Nigeria looks to boost dairy value chain with national policy

Nigeria is gearing up for a major transformation in its dairy industry with the introduction of a national dairy policy aimed at reducing the country's heavy reliance on dairy imports. The draft policy, discussed at length with stakeholders in Abuja, promises to save Nigeria a staggering $1.8 billion annually in dairy imports. Muhammadu Abubakar, National President of Commercial Dairy Ranchers Association of Nigeria (CODARAN), shed light on the intricate details of the policy and how it will address the challenges along the milk production and dairy value chain in the country. The key focus of the policy is to drive a robust backward integration program, urging major importers of dairy products to source their raw materials locally. This strategic move is set to gradually increase the local content composition of dairy products over the next five to ten years, aiming to achieve a 50% local content target. By doing so, Nigeria aims to close the substantial gap between annual production and demand, which currently stands at 600,000 metric tons versus 1.2 million liters. The policy also tackles the issue of dumping by dairy companies, particularly liquid milk imports, where Nigeria has been faced with excessive imports of milk products containing up to 80% water. To combat this, the policy proposes incentivizing the importation of milk powder, which has a higher solid content, while maintaining a 5% duty on such imports until local production capacity improves. This measure aims to discourage the dumping of low-quality liquid milk products and encourage a shift towards supporting local dairy producers. The success of the policy hinges on significant investments in the upstream and midstream sectors of the dairy value chain. While importers traditionally focused on the downstream market, viewing Nigeria solely as a dumping ground for their products, the policy mandates a shift towards investing in production and milk collection processes. This means that importers will need to integrate backward into production, ensuring the quality and standards of locally sourced raw materials for dairy products. Overall, the introduction of the national dairy policy marks a pivotal moment for the Nigerian dairy industry, signaling a shift towards self-sufficiency and reduced dependency on expensive imports. The ambitious goals set by the policy, coupled with targeted interventions to address key challenges along the value chain, are poised to revitalize the dairy sector and unlock its full potential for growth and development.