By Chijioke Ohuocha
ABUJA, Feb 13 (Reuters) - Nigeria's central bank has lifted
restrictions on buying U.S. dollars to pay for milk imports for
six firms, after measures introduced last year to boost local
dairy production and conserve foreign currency reserves riled
businesses.
The central bank said in a circular to currency dealers,
seen by Reuters on Thursday, that it had asked banks to open
import documents for firms including Nestle Nigeria NESTLE.LG ,
Dutch-owned FrieslandCampina, the local unit of Coca Cola
bottling company HBC CCH.L Chi Limited, Promasidor Nigeria and
Danish-based TG Arla Dairy Products Limited, while cancelling
all other letters of credits.
Following an outcry after last year's curbs on access to
foreign exchange, that bank said it would offer low-interest
loans to milk producers to spur local production. It also told
lenders to stop processing milk imports on a credit
basis. Nigeria, Africa's largest economy, typically spends between
$1.2 billion and $1.5 billion a year on foreign milk.
Industry groups have been lobbying the government, arguing
that domestic milk production was not enough to meet local
demand.
Nigeria mostly relies on imports to feed its 180 million
population. In 2015, the central bank restricted access to
foreign exchange for 41 items which it said can be produced
locally.
The central bank has said milk was added to the list after
the success of the currency restriction policy and because of
the large amount spent on imports.
On Thursday, the central bank introduced longer-term
contracts on the naira to attract more foreign inflows, shore up
its dwindling dollar reserves and try and stave off a currency
devaluation.