NLC, OPS Fear Rising Inflation Amid Failed Food Import Policy

 

The Nigeria Labour Congress and members of the organised private sector have strongly criticized the Federal Government for its slow pace in implementing a duty waiver on imported food, which was announced in July this year. The delay has led to increased food prices, exacerbating the already dire food crisis in the country.
They also expressed fear that the food items might continue to rise in price.

The Federal Government’s attempt to address the persistent food price hike through a duty waiver on imported food has been fraught with delays.

In August, the Nigeria Customs Service was directed to implement the zero per cent import duty and Value-Added Tax exemption on basic food items following President Bola Tinubu’s approval.

However, the policy remains unimplemented less than two days before the duty-free import window closes.

The Ministry of Finance confirmed the approval in a letter to the NCS dated August 8, 2024.

This development was also corroborated by the NCS in a document.

In a circular titled “Approval for the implementation of zero per cent duty rate on basic food items,” the NCS stated that the letter signed by Deputy Comptroller-General C.K. Niagwan outlined the items eligible for the policy.

“I am directed to forward herewith a copy of the Federal Ministry of Finance letter, confirming His Excellency, Mr President’s approval for the implementation of zero per cent duty rate and Value Added Tax exemption on some basic food items,” the letter read.

The food commodities listed include maize, husked brown rice, wheat, grain beans, and millet. The letter also specified that the policy is restricted to these items and is effective from July 15 to December 31, 2024.

“The importation of these items shall be limited to investors with milling capacity and a verifiable Backward Integration Programme for some of the items,” the letter added.

Despite this announcement, the Federal Government has yet to implement the policy, raising concerns among stakeholders.

Efforts to obtain a response from the Ministry of Agriculture and Food Security and the Ministry of Finance were unproductive.

The Director of Information at the Ministry of Agriculture, Dr Joel Oruche, when contacted by phone, stated, “Please don’t call me; send your inquiry to my WhatsApp instead. If I am unable to get an answer for you, it is because I could not reach the relevant department. Many people are out of town, but I will try to find out what you need. If I don’t get back to you, it means I was unable to obtain the information.”

Also, the Director of Information and Public Relations at the Ministry of Finance, Mohammed Manga, said he was on leave and unavailable to respond to our correspondent’s enquiry.

No further response had been received as of the time of filing this report.

Stakeholders now anxiously await the government’s action on the directive as the December 31 deadline looms.

In his response, the National Public Relations Officer of the Nigeria Customs Service, Abdullahi Maiwada, said no one has been approved to get the import duty waiver yet for the NCS to implement.

He said, “If there is a policy and someone has to give approval for something to be imported, he should go and ask the person how many people have gotten the approval to import the items.

“I speak for the NCS and not the Federal Government. I can’t speak on what concerns the Federal Government, I only speak for the service. Our own is to implement government policies. If there is any duty waiver or whatever, our own is to implement it.”

NLC, OPS Kick

Reacting to the development, the Nigeria Labour Congress Lagos Council Chairman, Mrs Funmi Sessi, criticised the Federal Government for failing to implement its zero-tax policy on essential food items and medications six months after its announcement.

Sessi decried the lack of action, describing it as a “systematic failure.”

“This is a failure on the part of the government,” she said. “The government should subsidize food production as it happens in other developed countries where subsidies make food affordable and control inflation. But here, the government announced a zero-tax policy, yet nothing has been implemented. Nigerians are still suffering from the high cost of food, and the prices keep soaring.”

Sessi highlighted the dire consequences of the inaction, noting that a 50kg bag of rice, which sold for N26,000 before the current administration, now costs N100,000.

She urged the government to fulfil its promises to bring relief to citizens.

“Nigerians were promised renewed hope, but this hope has not translated into anything tangible. The zero-tax policy on food and medications has become a policy somersault,” she stated.

She also lamented the recent stampedes during food palliative distributions, emphasizing that it underscores the harsh reality of food scarcity and unaffordability.

“We have seen people stampede themselves to death over little palliatives. This shows that food prices are still too high for the average Nigerian to afford,” Sessi added.

With the year almost ending, Sessi called on the government to urgently address inflation to ensure Nigerians can afford necessities.

“There is no magic the government can perform now, but they must act to bring inflation down so that more Nigerians can afford decent meals,” she stressed.

Also reacting to the development, the National President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said food, being the highest driver of inflation for months past, truly needed all forms of government interventions to pull inflation down.

He said, “Some of us were elated when the government announced zero duty and that VAT shall be removed on food importation, knowing quite well that we can’t sustainably produce the volume of our food consumption at the moment.

