Import tax waiver on food items: Good move, but…
The recent decision by the government to grant import tax waivers on food items is quite commendable. As a short-term measure, it has come to bridge the widening gap between food demand and supply in the country. And since food is a basic daily requirement, it is a welcome development, if only as an ad […]
The recent decision by the government to grant import tax waivers on food items is quite commendable. As a short-term measure, it has come to bridge the widening gap between food demand and supply in the country. And since food is a basic daily requirement, it is a welcome development, if only as an ad hoc measure, while long-term solutions are worked out without delay.
We know that Nigerians have not had it so bad in a long time in our history, as far as the supply of food in the country is concerned. Food inflation is currently at 40.87 per cent, an all-time high, which suggests that the average Nigerian family is currently under intense pressure to provide food to its members. The meteoric rise in the general price level in the economy has compounded this.
It is, therefore, pertinent to view this measure as simply a short-term measure that must be seen as such. We wish to point out that this policy is a two-edged sword and, if not handled properly, could destroy other aspects of our economy. The 150-day or 180-day frame of the policy implementation should be strictly adhered to, with stringent enforcement mechanisms put in place. It is open to abuse and if this happens, what was intended to save the economy could turn around to sink it.
First, the government should ensure that food being imported under the policy gets to the market within the period. Otherwise, the importers could hide under the guise of implementing this scheme to fill their warehouses with subsidised foods and wait for the exercise to end before flooding the markets with the same items at exorbitant prices. This is one of the ways that this policy could hurt rather than help the country.
- Naira depreciation responsible for N1.7trn manufacturers’ losses – FIRS
- NG-CARES: FG reimburses states, FCT N438bn to boost social protection
The government must not overlook the fact that the fundamental reason why we have found ourselves in this quagmire is because our farmers can no longer go to their farms due to insecurity and banditry. No country can progress under this kind of siege. It means that what we have at hand is a long-term problem. Therefore, it will not make sense to hope that we can solve a long-term challenge with this short-term, ad hoc policy designed to last about six months.
Therefore, the government must do everything possible to curb or even eradicate this menace. This security challenge is not a new development in the country. The fact that it has lingered for so long, and has become a significant cause for this recourse to food importation, is a serious indictment on the part of the government.
Also, it is time for the government to subsidise agriculture as a special area of business activity. Government should know that the developed countries subsidise their farmers, a practice that helps to ensure the availability of food all year round in those countries. Nigeria should not be fooled by the rhetoric from the International Monetary Fund (IMF) and the World Bank, which try to dissuade our leaders from offering any form of subsidy to support economic activities.
In the European Union, the Common Agricultural Policy, which has been in existence since 1962, provides help to farmers in various ways. Figures available from the European Parliament show that as much as €386.6 billion has been set aside for farming under the EU’s budget for 2021-2027. Out of this amount, €291.1 billion is set aside for the European Agricultural Guarantee Fund, which provides income support for farmers.
Unfortunately, the opposite is the case in Nigeria as our farmers are often left to fend for themselves each farming season.
Our farmers are often weighed down by rising input costs, a harsh economic environment, and a defective marketing system made up of exploitative middlemen who pay pittance to the farmers for their produce, and turn around to sell at huge profit margins.
Daily Trust believes that it is time for governments, at all levels, to provide adequate and sustainable support to our farmers to ensure we attain food security. This is the only way to ensure sustainable development and the time is now.