FG Suspend Import Duties On Food, Drugs, Others
The Federal Government, FG, is planning to suspend import duties on essential items like staple foods and drugs for six months to combat rising inflation, reports The PUNCH.
This initiative is outlined in an Executive Order titled “Inflation Reduction and Price Stability (Fiscal Policy Measures) Order 2024,” which is expected to be signed by the President. The order includes waivers on levies for fertilizers, poultry feed, flour, and grains, aiming to alleviate the financial burden on consumers.
The executive order also mandates the Ministry of Finance and the Central Bank of Nigeria to develop plans for offering low-interest loans to the agriculture, pharmaceutical, and manufacturing sectors. According to the document, import duties and other tariffs will be suspended for six months on:
– Staple food items
– Raw materials and direct inputs for manufacturing
– Agricultural inputs including fertilizers, seedlings, and chemicals
– Pharmaceutical products
– Poultry feeds, flour, and grains
Additionally, the President may suspend the Value-Added Tax (VAT) on automotive gas oil, basic food items, semi-processed staples like noodles and pasta, raw-material inputs for food manufacturing, electricity, public transportation, and agricultural and pharmaceutical products for the rest of the year.
The Executive Order also suspends various taxes and levies, including those on road haulage, bicycles, trucks, canoes, wheelbarrows, carts, business premises registration, shops, kiosks, markets, and animal trade.
In the “Accelerated Stabilisation and Advancement Plan” (ASAP) report, the government is considering importing paddy rice and maize to address food inflation. The report suggests an executive order to support millers by importing paddy rice to combat the rising cost of food.
However, this plan appears to conflict with President Tinubu’s earlier statements against food imports. Tinubu previously emphasized the importance of agricultural self-sufficiency, stating, “We will not continue to import food. We know how to turn lack into abundance, and the world will watch us do it again.”
The country faces a looming food crisis with food inflation at 40.5%. Rice prices have surged by 169% over the past year, reaching nearly N90,000 per bag. This spike in prices is straining households and exacerbating economic instability, with an estimated 31 million Nigerians potentially facing severe food shortages by August.
The Executive Order also aims to discontinue tax and levy payments in foreign currency and encourages government agencies to prioritize Made in Nigeria goods and services. This measure is intended to reduce pressure on the naira and support local industries.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, praised the stabilisation plan, saying it addresses critical economic issues for investors. “The plan contains robust and comprehensive fiscal policy measures that stakeholders in the real economy had clamoured for over the past year,” he said, urging swift implementation once approved.
Meanwhile, the Federal Government may borrow an additional N7.24tn in 2024 to fund its economic intervention plan. This borrowing, combined with an already planned N9.18tn to cover the year’s deficit, could push the total debt for 2024 to N16.42tn. The Finance Minister, Wale Edun, highlighted these plans in a presentation, acknowledging that additional borrowing would negatively impact leverage metrics if entirely funded by new debt
