The Federal Government has entered into a major dairy supply agreement with the Republic of Uganda as part of efforts to stabilise Nigeria’s milk supply and address a widening gap between domestic production and national demand.
Under the agreement, Uganda will export about 200,000 tonnes of powdered milk to Nigeria in a deal valued at approximately $1 billion. Ugandan authorities have indicated that shipments are expected to commence before the end of the year, with consignments transported from Entebbe to Lagos.
The agreement has drawn attention to long-standing structural challenges within Nigeria’s dairy and livestock subsector.
Although Nigeria is estimated to have between 20 and 21 million cattle, domestic milk production remains low, at about 600,000 to 700,000 tonnes annually, compared to national consumption requirements estimated at 1.6 to 1.7 million tonnes.
By contrast, Uganda, with an estimated cattle population of about 14.5 million, produces between 3.8 and 3.9 billion litres of milk annually, enabling it to meet domestic demand and sustain exports. The disparity has continued to shape Nigeria’s reliance on imported dairy products.
Industry data show that Nigeria currently imports roughly 60 per cent of its dairy needs, with annual spending on milk and related products exceeding $1.5 billion.
Dairy imports remain a significant component of the country’s food import bill, contributing to sustained pressure on foreign exchange reserves.
Stakeholders in the livestock sector say the heavy inflow of imported dairy products has constrained the growth of local milk production.
Cheaper imported milk substitutes, particularly fat-filled milk powder, dominate the market, limiting the competitiveness of domestic producers and weakening incentives for investment in local dairy operations.
Analysts note that while dairy producers in exporting countries benefit from structured value chains, state support and efficient processing systems, Nigerian farmers continue to operate within fragmented production systems, with limited access to finance, infrastructure and modern technologies.
Experts argue that increased investment in improved cattle breeds, organised ranching systems, milk collection centres and cold-chain infrastructure could significantly raise domestic output and reduce import dependence over time.
Although the Federal Government has announced a range of livestock reform initiatives, including the establishment of a dedicated livestock ministry and programmes to promote ranching and value-chain development, implementation has remained gradual.
