The Federal Government is planning to suspend import duties on staple food items, drugs, and other essentials for an initial six-month period to address rising inflation. This initiative is part of an Executive Order titled “Inflation Reduction and Price Stability (Fiscal Policy Measures) Order 2024,” expected to be issued by President Bola Tinubu.
The draft document, which has not yet been signed by the President, proposes waiving levies on fertilizers, poultry feed, flour, and grains. It also includes plans for the Ministry of Finance and the Central Bank of Nigeria to offer low-interest loans to the agriculture, pharmaceutical, and manufacturing sectors.
For six months, import duties and tariffs on staple food items, raw materials for manufacturing, agricultural inputs like fertilizers and chemicals, pharmaceutical products, poultry feeds, flour, and grains will be suspended. Additionally, the President may suspend the Value-Added Tax (VAT) on Automotive Gas Oil, basic food items, semi-processed foods like noodles and pasta, raw materials for food production, electricity, public transportation, and pharmaceutical products.
The Executive Order also proposes suspending various taxes and levies, including road haulage tax, fees on bicycles and trucks, business premises registration, and taxes on shops and markets. The government is considering importing paddy rice and maize to further address food inflation.
This proposed plan contrasts with President Tinubu’s earlier statements against food imports, emphasizing agricultural self-sufficiency and economic diversification.
Rice prices, a significant concern, have surged by 169% in the past year, reaching nearly N90,000 per bag. This increase is straining households and contributing to an estimated 31 million Nigerians facing severe food shortages by August.
The plan also includes discontinuing tax and levy payments in foreign currency to reduce pressure on the naira and mandates that government agencies prioritize Made in Nigeria goods and services.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, praised the stabilisation plan, highlighting its potential to address key economic issues and support real sector investors. He urged for the plan’s swift implementation once approved.
In addition, the Federal Government may borrow an additional N7.24 trillion in 2024 to fund its economic intervention plan, on top of the already planned N9.18 trillion borrowing to cover the year’s deficit. This borrowing is seen as necessary due to expected revenue shortfalls and the incremental spending required for the intervention plan.
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