FG Releases Guidelines for Zero-Duty Food Importation
By Patience Ikpeme
The Federal Government has released detailed guidelines for the zero-duty importation of basic food items. These guidelines, issued by the Nigeria Customs Service (NCS) on behalf of the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, outline the conditions under which companies can participate in this crucial initiative.
To qualify for the zero-duty importation programme, companies must meet several stringent requirements. According to the guidelines, any participating company must be legally incorporated in Nigeria and have been operational for at least five years. Additionally, the company must have consistently filed its annual returns, submitted financial statements, and fulfilled all tax and statutory payroll obligations over the past five years.
Specific conditions are also set for companies importing certain food items. For instance, companies dealing with husked brown rice, grain sorghum, or millet must own and operate a milling plant with a capacity of at least 100 tons per day. This plant must have been operational for at least four years, and the company should possess sufficient farmland for cultivation. Similarly, firms importing maize, wheat, or beans are required to be agricultural companies with adequate farmland or agro-processing companies with an established out-grower network for cultivation.
The policy mandates that at least 75% of imported items must be sold through recognized commodities exchanges, with all transactions and storage documented. This measure aims to enhance transparency and ensure that the benefits of the zero-duty importation reach the broader Nigerian populace.
The guidelines also include strict sanctions for non-compliance. Participating companies are required to maintain comprehensive records of all related activities, which may be requested by the government for compliance verification. The guidelines warn that companies failing to meet their obligations under the import authorization will lose all waivers and will be required to pay the applicable VAT, levies, and import duties. This penalty also applies to companies that export the imported items in their original or processed form outside Nigeria.
This policy is effective from July 15, 2024, and will remain in force until December 31, 2024. It forms part of a broader strategy by the federal government to address Nigeria’s current food security challenges. The country is grappling with its highest cost of living crisis in decades, with food inflation soaring over 40%, according to the National Bureau of Statistics.
To combat the severe food shortage, the federal government announced a 150-day duty-free import window for essential food commodities, including maize, husked brown rice, wheat, and cowpeas. The initiative, driven by directives from President Bola Ahmed Tinubu, is intended to make basic foodstuffs more affordable for Nigerian citizens.
In its press statement, the Nigeria Customs Service emphasized that the zero-duty policy aims to reduce the high cost of essential food items in the market. “This measure is part of the government’s broader efforts to address food security challenges and ensure that basic foodstuffs are accessible to all Nigerians,” the NCS stated. However, the agency also noted that while this temporary measure addresses current hardships, it does not compromise long-term strategies to protect local farmers and manufacturers.
The guidelines also specify the basic food items eligible for the zero-percent duty rate, along with their corresponding ECOWAS Common External Tariff (CET) Harmonized System (H.S.) codes, previous duty rates, and new duty rates. For instance, husked brown rice, previously subject to a 30% duty rate, will now be imported duty-free. Similarly, duty rates for grain sorghum, millet, maize, wheat, and beans have been reduced to zero percent.
The Federal Ministry of Finance will periodically provide the NCS with a list of approved importers and their quotas to facilitate the importation of these basic food items within the framework of this policy.
This comprehensive approach underscores the federal government’s commitment to mitigating the impacts of the food crisis and ensuring that essential commodities remain within the reach of all Nigerians.
