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NIGERIA DIARY INDUSTRY

August 11, 2020

Agric DigestNewsTrending

Dairy consumption in Nigeria is rising faster than the pace of production, leaving imports to the gap. Recent government policies aim to support local output, encouraging private investment in the sector.

Nigeria had a cattle population of 20 million in 2018, accounting for 1.36% of the global total and making it the fourth-largest cattle population in Africa after Ethiopia, Sudan and Tanzania, according to the UN Food and Agricultural Organization. Of the country’s total herd, 11.5% is used for diary, while 88.5% is consumed as meat.

Most of the cattle in Nigeria is found in the northern region states of Kaduna and Kano. The majority of cows are local breeds, representing over 90%, while the remainder comprises cultured breeds imported from the Netherlands and South Africa. It is these breeds that are mainly used for dairy production.

 

Production Challenges

Unlike other countries like Kenya where cattle is managed in stable units such as ranches, Nigerian cattle are reared under nomadic systems, where cattle are moved across states in search of food and water. The nomadic system affects the nutrition and management of the animals, which in turn impacts their weight and milk production. Milk output of nomadic herds is usually lower than that of cattle managed in specially built units where feeding is controlled. On average, cows in Nigeria have a maximum weight of 300 kg and produce about 1.5-2 litres of milk daily, compared to Kenya where cattle weigh between 700 kg and 1000 kg with daily milk production of 30 litres.

Domestic milk production increased by 6% between 2014 and 2018, to reach a total output of 641,000 tonnes in 2018. This rise is not enough to keep pace with consumption, which grew by approximately 8% from 943,000 tonnes in 2014 to about 1 million tonnes in 2018. The country spends between $1.2 billion and $1.5 billion annually on milk and dairy imports to make up for the shortfall in local output, according to the Central Bank of Nigeria (CBN).

 

Backward Integration Efforts

In July 2019, the governor of the central bank announced that the government had had several meetings with major stakeholders in the industry to encourage sourcing of raw materials through backward integration which will increase investments in the sector. Several multinationals, including Promasidor and FrieslandCampina, are making major investments to support local milk production.

 

Value chain

The dairy value chain begins with pastoralists responsible for the management of cattle and other livestock. Pastoralists account for about 90% of daily output in the country which is then used by processors. There are two processing streams: local and commercial. Local processing is done on a very small scale with milk converted to local dairy products such as nunu (local milk) and wara (local cheese). This is usually distributed and sold informally on the streets, with a small amount used for household consumption by the processors. Commercial processors operate at larger scale using a combination of locally produced and imported milk to produce a variety of dairy products sold in the formal market. A large percentage of milk inputs used by commercial processors is imported due to the limited portion received by the pastoralists.

 

Source: Asoko Insight

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