• Stakeholders lament complex import guidelines
• Customs, others charged to speed up implementation
The Federal Government is reportedly considering extending the timeline of the conditional duty-free food importation policy before the initial timeline elapses.
This comes as the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed that the FG has started importing food, riding on the interventionist policy.
In a WhatsApp message exchange with The Guardian through a third party last week, Edun disclosed that the “government has started its own imports” while it allows others to do the same in a “carefully managed process”.
The minister, however, did not either confirm the extension plan or provide details of the government’s participation in the scheme.
But another source in the ministry confided that the government would extend the programme by at least another 150 days in line with its determination to crash the prices of food items, which have increased by over 30 per cent in some cases since the policy was announced.
There are also indications that some of the operational terms are being reviewed to relax them. Stakeholders have observed that the policy would not be effective in its original template, calling for a re-visit of some of the conditions.
Close to four months after the FG unveiled the scheme to curb the rising food prices, the initiative is still shrouded in uncertainty even as importers are said to have shunned it.
Whereas a clear directive was handed to the Nigeria Customs Service (NCS) to begin the process on August 14 or about 90 days ago, there is no indication that the zero-import duty on basic food items has begun in earnest except for the recent disclosure by the finance ministry.
This comes as the prices of foodstuffs have continued to maintain an upward trend in major markets around the country.
Since mid-August when the programme was billed to start, rice, a major item targeted by the policy, has since moved up by nearly 40 per cent, from N80,000 per 50kg bag to N110,000. Price of beans has also increased by 16 per cent within the period.
With the fast-approaching harvest making little or no impact on the prices of staple food items, Nigerians may face one of the worst yuletides in decades.
The fiscal incentive was expected to rein in upbeat inflation expectations and crash prices of the targeted cereals with a possible spiral effect on other food. But experts said the lack of clarity may have triggered the adverse reaction that followed the announcement.
With the cost of petrol well above N1,000 per litre, which has triggered fresh transportation costs amid stagnate income and fresh foreign exchange (FX) crisis, there may not be a respite in sight yet.
While Nigerians are eagerly awaiting the relief, stakeholders said the crises posed by official bottlenecks, lack of clarity and absence of timelines within which specific tasks would need to be addressed head-on.
According to the NCS guidelines, companies must be incorporated in Nigeria and operational for at least five years to participate.
Only companies with filed yearly returns, financial statements and paid taxes and statutory payroll obligations for the past five years are eligible.
Additionally, companies importing husked brown rice, grain sorghum, or millet must own a milling plant with a capacity of at least 100 tonnes per day, have operated for at least four years, and possess sufficient farmland for cultivation. Companies importing maize, wheat or beans must have substantial farmland or be feed mills/agro-processing companies with an out-grower network for cultivation.
Also, 75 per cent of the imported items must be sold through recognised commodities exchanges, with all transactions and storage properly recorded.
The President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, noted that the complexity of the guidelines and regulations has made compliance challenging for companies.
Amiwero, who has served on presidential committees overseeing import clearance procedures and fiscal policy implementation, argued that the requirements are not designed to provide immediate relief.
He criticised the slow progress and the lack of clarity on policy execution.
“The problem is that the government itself has not come out clear on that policy. The policy looks a little bit unclear, and there’s a lot of conflict and confusion. When a government has a complex situation and directive, it is very difficult to execute. Those guidelines are not for relief. When the government wants to give relief to cushion the effects of hardship, they don’t impose so many guidelines,” Amiwero explained.
He emphasised the urgency of the situation, as food prices remain high while the policy’s main achievement is contributing to the uncertainties within the food value chain.
With Yuletide, he warned that further delay could exacerbate the challenges faced by consumers, particularly as the peak period for food demand draws near.
Addressing the preparedness of stakeholders such as importers and licensed customs agents, Amiwero said that importers must take the lead as they are the ones initiating the importation process.
He stressed that the readiness of importers is crucial for the successful execution of the zero-duty waiver and called on the government to reassess the current approach, streamline the process, and ensure the policy achieves its intended goal of easing food prices for Nigerians.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, also expressed deep concern about the prolonged delays in implementing government policies intended to alleviate the suffering of citizens.
