Minister of Finance/Coordinating Minister of the Economy, Mr. Olawale Edun

The Federal Government has assured that the approval for zero duty and Value Added Tax VAT on the importation of select basic food items does not in any way undermine the long-term strategies put in place to ensure national food security by safeguarding local farmers and protect manufacturers.

This assurance comes on the heels of the release of guidelines on the implementation of the zero import duty and VAT on the select food items by the Nigeria Customs Service in line with the directive of President Bola Tinubu, which takes effect August 15-December 31, 2024.

The food items listed under the regulations include husked brown rice, which before now attracted 30 per cent duty, grain sorghum, which was formerly subject to five per cent duty payment and millet, which also had five per cent import duty rate.

Other food items include maize, which attracted five per cent duty payment, wheat, which had 20 per cent import duty rate and beans, which also was subject to 20 per cent      import duty rate.

According to a statement by the National Public Relations Officer of the Service, Chief Superintend of Customs, Abdullahi Maiwada, the initiative is a stop-gap measure by the government to mitigate to suffering of the citizens due to the high cost of basic food items.

The statement reads in part: “Drawing from the Presidential directives aimed at alleviating the hardship faced by Nigerians due to high prices of essential food items, the Nigeria Customs Service NCS is pleased to announce that His Excellency, the President of the Federal Republic of Nigeria Bola Ahmed Tinubu GCFR through the Honourable Minister of Finance and the Coordinating Minister of the Economy, Olawale Edun has approved the regulation for the implementation of a Zero per cent Duty Rate and Value Added Tax VAT exemption on selected basic food items. This policy is effective from July 15, 2024 and will remain in force until 31st December 2024.

“This measure aims to mitigate the high cost of food items in the Nigerian market by making essential commodities more affordable for citizens. The initiative is part of the government’s broader efforts to address food security challenges and ensure that basic foodstuffs are accessible to all Nigerians. However, it is important to emphasise that while this temporary measure is intended to address current hardships, it does not undermine the long-term strategies put in place to safeguard local farmers and protect manufacturers.”

The Service, which also released stringent guidelines for eligibility to participate in the zero-duty importation of the food items, noted that the implementation of the policy will focus on addressing the national supply gap. Part of the eligibility for the zero-duty importation of basic food items requires that the company must be incorporated in Nigeria and has been operational for at least five years. It must also have filed annual returns and financial statements and paid taxes and statutory payroll obligations for the past five years. For companies importing husked brown rice, grain sorghum, or millet, they are required to own a milling plant with a capacity of at least 100 tonnes per day and must have been in operation for at least four years, and must have enough farmland for cultivation.

Other requirements for those importing maize, wheat, or beans include that they must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation.

Maiwada also said: “The Federal Ministry of Finance will periodically provide the Service with a list of importers and their approved quotas to facilitate the importation of these basic food items within the framework of this policy. The policy requires that at least 75per cent of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded.

“Companies must keep comprehensive records of all related activities, which the government can request for compliance verification. If a company fails to meet its obligations under the import authorisation, it will lose all waivers and must pay the applicable VAT, levies, and import duties. This penalty also applies if the company exports the imported items in their original or processed form outside Nigeria.

“The Nigeria Customs Service, under the leadership of Comptroller General of Customs, Bashir Adewale Adeniyi MFR, remains committed to supporting government policies to enhance food security and promote economic stability. The Service urges all stakeholders to cooperate fully in implementing this initiative for the benefit of all Nigerians.”