The Federal Government‘s ambitious plans to reduce food prices through a zero percent duty and exemption from value-added tax on selected basic food items are increasingly facing challenges, as the average price of imported food items has soared to an alarming 878.3 price point index in September 2024.
This troubling increase reflects broader economic pressures that have impeded efforts to alleviate food inflation in Nigeria.
On July 8, 2024, the government announced a 150-day duty-free import window for essential food commodities, including maize, husked brown rice, wheat, and cowpeas, aimed at mitigating the effects of food scarcity and price hikes across the country.
However, nearly three months after the announcement, the scheme has yet to take effect, primarily due to bureaucratic delays and the Federal Ministry of Finance’s failure to publish a list of qualified importers as required by guidelines issued by Customs in August.
At a recent press briefing, Minister of Finance, Wale Edun indicated that the government has ordered maize and wheat imports to help stabilize the food market. Nonetheless, the anticipated policy implementation has not materialized, and the prices of imported food continue to climb.
The National Bureau of Statistics (NBS) reported a significant rise in the average price of imported food, with a 30.6 price index increase from August to September 2024.
This reflects an 8.97 percent rise from the 806.0 average price index recorded in July 2024, when the duty-free import initiative was announced.
Year-to-date, the average imported food price has surged by 26.81 percent, highlighting a growing dependence on foreign food products amid domestic supply shortages.
The troubling trend of rising inflation has persisted throughout the year, with imported food inflation rates climbing from 26.29 percent in January to 34.83 percent in May.
The monthly analysis shows a continuous upward trajectory, causing concern among consumers and policymakers alike.
In the second quarter of 2024, the Central Bank of Nigeria (CBN) released N547.7 billion ($823.19 million at the official exchange rate) to support food imports, marking a reduction of 20.6 percent from the $689.88 million allocated in the first quarter. Over the past six months, the CBN has disbursed a total of N1.73 trillion to facilitate food imports.
