West Africa’s ban on whole milk powder imports could harm local processors, expert warns

(Ecofin Agency) – West Africa is the leading milk powder import region in Africa. Although demand for dairy products is growing in the region, the development of the local dairy industry remains a major challenge.

In West Africa, calls for a ban on imports of whole milk powder could harm local dairy processors supplying urban consumers, Christian Cornio, deputy director of Selmet research at CIRAD, told Ecofin Agency.

While NGOs are pushing for greater use of local milk and the development of mini-dairies, Cornyo notes that relying on local milk collection remains a challenge. Collecting milk is often expensive, as much of the production is concentrated in rural areas and focuses primarily on raising livestock for meat. Additionally, collecting small quantities from remote areas with limited electricity and no cooling systems is expensive.

Cornyo believes dairy companies need to work more closely with rural producers, but admits local processors need to keep costs down. Imported milk powder, which is cheaper, helps them stay competitive. Without that, he said, some dairies could be forced to close.

“A ban on the import of whole milk powder will be counterproductive for West African dairy processors. Many argue that only local milk should be used, but this will mean that factories can only operate when local milk is available.” Cornio explains. He notes that in Senegal, for example, a dairy such as Laiterie du Berger collects thousands of liters of milk every day, but they rely on milk powder to meet demand in markets such as Dakar, where competitors only use milk powder.

Over the past decade, full fat milk powder (FFMP), an inexpensive milk powder fortified with vegetable fats, has become widespread in West African ports. FFMP is priced 30-40% lower than local milk and is subject to only 5% import tax, keeping import levels high and impacting the local dairy industry.

“People often say there is no dairy policy in West Africa, but that is not true.” says Cornio. “The policy allows the import of products such as FFMP while efforts are being made to promote local milk production and collection. However, the competition has changed. Even whole milk powder is displacing FFMP in the market.”

Cornyo suggests that West African governments could increase tariffs on plant-based milk formulas such as FFMP and support local dairies with subsidies, animal feeding programs and tax breaks. For example, in Senegal, VAT of 18% is applied to locally collected milk, which serves as raw material for the production of yoghurt, cheese and butter.

West Africa spends between $1.6 billion and $1.9 billion annually on dairy imports. The largest buyers are Nigeria, Senegal, Ivory Coast, Mali, Ghana and Mauritania.