Nigeria Set to Lose N188bn in Revenue Amid Duty Waiver for Staple Food Imports

The Nigerian government is poised to forfeit an estimated N188.37 billion in revenue following a duty waiver granted for the importation of staple foods over the next six months, according to the Nigeria Customs Service (NCS). This significant loss, announced on Tuesday, underscores the government’s prioritization of food security over short-term fiscal gains.

During a press briefing in Abuja, the Comptroller-General of Customs, Adewale Adeniyi, highlighted the far-reaching implications of this policy, particularly the waiver’s impact on the NCS’s revenue collection capabilities. Addressing the theme ‘Facilitating Food Trade through Efficient Customs Process: Best Practices,’ Adeniyi elaborated on the delicate balance the service must maintain between trade facilitation and revenue generation.

“The removal of tariffs and import duties on key staples such as rice, wheat, maize, and sorghum (beans) for the next six months represents a considerable sacrifice in terms of potential revenue,” Adeniyi stated. He projected that this tariff suspension could result in a revenue loss of approximately N188.37 billion.

This waiver comes in the wake of a 150-day duty-free import window announced by the Federal Government on July 8, 2024, aimed at reducing food inflation across the country. The measure includes the suspension of duties, tariffs, and taxes on food commodities like maize, rice, wheat, and cowpeas, imported through land and sea borders.

Adeniyi provided a detailed account of the economic landscape, revealing that between 2020 and 2023, Nigeria spent a staggering N3.82 trillion on the importation of wheat, beans, rice, and maize. Despite efforts to bolster local food production, the rising food import bill has highlighted persistent challenges in achieving food security and stabilizing domestic prices.

From 2020 to 2023, these staple imports generated N192 billion in customs duty and N562 billion in levies. Wheat imports alone accounted for N3.78 trillion, yielding N189 billion in duties and N561 billion in levies. In comparison, maize imports, valued at N34.3 billion, contributed N2.3 billion in duty. Despite restrictions, rice imports reached N195 million, with N19 million in duty and N97 million in levies, while beans imports valued at N731 million contributed N146 million in duty.

Adeniyi emphasized that the government’s policy, while necessary to address food insecurity, would require the NCS to adapt its processes swiftly to handle the anticipated surge in food imports. “The removal of tariffs is likely to lead to a surge in food imports. We must prepare for this increased volume, ensuring that our ports and border stations can handle the influx without creating bottlenecks,” he noted.

Additionally, Adeniyi underscored the need to prevent potential abuse of the policy through enhanced inspection and verification processes, particularly as the tariff suspension might lead to misclassification or misdeclaration of goods.

Reflecting on recent government initiatives, Adeniyi observed a positive trend in food prices, suggesting early signs of success from the new policies. However, he acknowledged that achieving long-term food security remains a daunting challenge.

In a related development, Adeniyi handed over the leadership of the World Customs Organisation West and Central Africa sub-region to his successor, Ahmadou Konate. During the handover ceremony in Abuja, Adeniyi urged the new vice-chair to prioritize adequate funding for customs administration in the region, a move he believes will enhance revenue generation and overall efficiency.