Business & Strategy

FG to Forfeit N188bn on Food Import Waiver – Customs

Written by Jerry Alomatu on August 14, 2024

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The Nigeria Customs Service (NCS) has projected a potential revenue loss of about N188.37 billion for the federal government due to the suspension of import duties on certain food items.

Bashir Adeniyi, Comptroller-General of NCS, disclosed this during the second economic confidential lecture and book presentation held in Abuja on Tuesday. The event, titled ‘Leveraging on Effective Communication for Revenue Generation and Economic Development,’ focused on the financial implications of the recent policy shift.

The federal government announced on July 10 that it would suspend duties, tariffs, and taxes on essential food commodities, including maize, husked brown rice, wheat, and cowpeas, to help alleviate inflation. This initiative introduces a 150-day duty-free import period within a broader 180-day framework.

According to Adeniyi, the six-month suspension could lead to a significant revenue shortfall of approximately N188.37 billion. He underscored that this decision reflects the government’s prioritization of food security over short-term financial gains. Between 2020 and 2023, imports of these food items contributed over N191 billion in customs duties and more than N562 billion in additional levies.

Adeniyi also highlighted President Bola Tinubu’s initiative to reduce food transportation costs through the use of compressed natural gas (CNG), potentially cutting expenses by up to 60 percent. This move is expected to make food more affordable and further support food security.

Despite efforts to increase local food production, the rising import costs reveal ongoing challenges in achieving food security and stabilizing prices. Adeniyi emphasized the need for the NCS to adapt its procedures to accommodate the expected surge in food imports and to prevent the misuse of the duty-free policy.

The NCS plans to streamline customs processes, bolster inspection measures, and enhance anti-smuggling efforts to ensure the efficient handling of tariff-exempt food items and prevent the entry of non-listed goods.