In a significant move aimed at curbing rising food prices, the Nigerian government has instructed the Nigeria Customs Service (NCS) to implement a zero percent import duty and exemption from Value-Added Tax (VAT) on essential food items. This directive follows President Bola Tinubu’s recent approval of the policy, which is expected to provide relief to millions of Nigerians grappling with food inflation.
The Ministry of Finance communicated the approval to the NCS in a letter dated August 8, 2024. The directive, which was further confirmed by the NCS in a document shared with The PUNCH, outlines the immediate enforcement of the policy by customs officials.
Comptroller-General of the NCS, Bashir Adeniyi, responded by instructing service officials to begin implementing the policy. A circular issued by the NCS, titled “Approval for the Implementation of Zero Per Cent Duty Rate on Basic Food Items,” detailed the scope and timeline of the policy. The letter, signed by Deputy Comptroller-General C.K. Niagwan, clarified that the policy applies to specific food items, including maize, husked brown rice, wheat, grain beans, and millet. The exemptions will be effective from July 15 to December 31, 2024.
The policy is specifically designed for importers with milling capacity and a verifiable Backward Integration Programme (BIP), ensuring that the benefits of the duty waiver are directed toward enhancing local production and reducing dependency on imported raw materials.
The Ministry of Finance will provide the NCS with a list of approved importers and their quotas throughout the implementation period, ensuring that only qualified entities benefit from the exemptions. The NCS has been instructed to ensure wide dissemination of the policy for strict compliance.
This move comes after the Federal Government announced on July 10, 2024, the suspension of duties, tariffs, and taxes on the importation of staple foods via land and sea borders. The aim is to ease inflationary pressures on food prices in the Nigerian market. Earlier in August, the NCS indicated that the duty waiver on imported foods would be rolled out within the week.
However, the policy is not without its financial implications. The Federal Government is expected to lose approximately N188 billion in revenue due to the suspension of import duties on these food commodities. Despite the potential revenue loss, Comptroller-General Adeniyi assured that the NCS would implement the policy efficiently, including the creation of special corridors to expedite the clearance of food imports.
The government’s decision to reduce the duty rate and levy from 30 percent to zero for husked brown rice, from five percent to zero for grain sorghum, millet, and maize, and to remove the 20 percent duty on wheat and beans, reflects a broader strategy to stabilize food prices and ensure food security in Nigeria.
