- The federal government announced three policies to address skyrocketing prices of food items
- These policies are yet to be implemented months after they were announced
- With soaring inflation and naira devaluation, the delay in implementing these policies may defeat their objectives.
Nigeria's skyrocketing prices of goods and services are hitting hard on individuals and organisations alike.
The situation is exacerbated by the continued devaluation of the naira, especially since it was floated in June 2023, allowing market forces to determine the currency’s value on a willing-buyer-willing-seller model.
Other factors include increased transportation fares caused by the removal of fuel subsidy and soaring inflation. The inflation rate soared to a new 28-year all-time high of 34.19 per cent in June.
It, however, tapered in July after 19 months, declining to 33.40 per cent. The rate declined further for the second consecutive month in August to 32.15 per cent before increasing to 32.70 per cent in September 2024.
These factors have contributed to shrinking the purchasing power of Nigerians and escalating an already heightened cost-of-living crisis.
Prices of food items have been on the increase with many calling for a declaration of a state of emergency on food and the implementation of policies to address the situation.
In response to these calls, the federal government announced some policies to help cushion the effect of high food prices while also addressing food security gaps.
These include the 150-day import duty-free policy, the sale of 50kg of rice at N40,000 and the distribution of 740 trucks of rice to the 36 states and the Federal Capital Territory (FCT).
However, months after these policies were announced, they are yet to take effect.
FG’s unimplemented policies to ease impact of high food costs
1. 150-day import duty-free policy
On July 8, 2024, the federal government, through the Minister of Agriculture and Food Security, Abubakar Kyari, announced the suspension of import duties, tariffs and taxes on essential food items to address skyrocketing inflation.
Kyari said the policy only applies to the importation of commodities such as maize, husked brown rice, wheat, and cowpeas.
On August 7, shortly after the federal government announced the policy, the Customs assured Nigerians of its readiness to implement it in one week. It attributed the one-month delay to the late release of guidelines from the Federal Ministry of Finance.
A week later, Customs issued guidelines and criteria for companies to participate in the government's duty-free importation policy, which include, among other things, 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.
However, more than three months after the announcement, the policy has yet to be implemented. While the factors responsible for its non-implementation 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 policy's aim.
With Customs saying it has yet to get the list of beneficiaries from the Ministry of Finance, Customs agents lamenting policy inconsistency, and the government keeping mum on the matter, the policy's aim has gradually been defeated by soaring inflation and continued depreciation of the naira.
2. Distribution of 740 trucks of rice to states
Another policy announced by the government to address the skyrocketing price of food items is the distribution of 740 trucks of rice to the 36 states and the FCT, Abuja.
On July 15, Minister of Information and National Orientation Mohammed Idris said each state will receive 20 trucks of rice, each truck containing 1,200 bags of 25kg of rice.
He said, “The understanding is that about 20 trucks of rice have already been supplied to each of the states of the federation, including the Federal Capital Territory. Each of the trucks, of course, is carrying about 1,200 25kg bags of rice.
“This is part of the measures that the government is taking, in addition to so many others, to ensure that the hardship being experienced by Nigerians is drastically ameliorated.”
However, there is still confusion over whether states have received the promised trucks of rice from the federal government.
3. 50kg bags of rice for N40,000
In the build-up to the one-week #EndBadGovernance nationwide protests in August, the federal government announced that Nigerians can purchase a 50kg bag of rice for N40,000 at designated centres across the country.
The Minister of Information and National Orientation, Mohammed Idris, stated this on July 30. The initiative was one of several undertaken by President Bola Tinubu’s administration to ease citizens' living conditions.
Idris said, “At the last Council meeting, we announced that 20 trucks had been given to each state governor for onward distribution to those who actually needed them, to the poorest of the poor in society.
“But the government did not stop. Rice is also being sold at about 50 per cent of its cost; a bag of rice is being sold as we speak. This rice has been taken to various centres across all the states of the federation and is being sold at N40,000. Centres have been created so that those who need this rice can go there and buy this rice at N40,000.”
After an initial suspension, the government announced that only buyers with National Identification Numbers (NIN) would benefit from the sale of the subsidised 30,000 metric tonnes of milled rice to Nigerians at the rate of N40,000 per 50kg bag.
However, nothing else has been heard of the policy more than three months later.
Inflation: Nigerians to spend 54.9% income on food in next 6 months, projects CBN
Meanwhile, TheRadar reported that according to a recent survey by the Central Bank of Nigeria (CBN), the escalating inflation rate in Nigeria is expected to lead households to dedicate the largest portion of their earnings to food expenses over the next six months.
The survey, conducted from July 22 to 26, 2024, reveals that the inflation rate has surged to 33.40 per cent, with food inflation exceeding 40 per cent.
