wastage of foreign exchange and promote local production. Currently, a multitude of countries supply milk to Nigeria, involving numerous companies in importation activities. One of the critical challenges facing the Nigerian dairy sector is the lack of modern practices, particularly in cross-breeding and calving. Abubakar stressed the importance of establishing an enabling environment to attract both local and foreign investments. The policy aims to create a conducive ecosystem for dairy production, encouraging investors to engage in local milk production without the risk of competing with cheaper imports. Abubakar cited India as a success story in dairy production, transitioning from a net importer to an exporter through deliberate policy interventions. He advocated for ranching practices to maximize milk production from the millions of cows scattered across Nigeria. By consolidating these cows into ranches and focusing on quantity, the country can significantly boost its milk output. The dairy policy represents a crucial step towards reshaping Nigeria's dairy industry. It provides a roadmap for sustainable investment, aimed at driving self-sufficiency and reducing reliance on foreign imports. The coming years will reveal the effectiveness of this policy in propelling the country towards achieving its milk production goals.