- FG’s import duty-free policy is yet to take off three months after the announcement
- Fingers point to inconsistency with policy implementation among spear-heading agencies
- Soaring inflation and naira depreciation are erasing the objective of the policy
It has been over three months since the Federal Government announced the suspension of import duties and taxes on essential food items for 150 days to address skyrocketing inflation.
The Federal Government, through the Minister of Agriculture and Food Security, Abubakar Kyari, on Monday, July 8, said the suspension only applies to the importation of such commodities as maize, husked brown rice, wheat and cowpea.
Kyari said, “To ameliorate food inflation in the country caused by the affordability and exacerbated by availability, the government has taken a raft measure to be implemented over the next 180 days:
“A 150-day duty-free import window for food commodities, suspension of duties, tariffs, taxes for the importation of certain food commodities (through land and sea borders).
“The commodities include maize, husked brown rice, wheat and cowpeas. Under this arrangement, imported food commodities will be subjected to a recommended retail price.”
However, more than three months after the announcement, the policy is yet to be implemented. While the factors responsible for the non-implementation of the policy may not be known to many Nigerians, its delay has had a significant impact on the populace, especially with soaring prices of food items, technically defeating the aim of the policy.
Who is to be blamed?
There are many parties responsible for the implementation of the zero import duty policy including the Ministry of Finance, the Federal Inland Revenue Service and the Nigeria Customs Service (NCS).
On August 7, shortly after the Federal Government announced the policy, the Customs assured of its readiness to implement the policy in one week, attributing one one-month delay to the late release of guidelines from the Federal Ministry of Finance. A week later, the Customs gave guidelines and criteria for companies to participate in the duty-free importation policy of the government, which include among others, that participating companies must have been operational for at least five years, filed annual returns and financial statements and paid taxes and other statutory obligations.
Again, the Customs said the six-month tariff waiver and import duty suspension will cost the country an estimated N188.37 billion in revenue.
These announcements, sadly, have not translated into the implementation of the policy three months later.
We are yet to get the list of beneficiaries from the Ministry of Finance – Customs
Recently, the spokesperson of the NCS, Abdullahi Maiwada, said the policy is yet to be implemented because the Ministry of Finance has yet to give a list of those who will benefit from tax exemptions.
Maiwada said, “You made mention of the policy that was announced by Mr President and we have issued a statement on the guidelines on how to benefit from that policy. Well, I would like to discuss in such a way that the common man would understand how these things work.
“People think that me and you can just go and import rice. No, that is not what the policy is all about. We have policy issues that have a long-term effect. We have the medium-term and we have the short-term effects.
“So, while formulating policies that are related that have a short-term effect, we have to do it in such a way that it will not have adverse effects on long-term policy issues. Our responsibility as an agency of government, Nigeria Customs Service, is to implement government policies.
“That’s why the statement we issued is based on the guideline issued by the Federal Ministry of Finance. They have issued a guideline on how to achieve, what are the conditions, and what are the requirements for you to benefit from that zero import duty.
“The policy stated clearly that you must be a miller, you must be a taxpayer, you must have been into operations for a certain number of years and there will be a quota that will be issued by the Federal Ministry of Finance.
“So, the list of those who benefit from those exemptions will come from the Ministry of Finance and our role as an agency of government is to implement the directives of the government. So we are policy implementers, not formulators.
“So, by the time we get those lists, within the twinkle of an eye, we are going to implement those directives from the Federal Ministry of Finance.”
There’s inconsistency with policy implementation – Customs agents
Customs agents have also attributed the non-implementation of the directive to policy inconsistency and lack of coordination among the various government agencies saddled with the implementation of the policy.
President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, said the council is worried over the delay as its attendant consequences are severe.
He said, “After our last petition seeking clarification on the implementation date, the government hasn’t responded. We only received feedback from the Federal Inland Revenue Service; there has been no clarification from any other government agency. We cannot waste money writing to a government that came up with a policy they cannot implement.
“The implications of this delay in implementation are severe, with many companies facing potential closure due to escalating energy costs, exchange rates and oil prices. There is no capital flow in the country and the import system is dwindling because of the government’s inability to intervene and reduce costs.”
Inflationary pressure eroding policy objective
As the delay in the implementation of the import duty-free policy lingers, inflationary pressure is erasing the objective of the policy.
Before the policy was announced in July, Nigeria’s inflation rate reached a 28-year high of 34.19 per cent in June 2024, a significant leap from the 22.4 per cent President Bola Tinubu’s administration met in May 2023. The rate, however, decelerated to 33.40 per cent in July after 19 months of upward trend, marking two consecutive months of decline in August at 32.15 per cent before increasing to 32.70 per cent in September 2024.
With the rising cost of fuel, which the Nigerian National Petroleum Corporation Limited (NNPCL) recently increased for the second time in two months, with prices now approximately N998 in Lagos from N885 and N1,030 in Abuja from N897, the inflation figures are far from abating.
This will also impact the prices of food items, thus defeating the objectives of the import duty-free policy
Continued naira depreciation weighing down policy impact
The continued depreciation of the naira has become a common feature in the everyday conversations of Nigerians.
The currency has continued to decline in value, especially since the naira was floated in June 2024, allowing for market forces to determine the currency’s value on a willing-buyer-willing-seller model. The naira has since gone from N769.25/$ it traded on June 30, 2023, at the Investors and Exporters (I&E) window to N1,660.49/$ as of October 17, 2024. On the other hand, at the parallel market, the currency moved from N770/$ in June 2023 to N1,700$1 as of October 14, 2024.
The naira has maintained a downward trend, depreciating by 40 per cent in the first half (H1) of 2024 and judged the worst-performing currency in H1 2024. The depreciation has continued as the currency lost 43 per cent of its value and is one of the worst-performing currencies on the African continent, according to the latest Africa’s Pulse report by the World Bank.
FG extends deadline for jet owners to pay import duties by 30 days
Meanwhile, TheRadar reported that the Federal Government has temporarily halted its plan to ground 60 private jets owned by high-profile individuals across Nigeria due to unpaid import duties amounting to billions of naira.
Nigeria Customs Service (NCS) had initially directed the Nigeria Airspace Management Authority (NAMA) to take action by grounding the defaulting jets, but that decision has now been delayed.
