Delay In Zero-Duty Tax On Imported Food Announced By Federal Government

Delay In Zero-Duty Tax On Imported Food Announced By Federal GovernmentThe Federal Government’s efforts to lower food prices through a zero percent duty and exemption from value-added tax on select basic food items are facing significant challenges. The average price of imported food items rose to an index of 878.3 in September 2024, reflecting ongoing economic pressures.....KINDLY READ THE FULL STORY HERE▶

On July 8, 2024, the government announced a 150-day duty-free import window for food commodities such as maize, husked brown rice, wheat, and cowpeas, aiming to reduce food inflation in Nigeria. However, the initiative has yet to launch three months after its announcement due to bureaucratic hurdles and the Federal Ministry of Finance’s failure to publish a list of approved importers, as required by guidelines issued by Customs in August.

In a recent press briefing, Finance Minister Wale Edun stated that the government has ordered maize and wheat imports to stabilize the food market. However, the National Public Relations Officer of the Nigerian Customs Service, Abdullahi Maiwada, could not be reached for confirmation regarding the imports.

While the government has not yet implemented the policy, prices of imported food continue to rise. According to the National Bureau of Statistics, the imported food price index increased by 30.6 points or 3.61 percent from August to September 2024. Compared to July 2024, when the policy was announced, prices surged by 72.3 points or 8.97 percent.

Year-to-date, the index has risen by 185.7 points or 26.81 percent from January 2024, indicating increasing reliance on foreign food amid domestic supply shortages. Month-by-month analysis reveals a steady increase in imported food inflation, climbing from 26.29 percent in January to 34.83 percent in May, before stabilizing at 34.01 percent in April.

The Central Bank of Nigeria has allocated N547.7 billion ($823.19 million) for food imports in the second quarter of 2024, a decrease of 20.6 percent from the first quarter. In total, the CBN has released N1.73 trillion over the past six months, with a monthly breakdown showing varied spending on food imports.

These ongoing developments highlight the complexities the government faces in implementing effective policies to stabilize food prices and combat inflation.

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