Abiodun Olorudero, Managing Partner at Prasino Farms, has raised concerns about the effectiveness of the federal government’s recent policy of zero import duty and VAT exemption on basic food items. The policy, implemented by the Nigeria Customs Service (NCS), suspends duties, tariffs, and taxes on imports of food maize, brown rice, wheat, and cowpeas for 150 days, with the aim of reducing the high cost of food in the Nigerian market.
Olorudero, however, is skeptical, pointing to “stringent crazy conditions” that could hinder the policy’s impact. He explained that the requirement to import only paddy rice, which must then be processed in the northern region before distribution to the south, creates additional transportation costs. This, he argued, diminishes the policy’s potential to lower food prices.
Olorudero also noted that with the current foreign exchange volatility, importers would still be buying at high rates, around ₦1600/$. He added that some farmers may prefer to export processed rice for higher returns due to the weaker naira.
While acknowledging a recent drop in inflation, particularly in the prices of vegetables due to harvest season, Olorudero warned that this decline might be short-lived. He emphasized that despite the slight relief, prices for essential commodities such as bread and rice remain elevated.
He further highlighted several challenges that could sustain inflationary pressures in the coming months, including unfavorable weather conditions, particularly the rainfall deficit in northern Nigeria, high energy costs, foreign exchange volatility, and increased labor expenses following the recent minimum wage hike.
