FG Loses N188.37bn to Six-Month Food Tariff Exemption
By Patience Ikpeme
The Federal Government of Nigeria will forgo approximately N188.37 billion in revenue over the next six months following its recent decision to grant a temporary tariff exemption on the importation of six key food items. This initiative aims to alleviate the acute food shortage currently plaguing the nation and address the escalating cost of living.
Wale Adeniyi, Comptroller General of the Nigeria Customs Service (NCS), disclosed this financial sacrifice on Tuesday in Abuja during a keynote address focused on enhancing food trade through efficient customs practices in Nigeria.
Nigeria is grappling with its highest cost of living crisis in decades, driven by food inflation that has soared to over 40%, according to the National Bureau of Statistics. In response, the federal government announced a 150-day duty-free import window for critical food commodities, including maize, husked brown rice, wheat, and cowpeas. Adeniyi praised the government’s swift action, emphasizing that the tariff exemption is a significant measure to make food more accessible and affordable for Nigerians.
Adeniyi provided detailed figures to underscore the scale of the revenue sacrifice. “From 2020 to 2023, the total import value of these food items—beans, maize, rice, and wheat—was a staggering N3.82 trillion. During this period, these commodities generated N191.72 billion in customs duty and N561.78 billion in levies paid to the government,” he revealed. For instance, wheat alone accounted for N3.78 trillion in import value, generating N189.21 billion in duty and N561.68 billion in levies. These figures highlight the government’s significant commitment to prioritizing food security over short-term revenue goals.
However, Adeniyi also acknowledged the potential risks associated with the tariff exemption, particularly the possibility of misclassification or misdeclaration of goods. To mitigate these risks, he stressed the need to enhance inspection and verification processes. “It is imperative that we ensure the benefits of these tariff suspensions are passed on to consumers in the form of lower food prices,” he noted.
Adeniyi also highlighted the importance of engaging with stakeholders, including importers and clearing agents, to ensure clear communication and effective implementation of the tariff exemptions. He emphasized that this policy shift provides a unique opportunity for the NCS to gather data on how tariff removals impact import volumes and food prices. The insights gained will be crucial for informing future policy decisions.
In addition to facilitating the importation of these food staples, Adeniyi cautioned against undermining local agricultural production. “While facilitating the import of these staples, we must also be mindful of supporting local production. Our processes should not inadvertently discourage domestic agricultural initiatives,” he warned.
To support the smooth implementation of the tariff exemptions, Adeniyi outlined several special measures the NCS will undertake. These include issuing tariff exemption guidelines in coordination with the Ministry of Finance, creating a special corridor to expedite the clearance of food items, and deploying specially trained officers to manage these activities. “This dedicated channel will streamline the importation process, reducing clearance times and potential bottlenecks,” he explained.
Furthermore, the NCS has initiated a Pre-release of Perishable Items at the nation’s entry points to ensure the quality and freshness of imported food items. This measure is crucial in reducing waste and ensuring that vital supplies reach consumers in optimal condition. The NCS is also in the final stages of completing a comprehensive Time Release Study, designed to identify bottlenecks in the current clearance process. The findings from this study will guide targeted improvements in customs operations, ultimately reducing clearance times and enhancing overall efficiency.
The federal government’s decision to forgo significant revenue through this six-month tariff exemption underscores its commitment to addressing the food crisis and easing the financial burden on Nigerians. As the NCS implements these measures, the focus will remain on balancing the facilitation of food imports with the need to support and protect local agricultural initiatives.