While acknowledging President Bola Ahmed Tinubu’s efforts to address these challenges, he emphasised that the slow pace of policy execution remains a significant obstacle.
Yusuf highlighted the struggles faced by companies in the private sector, which, despite meeting the established guidelines, have been unable to access the benefits of certain government policies.
He criticized the bureaucratic processes that hinder effective implementation, noting that the complex guidelines create unnecessary barriers that delay the intended benefits.
“It is a matter of grave concern that a policy meant to bring relief to the citizens is taking so long to be implemented. The beauty of a policy lies in its expeditious implementation, especially when we are dealing with urgent matters such as hardship and hunger,” Yusuf added.
Yusuf also drew attention to similar delays in the pharmaceutical sector, particularly regarding import duty and tax waivers on pharmaceutical raw materials and medical equipment.
“The issue is suffering practically the same fate. We cannot afford to continue in this kind of trajectory,” he warned.
He stressed the need for reforms within the government bureaucracy to ensure faster and more efficient policy execution, urging a thorough reassessment of the policy implementation framework.
When contacted by The Guardian, the National Public Relations Officer of the NCS, Abdullahi Maiwada, clarified the Customs’ position, noting that perceived delays are not on the part of the Service.
He reaffirmed the NCS’s preparedness to implement the government’s zero-duty waiver policy on food imports.
“As an agency responsible for implementing government fiscal policies, we are always prepared and consistent in the trade facilitation of cargo, whether those under exemption or those with duty payments,” Maiwada explained.
Meanwhile, there were unconfirmed reports that multinational companies including Olam Agril, Waccot and some others have begun the importation of food grains.
The belief that this step will crash food prices has been waved aside by experts who warned that food import would not be cheaper at the N1,700 exchange rate.
Industry players urged the government to reduce post-harvest losses which account for N2.7trn annually.
They argued that food imported at the current dollar rate of N1,750 to a dollar cannot be sold cheaply.
While it is not clear how many tonnes of food that is being imported, the companies had expressed their readiness to fully utilise the window provided by the government.
The Managing Director of Green Sahara Farms Suleiman Dikwa said the current food crisis challenge bedevilling the nation is more of affordability than availability wondering that if truly there is scarcity, why does the country still export?
He said: “In Maiduguri where I come from, grain farmers have complained that the rich people often come to buy up their produce during harvest season, who then hoard it and create artificial scarcity so that they can hike the price.”
Dikwa noted that this was not the first time the government had provided a waiver to allow food import as the Buhari administration also gave a waiver, which did not record a positive impact.
He pointed out that the government is not investing strategically to boost food production saying the United States, for instance, invests $5 billion annually in maize production. He said these alone make it cheaper to import than to buy locally, but unfortunately, most of the grains imported are genetically modified crops.
The MD of Green Sahara Farms added: “Before declaring food importation for six months, there is a need for strategic intent which I do not see on the part of the government. Between the time the government announced the plan to import, the dollar has further depreciated by almost 10 per cent. When they announced the plan dollar was around N1400, now it’s around N1750 so the food being imported cannot be cheap.
“What the government should have dealt with is that Nigeria has a post-harvest loss of about N2.7trn every year. So, instead of importation of food, why not invest in reducing these post-harvest losses? By doing so, there will be more food in the system and there will be more reward. Once you improve production, you are improving wealth. Farmers still dry food by the roadside, many of them do not have harvesters.”
On his part, Chairman of the National Association of Nigeria Traders, Ken Ukoha, who is also an importer said many importers are willing to take advantage of the programme but they are afraid of government policy inconsistency.
He said the Nigeria Customs Service (NCS) must be made to understand the full implementation modalities so that the implementation will be hitch-free and that there will be no need for back and forth, wherein importers bring in their goods and then start the negotiation process all over.
Ukoha stressed: “There should also be an assurance by the government in terms of the domestic environment by removing all the bottlenecks associated with multiple taxations by touts on the roads, police as well some local government task force.” (Guardian)
