The Federal Government’s initiative to reduce food prices through the implementation of a zero per cent duty and exemption from value-added tax on selected staple food items has encountered significant obstacles.
The PUNCH reported that these challenges are highlighted by a significant increase in the average price of imported food items, which hit a price point index of 878.3 in September 2024, indicating wider economic pressures.
On July 8, 2024, the government unveiled a 150-day window for duty-free importation of key food commodities, such as maize, husked brown rice, wheat, and cowpeas, with the aim of alleviating food inflation.
The programme was designed to mitigate the effects of various factors driving food shortages and rising prices across Nigeria.
The goal was to either eliminate or drastically reduce import duties and value-added tax to promote an influx of imported food and subsequently lower consumer prices.
However, three months after its announcement, the programme remains unimplemented.
The delay has been attributed to bureaucratic hurdles and the failure of the Federal Ministry of Finance to release a list of eligible importers, as required by guidelines issued by the Nigeria Customs Service in August. These issues have delayed the scheme’s rollout.
At a press conference earlier in October, Finance Minister Wale Edun stated that the government had authorized the importation of maize and wheat to help stabilize the food market.
However, efforts to reach the National Public Relations Officer for the Nigerian Customs Service, Abdullahi Maiwada, for confirmation on whether the imports had arrived were unsuccessful.
While the policy’s implementation is still pending, the cost of imported food continues to escalate.
The National Bureau of Statistics reported a price point index for imported food items of 878.3 in September, up 30.6 points or 3.61 per cent from August’s figure of 847.7.
Further analysis shows that since the policy’s announcement in July, the average price of imported food has surged by 72.3 points, or 8.97 per cent, from an index of 806.0 to 878.3 by September.
On a year-to-date basis, this represents an increase of 185.7 points or 26.81 per cent from 692.6 in January 2024, indicating a growing dependence on foreign food amid local shortages.
Month-by-month data reveals that in January, Nigeria recorded an imported inflation rate of 26.29 per cent, which jumped to 29.81 per cent in February, a rise of 3.52 per cent.
This trend continued into March, where the rate reached 32.89 per cent, reflecting a 3.08 per cent increase. In April, the inflation rate climbed to 34.01 per cent, showing a 1.12 per cent rise from the previous month, and by May, the rate had further increased to 34.83 per cent.
The inflation rate index for imported food items reached 806.0 in June, 826.2 in July, 847.7 in August, and 878.3 in September.
In the meantime, the Central Bank of Nigeria reported that it disbursed $547.7m (N823.19bn at the official exchange rate of N1,503.3/$1 as of June 30, 2024) to Nigerians for food imports during the second quarter of 2024.
This represents a decline of $142.48m or 20.6 per cent from the $689.88m released in the first quarter of 2024, and a reduction of N80.76bn or 8.93 per cent from the N903.95bn recorded in Q1.
In total, the CBN has allocated N1.73tn over six months, with disbursements of $164.43m in January, $303.91m in February, and $221.54m in March. In the second quarter, it released $153.27m in April, $197.21m in May, and $197.22m in June.
