The Federal Government of Nigeria is planning to suspend import duties on staple food items, drugs, and other essentials for six months to address rising inflation.
This initiative, outlined in a document submitted to President Bola Tinubu, also proposes waiving levies on fertilizers, poultry feed, flour, and grains. Bloomberg reports that President Tinubu has not yet approved the document.
The proposed “Inflation Reduction and Price Stability Order” directs the Ministry of Finance and the Central Bank of Nigeria to develop a plan for providing low-interest loans to the agriculture, pharmaceutical, and manufacturing sectors. The goal is to increase output and reduce inflation.
Additionally, the document suggests suspending value-added tax (VAT) on several items, including automotive gas oil, basic food items, semi-processed staples like noodles and pasta, raw materials for food production, electricity, public transportation, agricultural inputs, and pharmaceutical products until the end of the year.
Importation of Paddy Rice and Other Measures
A previous report by Nairametrics on the Federal Government’s Accelerated Stabilization and Advancement Plan (ASAP), submitted by Finance Minister Wale Edun, indicates a consideration for importing paddy rice and maize. The ASAP report advocates for an executive order to permit the importation of paddy rice by millers to curb food inflation.
Key recommendations in the document include:
– Suspension of import duty and VAT on specified items.
– Importation of paddy rice by millers.
– Pegging the import duty exchange rate.
This plan appears to contrast with earlier statements by President Tinubu, who had declared that his administration would avoid food imports, aiming instead to turn current challenges into future opportunities.
Food Crisis in Nigeria
Nigeria faces a severe food crisis, with food prices soaring and food inflation reaching 40.5%. Rice, a staple food, has seen its price increase by 169% over the past year, with a bag of rice costing nearly N90,000 in March and April. This surge in food costs is straining households and exacerbating the already fragile economy, with an estimated 31 million Nigerians at risk of severe food shortages by August.
The crisis has significant implications beyond the economy, affecting health, education, and overall societal well-being.
