Nigeria is planning a six-month suspension of import duties on essential items such as staple foods and drugs.
Nigeria is considering suspending import duties on staple
food, drugs and other essential items for six months to slow inflation in
Africa’s most-populous nation, Bloomberg reported on Wednesday.
The government may also waive levies on fertilisers, poultry
feed, flour and grains, according to a document seen by the news medium that
has been sent to President Bola Ahmed Tinubu for his consideration.
As part of a plan to get its finances in order, the administration will also stop borrowing from the central bank through so-called ways and means advances.
Tinubu, who completed a year in office on May 29, is under
pressure to ease the cost of living in Nigeria after inflation accelerated to
33.7 per cent in April, the fastest pace
in 28 years.
Previous attempts haven’t worked. Surging prices and a
weakening naira — the world’s worst-performing currency this year after the
Lebanese pound — have prompted the central bank to raise interest rates to a
record.
A government spokesman declined to comment because the
president hadn’t signed the document.
The so-called Inflation Reduction and Price Stability Order
will require the Ministry of Finance and the Central Bank of Nigeria (CBN) to
come up with a plan to provide low-interest loans to the agriculture,
pharmaceutical and manufacturing sectors, the report added.
“This productive deployment will ultimately improve outputs
and reduce inflation,” according to the document.
Measures taken by the government last year haven’t yielded
results. In July, Nigeria declared a state of emergency to allow the government
to take exceptional steps to improve food security.
The same month, the government said it raised $500 million
to transform food production. A few weeks later, Tinubu announced a 500
billion-naira ($335 million) package aimed at improving food supply, easing
transportation costs and boosting manufacturing.
Nigeria, where at least 40 per cent of more than 200 million
people live in extreme poverty, is struggling to control price gains after
Tinubu ordered the implementation of policies to allow the naira to trade more
freely and remove fuel subsidies.
A threefold increase In electricity tariffs, high food costs
and a 39 per cent depreciation in the naira this year are fanning inflation.
The president is also likely to suspend value added tax on
automotive gas oil or diesel, some basic food items and semi-processed staple
food items such as noodles and pasta.
The proposal also includes the suspension of VAT on raw-material inputs for the manufacture of food items, electricity and public transportation, as well as agricultural inputs and produce and pharmaceutical products for the rest of the year.