High dairy production and utilization have proven very effective in improving food and nutrition security in society, especially among the rural poor. This review sought to find out the status of dairy production and utilization in Ghana and Benin, the challenges, and the way forward. The review discovered low dairy production in both countries which meets only about 19% (Ghana) and 20% (Benin) of dairy demand. This low self-sufficiency compels both countries to depend heavily on imported dairy products to meet consumers’ dairy needs. However, dairy consumption in both countries is still abysmally low (Ghana = 9 kg/person/year, Benin = 8 kg/person/year). Cow milk is the most regarded and consumed animal milk in both states and is consumed both raw and processed. Local dairy products include “wagashi” (local soft cheese), yoghurt and “brukina”/“dèguè” (fermented milk-millet beverage). Some of the challenges found include low patronage of dairy farming, low-performing breeds, safety issues, inadequate sustainable pro-dairy policies, water and pasture/forage shortages, inadequate infrastructure, poor education, unorganized local sector and climate change. However, adopting effective pro-dairy policies, effective safety and quality regulations, smart dairy farming and processing and exploring other dairy options like goat, sheep, and donkey milk is key to improving dairy production and utilization in both countries and beyond.