FG Issues Guidelines For Zero-Duty Importation Of Basic Food Items

The Federal Government on Wednesday issued guidelines for the participants of the zero-duty importationof basic food items in Nigeria.

According to the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, any company that wants to participate in the Federal Government’s zero-duty importation of basic food items must be incorporated in Nigeria and must have been operational for at least five years.

In addition, the company must have filed annual returns and financial statements and paid taxes and statutory payroll obligations for the past five years, Nigeria customs service guidelines for implementation of zero duty rate on some basic food items released on Wednesday stipulates.

For companies importing husked brown rice, grain sorghum, or millet, they need to own a milling plant with a capacity of at least 100 tons per day, operate for at least four years, and have enough farmland for cultivation. Similarly, those importing maize, wheat, or beans must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation.

The policy requires that at least 75% of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded. In the new guidelines, the federal government inserts sanctions for breaches by participating firms.

It allows companies to 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, it restated also applies if the company exports the imported items in their original or processed form outside Nigeria”, it warned.

The policy is effective from 15th July 2024 and will remain in force until 31st December 2024.

Nigeria is currently facing the highest cost of living crisis in decades, with food inflation soaring over 40%, according to the National Bureau of Statistics.

As part of the wider measures to address the food shortage challenge, the federal government announced a 150-day duty-free import window for food commodities which include maize, husked brown rice, wheat, and cowpeas.

Part of the customs press statement on guidelines for implementation of zero duty rate on some basic food items read:” 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 Tinubu through the Honourable Minister of Finance and the Coordinating Minister of the Economy, Wale Edun has approved the regulation for the implementation of a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items”

“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”, customs said.

Customs spelt out basic food items eligible for the zero per cent duty rate which includes item description ECOWAS CET H.S. code previous duty rate + levy new duty. Husked brown rice 1006.20.00.00 30% 0%.
grain sorghum – other 1007.99.00.09 1007.90.00.00 5% .
millet – other 1008.29.00.00 5% 0%; maize – other 1005.90.00.00 5% 0%,wheat – other 1001.19.00.00 20% 0% and beans 0713.31.90.00 20% 0%.

The statement said the federal ministry of finance will periodically provide the NCS with a list of importers and their approved quotas to facilitate the importation of these basic food items within the framework of this policy.