“However, with the rather slow or non-implementation of VAT removal as against the FG promise, prices of food and its derivatives will continue to soar, driving inflation higher.

“It implies that poverty and hunger will remain unabated. This will have direct implications on the health, nutrition, and overall wellbeing of the majority of the citizens.”

In appealing to the Federal Government, Egbesola said, “Our appeal to the government is to make this promise a reality so that food will still be afforded and accessible to the already impoverished and poor masses.”

The President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said there has been no evidence of the implementation of the policy because food prices are still high.

“There is no evidence in the market of the effects of that policy announcement. There are none of the products like rice and other items mentioned in that policy that are showing lower prices in the market,” he stated.

Idahosa urged the government to explain why its policy meant to ease food inflation by crashing market prices and ultimately rescuing the country from food insecurity was not yet in full swing.

“Whatever the mode of operation of that policy, it has not resulted in any significant reduction of the products,” he asserted. “So it is for the government agencies to now explain why it has not worked because if it had worked, we would have seen a significant reduction.”

Meanwhile, the National Vice President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said it was not good enough for the Federal Government to not implement as promised.

He said, “If it wasn’t implemented, then that simply wasn’t good enough. It’s not right to promise something and then fail to implement it. If it had been implemented, it would have significantly reduced the cost of the items listed under the duty-free policy allowance.

“This would have greatly benefited those in that sector by increasing their turnover since their costs would have decreased. With lower costs, they could have reduced their prices as well, and things might not have escalated to the extent we see today.

“My advice to the government is to seriously consider implementing this policy. At this point, we need every possible measure to alleviate the suffering of the people. The government must do everything within their power to reduce the cost of not just food items, but all essential commodities that people rely on daily, especially for those in the lower-income brackets.”

Food Inflation Spikes

As the delay persists, Abuja and 19 states recorded food inflation rates above 40 per cent in November 2024, according to the Consumer Price Index report from the National Bureau of Statistics.

In addition to Nigeria’s capital city (Abuja), the 19 states with food inflation rates above 40 per cent in November 2024 include Sokoto, Yobe, Edo, Gombe, Kebbi, Abia, Zamfara, Anambra, Kano, and Oyo.

Others include Plateau, Enugu, Jigawa, Niger, Borno, Kaduna, Taraba, Ebonyi, and Bauchi.

These 19 states comprised about 53 per cent of the total states in Nigeria.

Economic Confidential observed that Sokoto topped the list with a food inflation rate of 51.3 per cent, a slight decrease from 52.19 per cent recorded in October.

Yobe followed closely with a sharp increase to 49.69 per cent in November, up from 42.13 per cent in the previous month.

Edo State came in third with 47.77 per cent, rising marginally from 46.56 per cent in October.

Other states with notable food inflation rates include Gombe, which climbed to 46.63 per cent in November compared to 45.35 per cent in October, and Kebbi, where food inflation surged to 46.29 per cent from 43.34 per cent.

Abia State recorded a food inflation rate of 46.0 per cent in November, increasing from 43.25 per cent in October, while Zamfara rose to 46.01 per cent from 41.66 per cent.

Anambra State saw its food inflation jump to 45.94 per cent, up from 41.09 per cent, while Kano experienced a rise to 45.34 per cent compared to 42.47 per cent in the previous month.

With a notable surge, Oyo State recorded 44.38 per cent in November, up from 39.29 per cent.

Other states where food inflation exceeded 40 per cent include Plateau at 43.86 per cent, Enugu at 43.32 per cent, and Abuja, where the food inflation rate climbed to 42.84 per cent in November, rising from 40.05 per cent in October.

In Niger State, food inflation increased to 42.25 per cent from 39.80 per cent, while Kaduna rose to 41.78 per cent from 41.14 per cent.

Taraba saw its food inflation rate rise from 38.60 per cent to 41.44 per cent, Ebonyi increased to 41.17 per cent from 39.03 per cent, and Bauchi rose to 40.48 per cent in November, compared to 37.49 per cent in October.

According to the NBS report, general food inflation has seen a sharp rise, reaching 39.93 in November 2024, up from 32.84 per cent in the same period last year.

Also, Nigeria’s imported food inflation surged to 42.29 per cent in November 2024, increasing from 40.96 per cent in October 2024 by a 1.33 percentage point.

The significant increases in food prices across several states aggravate the cost-of-living crisis for millions of Nigerians.

This sharp rise has been attributed to multiple factors, including currency devaluation, global supply chain disruptions, and inefficiencies in domestic policies.