Nigeria opens doors for US$1B powdered milk import from Uganda

NIGERIA – Uganda has secured a major dairy export agreement with Nigeria that will see the delivery of 200,000 tonnes of powdered milk, valued at over $1 billion, opening a new regional market.

The agreement was flagged off under the African Continental Free Trade Area (AfCFTA) framework, which aims to deepen regional integration and reduce trade barriers among African nations.

By positioning Nigeria as Uganda’s largest milk off-taker after Algeria, the deal signals a strategic diversification of import sources for West Africa’s biggest economy.

Uganda’s dairy industry has long been recognized for its surplus production capacity, with exports increasingly driving sectoral growth.

This partnership with Nigeria not only expands Uganda’s market reach but also strengthens the AfCFTA’s vision of boosting intra-African commerce.

According to The Monitor, the shipment to Nigeria, facilitated with support from former Nigerian President Olusegun Obasanjo, will make Nigeria Uganda’s largest dairy export market after Algeria, which imports about 20,000 tonnes annually.

The export follows former Nigerian President Olusegun Obasanjo’s visit to Uganda. President Yoweri Kaguta Museveni of Uganda welcomed him for high-level discussions focused on strengthening the dairy economic cooperation between Uganda and Nigeria.

The deal has drawn attention because Nigeria, with an estimated 20 to 21 million cattle, has a far larger herd than Uganda’s about 14.5 million cattle.

Yet Uganda produces between 3.8 and 3.9 billion litres of milk annually, while Nigeria’s output is estimated at just 600,000 to 700,000 tonnes, far below the country’s annual consumption requirement of 1.6 to 1.7 million tonnes.

As a result, Nigeria currently imports around 60 percent of its milk and dairy needs, spending over $1.5 billion each year on dairy imports.

Dairy products remain one of the biggest components of the country’s food import bill, placing sustained pressure on foreign exchange reserves.

Before 2023, Kenya was Uganda’s leading buyer of milk. But a 10 per cent import levy on dairy products made Ugandan goods less competitive, prompting Kampala to challenge the tax under the East African Community (EAC) Common Market Protocol, which guarantees free movement of goods within the region.

In November 2025, the Agriculture and Livestock Development Cabinet Secretary, Mutahi Kagwe of Kenya, banned the importation of milk powder from neighbouring countries to protect the local dairy industry and farmers from unfavourable market competition.

The restrictions have hit several Ugandan dairy producers—including Brookside Dairy, Muhangi Dairy Farm, Lakeside Dairies, Rainbow Dairy, and Amos Dairies—costing the country an estimated $74.4 million (Sh9.7 billion) in annual lost export revenue.

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