The Nigeria Customs Service (NCS), has said the federal government’s directive for the suspension of a six-month tariff could result in the loss of N188.37 billion in revenue.
Adewale Adeniyi Comptroller –General, of Nigeria Customs Service (NCS), said this yesterday in Abuja while delivering a keynote address on “Facilitating food trade through Customs process: Best Practices for Nigeria”.
After giving an analysis of the previous cost implications of the tariff on food, he said: “These figures highlight the significant revenue implications of the new policy. Projecting based on recent trends; we estimate that the six-month tariff suspension could result in a revenue forfeiture of approximately N188.37 billion.”
On the implication of the directive, he said as an agency responsible for trade facilitation and revenue collection at a country’s borders, NCS finds itself at the intersection of these policies and their practical implementation.
He explained that “the removal of tariffs and import duties on key staples – rice, wheat, maize, and sorghum – for the next six months represents a considerable sacrifice in terms of potential revenue.
According to him, from 2020 to 2023, the total import of these food items (beans, maize, rice, and wheat) was a staggering N3,819,516,677,584.00.
During the period, he said these commodities generated N191,715,743,625.55 in customs duty and N561,775,629,251.70 in levies paid to the government.
Adewale also noted that Wheat alone accounted for N3,784,288,508,393.00 in import value, generating N189,214,425,419.65 in duty and N561,678,613,107.90 in levy. While maize imports were valued at N34,301,422,247.00, contributing N2,335,515,156.60 in duty.
He said Rice, despite import restrictions, saw N195,463,395.00 in import value, yielding N19,546,339.50 in duty and N97,016,143.80 in levy.
He said beans imports were valued at N731,283,549.00, contributing N146,256,709.80 in duty.
The Customs boss said one of the most immediate and substantial implications is the revenue forfeiture that the government has committed to in order to make food more accessible and affordable for its citizens.
He explained that “the removal of tariffs and import duties on key staples – rice, wheat, maize, and sorghum – for the next six months represents a considerable sacrifice in terms of potential revenue.
Adeniyi noted the forfeiture is no small sum, and it represents the government’s commitment to prioritizing food security over short-term revenue goals.
He further explained how the forfeiture transcends mere numbers for the NCS.
He noted that the organization swiftly adapted its systems and procedures to implement the tariff suspensions efficiently. Whilst there will be increased volume management Increased Volume Management.
Adeniyi explained that 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 said.
He said in order to tackle low agricultural productivity levels, the Federal Government has ordered farming equipment worth billions of Narnia from the United States, Brazil, and Belarus.
His words: “Agricultural Mechanization. To address the challenge of low agricultural productivity, the government has placed orders for mechanized farming equipment such as tractors and planters from the United States, Belarus, and Brazil. This equipment, worth billions of Naira, is expected to significantly boost our agricultural productivity, allowing us to make better use of our vast arable land,” he noted.
He further said two notable actions that have already been taken, to ensure food security including the distribution of Fertilizers.
He said in a move to support the farmers and boost crop yields, the government has already distributed fertilizers to support agricultural activities across the nation.
Adeniyi said this action directly addresses one of the key inputs needed for increased food production.
Aside from specifically focusing on food, the government has implemented broader economic reforms that will undoubtedly impact its food security positively, according to the CG.
He stressed: “These include clearing foreign exchange obligations, which will facilitate easier importation of necessary food items and agricultural inputs.
“We’ve also seen increased government revenues and a reduction in our debt service ratio, freeing up more resources that can be channeled into agricultural development and food security initiatives.”
Projecting into the future, he said President Bola Ahmed Tinubu has also announced four laudable initiatives aimed at ensuring food security.
He listed them to include the Compressed Natural Gas (CNG) Initiative, which while not directly related to food, the government’s CNG initiative aims to reduce transportation costs by approximately 60%.
Adeniyi said this could indirectly but significantly benefit food security by potentially lowering food transportation costs and making food more affordable across the country.
He also said from the State-Federal Partnership, the Federal Government will provide necessary incentives for agricultural initiatives, while States are expected to provide land for cultivation.
The CG said this partnership approach leverages the strengths of both levels of government and aligns with the federal structure.
He said the NCS is not only committed to enforcing these policies, but to do so in a manner that facilitates trade, supports economic growth, and ultimately contributes to the food security and well-being of every Nigerian as it has always been doing.
