Nigerian Government to Suspend Tariffs and Import Duties on Staple Foods and Pharmaceuticals

 

Wale Edun, Minister of Finance

In an effort to combat rising inflation, the Nigerian government has announced plans to suspend tariffs and import duties on essential items such as staple foods, pharmaceuticals, and agricultural inputs. This initiative is part of the Accelerated Stabilisation and Advancement Plan (ASAP), which was recently presented to President Bola Ahmed Tinubu by the Minister of Finance, Wale Edun.

 

The ASAP aims to alleviate Nigeria's economic challenges, as the country's headline and food inflation rates have soared to 33.69 percent and 40.53 percent, respectively. The surging inflation has eroded purchasing power, exacerbating the financial hardship faced by many Nigerians.

 

Edun explained that the fiscal measures outlined in ASAP are designed to steer Nigeria out of its current economic difficulties. The plan includes suspending import duties and tariffs on staple food items, raw materials, and other inputs essential for manufacturing and agricultural production. These items include fertilizers, seedlings, chemicals, pharmaceutical products, poultry feeds, flour, and grains. Additionally, millers will be permitted to import paddy rice at zero duty and Value Added Tax (VAT) for six months.

 

"The import duty and other tariffs on staple food items, raw materials, and other direct inputs used for manufacturing, as well as inputs for agricultural production, including fertilizers, seedlings, chemicals, pharmaceutical products, poultry feeds, flour, and grains, are hereby suspended for six months," the document states. "Value Added Tax, where applicable, is suspended on basic food items and semi-processed staple food items such as noodles, raw material inputs for food manufacturing, electricity, public transportation, agricultural inputs and produce, and pharmaceutical products for the rest of 2024."

 

Expert Reactions to the Fiscal Measures

Muda Yusuf, the Director of the Centre for the Promotion of Private Enterprise, praised the proposed measures in ASAP. He highlighted that the relaxation of import duties is a positive step toward addressing many economic issues faced by real sector investors. Yusuf emphasized the need for swift implementation of the plan to ensure Nigeria's economic progress.

 

"The proposed Accelerated Stabilisation and Advancement Plan is a commendable initiative from the Finance Minister. It addresses critical economic issues troubling real sector investors, including high interest rates, costly cargo clearance at ports, and high import duties. Reducing import duties on essential raw materials for manufacturers will help mitigate inflationary pressures, particularly food inflation," Yusuf stated. "The fiscal measures reflect the administration's responsiveness to investor concerns. We urge for prompt implementation once the plan is approved by the president."

 

Minimum Wage Negotiations

The introduction of ASAP coincides with ongoing negotiations over a new minimum wage in Nigeria. Recently, the Organised Labour movement shut down the Nigerian economy due to the government's failure to implement a new minimum wage. The strike was suspended after the government committed to raising the minimum wage above N60,000.

 

The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) had previously proposed a minimum wage of N494,000. As negotiations continue, Senator Orji Uzor Kalu suggested a range of N75,000 to N90,000, while Paul Alaje, Chief Economist and Partner at SPM, recommended a minimum wage of at least N100,000.

 

The Nigerian government’s efforts to implement the ASAP and address minimum wage concerns are pivotal steps toward stabilizing the economy and improving living standards for all Nigerians.