The Federal Government’s ambitious initiative to lower food prices by implementing a zero percent duty and exempting selected basic food items from value-added tax is facing significant obstacles.
In September 2024, the average price index for imported food items reached a staggering 878.3, underscoring the growing economic pressures that have hindered efforts to combat food inflation in Nigeria.
On July 8, 2024, the government introduced a 150-day duty-free import window for essential food commodities such as maize, husked brown rice, wheat, and cowpeas, aiming to address food scarcity and rising prices nationwide.
However, nearly three months later, this scheme has not been activated, primarily due to bureaucratic delays and the Federal Ministry of Finance’s failure to publish a list of approved importers as required by guidelines issued by Customs in August.
During a recent press briefing, Finance Minister Wale Edun stated that the government has arranged for maize and wheat imports to help stabilize the food market.
Despite this, the expected implementation of the policy has yet to occur, and prices for imported food continue to rise.
The National Bureau of Statistics (NBS) reported a substantial increase in the average price of imported food, with a 30.6 index point rise from August to September 2024.
This marks an 8.97 percent increase from the 806.0 average price index noted in July 2024, when the duty-free import initiative was announced.
Year-to-date, the average price of imported food has surged by 26.81 percent, revealing an increasing reliance on foreign food products amidst domestic supply shortages.
The persistent trend of rising inflation has been a concern throughout the year, with imported food inflation rates climbing from 26.29 percent in January to 34.83 percent in May. Monthly analyses indicate a continual upward trajectory, alarming both consumers and policymakers.
In the second quarter of 2024, the Central Bank of Nigeria (CBN) allocated N547.7 billion ($823.19 million at the official exchange rate) to support food imports, a decrease of 20.6 percent from the $689.88 million set aside in the first quarter. Over the past six months, the CBN has disbursed a total of N1.73 trillion to facilitate food imports.