Nigeria Implements Zero-Duty Policy on Basic Food Items to Curb Rising Prices

Nigeria Implements Zero-Duty Policy on Basic Food Items to Curb Rising Prices

In a significant move to combat the rising cost of essential food items, the Federal Government of Nigeria has approved a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items. This policy, which came into effect on 15th July 2024, will remain in place until 31st December 2024.

This initiative, announced by the Nigeria Customs Service (NCS), follows a directive from President Bola Ahmed Tinubu and was executed through the Honourable Minister of Finance and Coordinating Minister of the Economy, Olawale Edun. The policy is part of a broader strategy to alleviate the economic hardships faced by Nigerians due to skyrocketing food prices, while also ensuring food security across the country.

The zero-duty policy applies to key food items such as husked brown rice, grain sorghum, millet, maize, wheat, and beans. These items, previously subjected to duty rates ranging from 5% to 30%, will now be imported duty-free, making them more affordable for Nigerians.

To participate in this zero-duty scheme, companies must be incorporated in Nigeria and have been operational for at least five years, with a track record of filing annual returns and fulfilling tax obligations. Additionally, companies importing specific items like husked brown rice must operate a milling plant with a minimum capacity of 100 tons per day and own sufficient farmland for cultivation. Agricultural companies importing maize, wheat, or beans must also demonstrate significant local farming capabilities or have an out-grower network for cultivation.

The Federal Ministry of Finance will provide the NCS with a list of approved importers and their quotas. To ensure compliance, at least 75% of imported items must be sold through recognized commodities exchanges, with all transactions and storage documented. Companies that fail to meet the policy's requirements will lose their waivers and be required to pay the applicable VAT, levies, and import duties. This penalty also applies if the imported items are exported in their original or processed form outside Nigeria.

The Comptroller General of Customs, Bashir Adewale Adeniyi, has emphasized the NCS’s commitment to supporting government policies that enhance food security and promote economic stability. The NCS has called on all stakeholders to fully cooperate in the implementation of this policy to benefit all Nigerians.

This policy is expected to provide significant relief to Nigerians by reducing the cost of essential food items while supporting the country’s long-term agricultural goals.