FG, When Will Zero Duty on Food Start?
By Idris Umar Feta
The hopes of many low-income Nigerians for lower food prices may be dashed as the zero import duty policy on essential food staples has encountered significant delays, threatening efforts to alleviate the nation’s food inflation crisis.
Nigeria is currently facing a sharp increase in food prices. Even garri, once the affordable fallback for many, is becoming out of reach for the common man. This unprecedented rise is driven by a combination of structural problems and various economic reforms enacted by the government.
In an effort to address this crisis, the federal government, in July this year approved a 150-day (five-month) duty-free window to facilitate the importation of maize, husked brown rice, and wheat, which were classified as ‘essential food items.’
Unfortunately, months later, the government has yet to implement the promised zero import tariff waiver, leaving many Nigerians disappointed. The initiative, which was scheduled to conclude by December 31, 2024, has yet to begin.
The tariff waiver was first announced by the Minister of Finance, Wale Edun, in June 2024 as part of President Bola Tinubu’s administration’s fiscal policies aimed at reducing food prices. In July, the Comptroller General of the Nigeria Customs Service (NCS), Bashir Adewale Adeniyi, reaffirmed the government’s commitment to implementing the policy.
The program was expected to commence on August 14, 2024, following the release of detailed implementation guidelines by the NCS, as communicated by Abdullahi Maiwada, Chief Superintendent of Customs and National Public Relations Officer for the service.
“Nigeria Customs Service (NCS) is pleased to announce that His Excellency, the President of the Federal Republic of Nigeria, Bola Ahmed Tinubu GCFR, through the Honorable Minister of Finance and the Coordinating Minister of the Economy, Olawale Edun, has approved the regulation for the implementation of a Zero Percent Duty Rate (0 percent) and Value Added Tax (VAT) exemption on selected basic food items,” Maiwada said.
However, the initial setback was attributed to the need for the Ministry of Finance to issue relevant directives for the policy’s commencement, resulting in an initial two-month delay.
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Many Nigerians were encouraged by the government’s announcement that it would forgo N188.4 billion in revenue over the five-month duty waiver window. However, this move may have caused tension between the Ministry of Finance and the Federal Inland Revenue Service (FIRS), both of which have a stake in the country’s revenue collection.
Months after the government’s announcement, the policy has yet to take effect. With less than three months remaining before the program’s slated expiration, the delay appears to stem from bureaucratic hurdles and disagreements among the implementing agencies.
Reports suggest that the zero-duty food import policy is unlikely to be implemented soon due to conflicts between the involved government agencies over their respective roles.
Lucky Amiwero, President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), provided further insight into the delays. He expressed frustration over the lack of clarity regarding the policy’s implementation.
“After our last petition seeking clarification on the implementation date, the government hasn’t responded. We only received feedback from the Federal Inland Revenue Service; there has been no clarification from any other government agency. We cannot waste money writing to a government that came up with a policy they cannot implement,” he lamented.
The idea behind the policy was straightforward: reduce or eliminate import duties and VAT on essential food items to boost imports and lower consumer prices. Yet, despite these good intentions, Nigeria’s inflation has continued to rise, with rates reaching record highs of 33.70 percent, and food inflation soaring to 37.77 percent in September.
Amid renewed inflationary pressure on vulnerable citizens’ purchasing power and the continued depreciation of the Naira, implementing this policy may become increasingly difficult.
The program was intended to ease the effects of the factors contributing to food scarcity and price hikes in Nigeria. Some stakeholders believe the delay in implementation is due to the government fine-tuning the policy’s modalities to ensure it runs smoothly once launched.
Nevertheless, with the policy’s objective of reducing food prices still unrealized, many Nigerians continue to suffer under the crushing weight of rising living costs. For most, access to basic food has become a nightmare, and eating three square meals a day is a distant dream.
There remains a significant gap between the government’s announcement of the policy and the preparation of the necessary guidelines for its execution. As the year draws to a close, the federal government must expedite the process to alleviate the public’s hardship. Otherwise, the pressing question remains: When will zero duty on essential food items commence?
Idris Umar Feta can be reached via: [email protected].
