Tinubu suspends import duties on food and medicines

As a measure to combat inflation, the federal government led by President Bola Tinubu could implement a proposal to suspend the payment of import duties on staple foods, medicines and other essential goods for a period of six months.

This was established in the President’s next Executive Order entitled “Inflation Reduction and Price Stability (Fiscal Policy Measures) Order 2024”.

Punch NG’s correspondent saw a document that did not contain the President’s signature but was supposed to be signed in April. The document also contains proposals to remove tariffs on fertilizers, chicken feed, bread and grains.

The presidential decree would direct the Ministry of Finance and the Central Bank of Nigeria to develop a strategy for the provision of soft loans to the agricultural, pharmaceutical and manufacturing sectors.

“Import duties and other tariffs will be suspended for six months on the following products: staple foodstuffs, raw materials and other direct inputs of production. Inputs for agricultural production include fertilizers, seedlings and chemicals, pharmaceutical products, poultry feed, flour and grain,” the document said.

Tinubu is also expected to suspend value added tax on diesel, some staple and semi-processed food items such as noodles and pasta, raw materials for food production, electricity and public transport, as well as agricultural inputs, produce and pharmaceutical products for the rest of the year.

“Suspension of certain taxes and duties: The order provides for the suspension for six months of various taxes and duties, such as road freight tax and other transport-related fees; fees for bicycles, trucks, canoes, wheelbarrows and carts; business registrations; taxes and duties on shops, kiosks and markets; animal trade and agricultural sales tax.”

The document also makes the following recommendations: suspension of import duties and value added tax on certain goods, including imports of paddy rice by millers, and linking import duties to the exchange rate.

Meanwhile, the federal government’s proposed plan contradicts Tinubu’s earlier statements on food imports earlier this year.

Speaking at an event with All Progressive Congress state leaders, Tinunu said his government would not accept food imports but would instead transform the country’s scarcity into abundance.

“Farmers are currently being supplied with fertilizers. Agriculture and economic diversification are the answer to our problems.

“We will not continue to import food. We know how to turn scarcity into abundance and the world will watch us do it again,” he said.

Nigeria is facing a looming food crisis that threatens the country’s stability. Food prices have risen dramatically, with food inflation reaching 40.5 percent.

Rice, a staple food, is one of the worst affected commodities. In the last year alone, rice prices have increased by 169 percent, reaching about 90,000 naira per bag in March and April.

This significant increase in food costs is placing a huge burden on households across the country and further worsening an already shaky economy.

Over 31 million Nigerians are expected to suffer severe food shortages by August this year.

In addition, Tinubu intends to ban the payment of taxes and duties in foreign currency by presidential decree.

To ease the pressure on the naira, the decree directs all levels of government and their agencies to give priority to the purchase of goods and services made in Nigeria.

The document states, among other things: “Governments at all levels and their agencies should, to the extent possible, promote goods and services made in Nigeria.”

“Payment of taxes and levies in foreign currency shall be suspended to enable payers to pay in naira, while non-critical expenditure plans of MDAs involving foreign currency costs shall be put on hold. States and local governments are encouraged to support these tax suspensions to ensure broad-based relief for businesses and consumers.”

Dr. Muda Yusuf, Chairman of the Board of the Center for the Promotion of Private Enterprises, praised the stabilization plan, pointing out that if implemented, it will solve the most pressing economic problems that worry investors in the real sector.

In an interview, Muda said: “The proposed accelerated stabilization and development plan is a laudable proposal by the finance minister. It addresses many of the burning economic issues that concern investors in the real sector.

“The plan contains robust and comprehensive fiscal measures that real economy actors have been demanding over the past year. It addresses investor concerns about high interest rates, the high cost of handling cargo at ports and high import tariffs.

“Easing import tariffs on key raw materials for manufacturers would calm raging inflationary pressures in the economy, particularly food inflation. The fiscal measures reflect the government’s response to investor concerns in the real economy. We call for speedy implementation of the plan once it is approved by the President.”

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