Key stakeholders in Nigeria’s dairy industry met recently in Abuja to validate the Implementation Framework of the National Dairy Policy. The policy provides the roadmap for ending Nigeria’s $1.5 billion annual dairy import bill.
The event marked a significant milestone in the nation’s agricultural transformation agenda. It was noted during the event that despite having an estimated 58 million cattle, Nigeria still spends over $1.5 billion yearly importing milk and other dairy products.
Several incentives were announced that were designed to accelerate domestic milk production including five-year tax holidays for new dairy processors, low-interest loans for farmers, tariff protection for local producers and the establishment of well-equipped dairy hubs across key production zones. Also proposed were school feeding programmes that use locally sourced milk, guaranteed off-take arrangements and the deployment of dairy extension officers to improve smallholder productivity.
The Federal Government’s commitment to the dairy sector was reaffirmed as the sector was noted as a driver of industrial growth, job creation and food security. It was further noted that though the sector (dairy as opposed to livestock as a whole) was home to more than 20 million cattle, it produces only about 700 million litres of milk annually — less than half of national demand, estimated at 1.6 billion litres.
The supply gap was noted to be both a challenge and an opportunity, and that operationalizing the Dairy Policy would align government and private sector efforts to achieve self-sufficiency in milk production.
It was noted that with effective implementation that, the policy would empower farmers, create decent jobs and significantly reduce our dependence on imports. It was further noted that the policy provides for the establishment of a National Dairy Development, a Milk Marketing Board and a National Dairy Development Fund to coordinate value chain activities and ensure sustainable financing.
Calls were made for stronger institutional capacity, private sector-led innovation and Nigeria’s participation in the International Dairy Federation to benchmark global best practices. It was noted that that countries such as India, Kenya and Ethiopia had shown that with clear institutional mandates and cooperative development, the dairy sector could become a major driver of rural transformation.
The president of the Commercial Dairy Ranchers Association of Nigeria (CODARAN), M.D. Abubakar described the framework as a roadmap for systematic development of the dairy industry. He stressed the importance of backward integration, where dairy processors invest in local milk production, feed formulation and breeding programmes as a sustainable route to self-reliance.
“Backward integration is a tested and proven strategy for achieving local dairy development while reducing and ultimately eliminating dependence on imported milk,” he said. He called for immediate establishment of the proposed National Dairy Development and Marketing Board and the Development Fund, as well as the introduction of special levies on imported dairy substitutes to encourage local production.
Across all sessions, participants expressed strong support for the Implementation Framework and reaffirmed their collective resolve to build a competitive and resilient dairy economy driven by innovation and local investment. The validation of the National Dairy Policy Implementation Framework, they agreed, marks the beginning of a new chapter for Nigeria’s livestock sector — one that promises to enhance rural livelihoods, strengthen food security and conserve foreign exchange.
BACKGROUND
For centuries, Fulani pastoralists have been the backbone of Nigeria’s dairy sector, producing raw milk consumed in rural and urban areas.
During the colonial and post-independence eras, there were early attempts at commercial farming at government ranches in places like Vom in Plateau state, Obudu in Cross-River state and Mokwa, Niger state. Wartime (i.e. World War 2) restrictions on dairy produce imports and a ban on Clarified Butter Fat (CBF) exports played a crucial role in the growth of Nigeria’s dairy sector. CBF is obtained from the separation and processing of milk cream from the milk itself. After removing the cream, what remains is skimmed milk. However, as the wartime restrictions were lifted, the growth spurt stalled as the government ranch at Vom closed down in 1954. In general, the ranches struggled due to poor management and lack of adaptation to local conditions.
After the colonial period, and as part of the government’s strategy to encourage dairy industrial development, the federal, regional and/or state governments established several dairy-processing plants throughout the country. Among these were Madara Limited in Jos, Plateau State, and Agege Dairy Farm near Lagos. Other government dairy farms were established at Ibadan, Kaduna, Maiduguri, Minna, Ilorin and Kano.
These interventions by the post-colonial governments created awareness of the need for dairy development as part of the overall efforts to improve on the performance of the livestock subsector. This resulted in the establishment of more milk processing plants by both the private and public sectors, as a means of catalyzing domestic production. However, the availability of cheap imported milk powder in particular and other dairy products in general created a disincentive for the development of a domestic dairy industry, particularly as the processing plants completely neglected the appropriate pricing and milk collection aspects.
The dairy industry today consists of a mix of pastoralists, commercial dairy operators and importers. The pastoralists are responsible for 95% of domestic production. The importers are by far the largest segment of the industry with over 60% market share. They mostly import powdered milk and derivatives from Holland, Denmark, New Zealand, etc. This segment use mainly imported powdered milk for their products (97%). Very few use locally sourced raw milk to complement their products. They sell processed products formally.
The key challenges the industry currently faces include the following:
- Low productivity: Indigenous cattle breeds yield only 1–2 liters of milk per day compared to 20–30 liters from improved breeds in the west. Kenya manages to get yields of 10 liters per day.
- Infrastructure gaps: Poor cold chain, limited processing facilities, and weak rural transport networks hinder milk collection.
- Import dependence: Nigeria spends billions of naira annually importing milk, undermining local production.
- Pastoral conflicts: Herdsmen–farmer clashes disrupt supply chains and discourage investment.
- Policy inconsistency: Shifting government policies on import tariffs and local sourcing targets create uncertainty for investors.
- Limited financing: Smallholder farmers lack access to credit, veterinary services, and modern feed systems.
Possible solutions to these problems include:
- Breed improvement: Introduce crossbreeding programs to raise yields, combining local resilience with high‑yield exotic breeds.
- Value chain development: Invest in milk collection centers, cold storage, and rural road networks to reduce spoilage.
- Policy support: Enforce local content requirements gradually, while offering incentives for processors to source domestically.
- Public–private partnerships: Expand collaborations like FrieslandCampina’s Dairy Development Program, linking pastoralists to processors.
- Conflict resolution: Address pastoralist–farmer clashes through grazing reserves, ranching initiatives, and community dialogue.
- Capacity building: Train farmers in modern husbandry, feed management, and veterinary care.
- Financing and cooperatives: Provide microcredit and strengthen dairy cooperatives to empower smallholders.
