The news of Government’s plans to establish Ruga, or Cattle Colonies, throughout the Federation, started filtering out after President Muhammed Buhari was returned as President, and his party, the APC, also won majority of seats in the National Assembly, after conclusion of the February 2019 elections.
Further confirmation of Government’s RUGA plans was made on May 21, 2019, by former Minister for Agriculture, Audu Ogbe, who revealed that land had been selected for Ruga programme in all States. The project, according to Mohammed Umar, Permanent Secretary, Federal Ministry of Agriculture and Rural Development, would be provided with necessary facilities to ensure that Cattle Breeders have access to grazing land, portable water, regular power supply, with provision also for, living quarters and schools for the Cattle Rearers’ children.
Unexpectedly, however, the cost of establishing Ruga Settlements has neither been revealed, nor appropriated in 2019! Consequently, critics wonder why the haste to create Herdsmen’s settlements, when Nigeria’s major roads are presently besieged, according to several reports of victims, by alleged Fulani Herdsmen, who kidnap, terrorize and kill travelers on our highways.
Curiously, Government has not shown any serious commitment to reduce the intensity of brigandage, kidnapping and farmland destruction by these Herdsmen who were, incidentally, earlier identified by Mr. President, himself, as ‘fleeing’ fighters from Mohammed Gadafi’s Libya!
Equally troubling also, is the latest government directive for all Migrants, amongst whom are thousands of Herdsmen and Migrants from Niger, Chad and other Sahelian Countries to register their immigration status, to presumably, regularize their stay, when in contrast, Nigerians are regularly deported or promptly repatriated from several countries, within and outside Africa, for not having requisite qualification to be residents!
Furthermore, it does not add up that President Buhari would defend ‘fleeing’ terrorists from Libya and elsewhere, against bonafide, peace loving Nigerians. Nevertheless, Meyitti Allah, the Cattle Breeders Association, have remained an unrepentant supporter of their life Patron’s, Ruga plans, as they continue to threaten national security, with provocative statements, which have, unexpectedly, attracted no reprimand.
Ironically, the President’s team has not also shown much enthusiasm, for the creative offer from Governor, Abdullahi Ganduje of Kano State, to provide adequate land and facilities to accommodate all herdsmen for the development of integrated Cattle Ranches, which would support an economic value change for slaughtering, packaging and effective distribution of beef and dairy products nationwide. Ganduje also wisely observed that “Ruga is supposed to be for States where Fulani reside; you cannot implement RUGA where the indigenes are not Fulani.”
Predictably also, the proposed, railway line from Niger Republic to Katsina, together with Nigeria’s notoriously porous borders, will invariably complicate the issue of migration and domestic insecurity, while adherence to ECOWAS and AfCFTA protocols may protect the influx of such jobless migrants, who may be recruited by fundamentalists, like the dreaded Boko Haram sect, to wreck more havoc on Nigerians.
The above notwithstanding, the leaders of Nigeria’s Ruling Party and other Northern oligarchs continue to sway, unabashedly, in locked step with Mr. President’s body language, on the nationwide establishment of RUGA, even when Traditional Leaders and Opinion Leaders throughout Southern Nigerian and the Middle Belt have bluntly rejected Ruga.
Incidentally, the Central Bank Governor, Godwin Emefiele, was recently rewarded with another 5-year term, by President Buhari, even when the Governor failed, in 2016, to prevent massive devaluation of Naira, and also, equally failed to achieve CBN’s prime objective of stable and low price levels that would drive inclusive growth. Emefiele has, not surprisingly also, enthusiastically aligned with his benefactor to deny official Forex to milk importers, so that milk producers will be compelled to develop the local dairy industry.
Arguably, nonetheless, CBN’s Forex ban, is clearly precipitate and probably not well thought through. Although, Emefiele has indicated that the Forex ban will save Nigeria about $1.2bn annually, the drawbacks of this ban are also quite formidable. Invariably, the welfare of the current corporate players in the milk market may not have been fairly considered.
Incidentally, Friesland Campina who are probably the major local players in this market, are reportedly, already strategically supporting local farmers to boost volume and best quality standards in milk production, with $23 million additional investment announced in September 2018.
However, it would certainly, be more proactive if CBN engages local milk producers and supports them with reasonably priced loans below 5 per cent, so as to steadily develop and expand a comprehensive dairy business sector. Instructively, the local species of long horned cows, reportedly, have a daily milk output, that is less than 10 per cent of the output from the special cows breeds, used successfully for milk production elsewhere.
In this event, Stakeholders would be encouraged to adopt high lactation and tropical disease resistant foreign breeds, to set up a dairy value chain, complete with standard equipment and facilities for training more farm workers and technicians, while a tested collection and distribution network would be established, before any talk of forex denial to milk importers. Invariably, this process may require a 4-5-year gestation period, during which time, access to forex for milk imports, can be subject to a stepwise, annual reduction. Ultimately, however, if the rules of ECOWAS and AfCFTA membership are applied, such currency restriction to free trade may not also be applicable to milk imports from any country in Africa.
However, CBN’s forex denial for milk (FURA) imports, will, predictably, have a counter-productive outcome; for example, relative forex scarcity induced by the ban would drive smugglers’ demand for dollars in the parallel market, and inadvertently, spike Naira above N370=$1. Expectedly, higher dollar rates will, similarly, trigger price increases for a wide range of other grey imports, to further compound the existing challenges of high inflation rate, low consumer demand, and rising cost of borrowing, to the horrid discomfort of every Nigerian businessman or income earner!
Instructively, rice importation is a case in point; for example, even though rice importers have also been denied official Forex, the reality however, is that, our neighbour, Benin Republic with barely 12 million people, has now become one of the largest rice importers in the world. Nigeria is undeniably, the ultimate destination for the several shiploads of rice annually imported into Benin Republic with dollars sourced from Bureau-de-Change. Ultimately, Nigeria’s Government would, regrettably, receive no duties on the huge rice and now also milk imports, which are indirectly funded from billions of dollars that CBN sells to Bureau-de-Change.
Predictably, the latest Forex restriction to local milk companies, will also impact negatively on the turnover and profitability of these companies; similarly, corporate tax income as well as employee tax payments to Federal and State governments, respectively, would also decline. Ultimately, the real product of CBN’s blind Forex denial to milk producing companies, would be reduced income on all fronts, i.e. Government, distributors, transporters, packaging manufacturers, advertisers, etc, while milk companies will become forced to optimize and retrench more staff!
Comparatively, however, the $1.2bn Forex, spent by milk producers on imports, is actually a small fraction of what NNPC spends, annually, to import fuel. Consequently, any drive for forex conservation, to stimulate import substitution, should probably start with the market for PMS (petrol). Regrettably, however, despite Nigeria’s huge oil resource endowment, over 90 per cent of Nigeria’s PMS is presently still imported and paid for in dollars! So the question is, why the CBN does not also deny forex access to NNPC and fuel importers, so that more local fuel refineries and a robust value chain will be fast-tracked, as expected from the Forex denial to milk producers?
Furthermore, despite the unfettered Forex access for petrol imports by NNPC, possibly over 20 million litres are reportedly smuggled through porous borders to subsidize the economy of neigbouring ECOWAS nations with possibly well over $5bn annually.
Nevertheless, according to media reports, the Meyetti Allah have readily aligned themselves, also, with the sustenance of CBN’s denial of Forex for milk importation!!