The administration of President Bola Tinubu is currently under pressure to dump the food import waiver that it announced in July 2024.
Multiple sources at the Presidency said the pressure has been coming from the private sector who claimed that opening up the country to food import would undermine their investments and worsen the unemployment rate in Nigeria.
Some private sector operators confirmed this, describing the food import waiver policy as a double-edged sword that may bring down the prices of imported commodities but would adversely impact local production.
One of the sources at the presidency who spoke with the Newsmen in confidence due to lack of authorisation to speak on the matter, said, “A lot of media outfits have been publishing on the failure of the government to implement the waiver on food imports.
“The real reason why the government is slowing it down is the need to protect local companies. Many local companies and groups like MAN (Manufacturers Association of Nigeria), LCCI (Lagos Chamber of Commerce and Industry) and industries have put pressure on the FG not to import food as that is not a solution. The focus should be to increase local production.”
Another said members of the Organised Private Sector have insisted that “importation will kill local companies and jobs.”
On July 10, 2024, the Minister of Agriculture and Food Security, Abubakar Kyari, announced that the Federal Government would suspend duties, tariffs, and taxes on the importation of maize, husked brown rice, wheat, and cowpeas through the country’s land and sea borders, for 150 days.
Kyari had said, “To ameliorate food inflation in the country caused by affordability and exacerbated by availability, the government has taken a raft of measures to be implemented over the next 180 days.
“A 150-day duty-free import window for food commodities, suspension of duties, tariffs, and taxes for the importation of certain food commodities (through land and sea borders). These commodities include maize, husked brown rice, wheat, and cowpeas. Under this arrangement, imported food commodities will be subjected to a Recommended Retail Price.”
The minister had stated that in addition to the importation by the private sector, the “Federal Government will import 250,000MT of wheat and 250,000MT of maize. The imported food commodities in their semi-processed state will target supplies to the small-scale processors and millers across the country.”
Since that announcement, neither the government nor the Nigeria Customs Service has provided details on the implementation mechanism.
In the third quarter of 2024, Customs said the government might forgo N188.37bn in revenue over the next six months due to the duty waiver granted on the importation of staple foods.
Also, the Customs had also in August 2024 said in order to participate in the import waiver, a company must be incorporated in Nigeria and have been operational for at least five years.
However, the initiative never took off, worsening the hunger situation in the country.
OPS reacts
The National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said the food import waiver was like a double-edged sword.
He said, “The food import waiver idea is a double-edged sword, and like any other issues you are trying to proffer solutions to, as you are trying to solve a problem, you are likely to be giving rise to another problem.
“What usually informs decision making is that when you weigh the pros and cons, ascertain whether the pros are higher than the cons before going ahead.”
He noted that though the food import waiver would bring down the cost of food items and alleviate hunger among the people, it would also affect local producers or manufacturers of food items, in that their sales may drop especially if they are unable to match the prices of imported goods.
“All we need to do is to weigh it on a scale to ascertain which has more advantage.”
He further noted that the import waiver is a stop-gap solution, not a long-term thing.
He added, “If it is applied, in the meantime, it will achieve its purpose and we can revert back to where we were.
“Hence, during the short stop-gap period, the government can then work on increasing agriculture output, such that the cost of locally produced food would come down.”
Kuti-George, however, slammed the government for promising and failing.
He said, “If it wasn’t implemented, then that simply wasn’t good enough. It’s not right to promise something and then fail to implement it. If it had been implemented, it would have significantly reduced the cost of the items listed under the duty-free policy allowance.
“This would have greatly benefited those in that sector by increasing their turnover since their costs would have decreased. With lower costs, they could have reduced their prices as well, and things might not have escalated to the extent we see today.”
The Director of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, acknowledged that certain private sector players raised concerns about the import duty waiver policy affecting local production, noting, “Yes, at that time, some people, especially from the northern part of the country, said it would hurt the rice farmers. There were those arguments.”
However, Yusuf maintained that bureaucratic bottlenecks were the chief factor that prevented the implementation of the import duty waiver and not the private sector’s concerns about damage to local production.
Yusuf said the Federal Government announced the policy explicitly as a “temporary intervention” to bridge the food scarcity at the time.
“The food import duty waiver was meant to be a temporary intervention, because at the time that the policy was introduced, the cost of food was very prohibitive, and there was a need to do something, at least for those few months, before we get into harvest season,” the CPPE director noted.
“So even if it was going to pose any threat, it was not supposed to be something that would be permanent. It was supposed to be something to bridge the scarcity that we had at that time.”
Reacting to the development, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said it was unfortunate that a presidential pronouncement of national importance as that of import waiver on food wasn’t implemented till the end of the 180- day window.
He said, “We had blame games going on for different reasons among key implementers, particularly between the Nigeria Customs Service and Federal Ministry of Finance for the justification of non-implementation. It speaks to the anarchy among government MDAs, resulting in policy somersaults, and causing untold hardship on the economy and the citizens.
“Standard global practice is that if your country has a huge food deficit, the government must find a way to bridge the gap, most times on a short term through imports and plan medium and long term solutions by supporting, intervening and incentivising the agriculture sector. At times even with subsidies. The life and wellbeing of an average Nigerian should be of topmost priority and shouldn’t be mortgaged on the table of business or profiteering.”
Economists speak
Economist and sustainability expert, Marcel Okeke, in his comments, highlighted that there were implications for introducing the waiver on the local economy.
“There are implications given our system. You know the corruption in the system. Implementation is the challenge. You know the gatekeepers and the way they operate. Do you think everyone will fall in line?
“There is nothing that they want to import that is not being produced by someone here in Nigeria already. The issue is the insufficiency of the production which is why demand is outstripping supply. The waiver is like pricing the local producers out of existence. There was a time in this country when we had so many of them in the textile industry when the government opened up to allow different textiles to come in, that was the death of the sector.
“I’m doubtful if this initiative will be properly implemented and that this door will be opened and shut within the specified period. What will happen within that time is likely to go out of the government’s control and will spell a calamity for local producers of those items. Also, since these local producers will now know it is cheaper and easier to import, why bother to kill themselves to produce in this inclement environment? Once the gate is opened, they will jump at it. If these people cannot stop the government from doing what it wants to do, they will join them.”
He added that the quality of the imported items would also be a source of concern.
“There will also be the challenge of quality. If care Is not taken, all kinds of quality will be dumped on the country. The best approach is to grow everything organically and that means encouraging people within our boundaries to be the ones to give us what we want. So importation will be to supplement what is being produced here,” he affirmed.
As the pressure rises, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the government was looking at ways to address the issues at stake.
In a recent interview, Edun said, “We are addressing emerging issues that will not make the policy undermine domestic food production capacity.”
Efforts to get the finance ministry to speak on the matter on Thursday were not successful, as officials of the ministry declined comments.
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