The Central Bank of Nigeria (CBN) recently announced the release of $547.7 million (equivalent to N823.19 billion at the official exchange rate of N1,503.3/$1 as of June 30, 2024) to support the importation of food items during the second quarter of 2024. This figure represents a reduction of $142.48 million, or 20.6%, compared to the $689.88 million allocated in the first three months of the year. When converted to naira, this also reflects a decline of N80.76 billion, or 8.93%, from the N903.95 billion recorded in the first quarter.
In total, the CBN has released approximately N1.73 trillion for food item importation over the past six months, according to data from the bank’s quarterly statistics bulletin. An analysis of the spending reveals that Nigerians utilized $164.43 million in January, followed by $303.91 million in February, and $221.54 million in March. The allocation for subsequent months included $153.27 million in April, $197.21 million in May, and $197.22 million in June.
Despite these efforts, the Federal Government’s initiative to lower food commodity prices through a zero-duty policy on selected basic food items has encountered significant obstacles. The increasing average price of imported food items has underscored these challenges, with the price index rising to 878.3 in September 2024, reflecting broader economic pressures affecting the market.
Read Also: FG Proposes 5% Tax on Telecom Services and Others
On July 8, 2024, the government announced a 150-day duty-free import window for specific food commodities, including maize, husked brown rice, wheat, and cowpeas. This program was designed to alleviate the impacts of various factors contributing to food scarcity and rising prices in Nigeria. The intention was clear: to remove or significantly reduce import duties and value-added tax to facilitate an influx of food imports and subsequently lower consumer prices.
However, three months after the announcement of this scheme, it has yet to be implemented. The primary reasons for the delay include bureaucratic hurdles within the government and the Federal Ministry of Finance’s failure to publish a list of qualified importers who could participate in the program. This has hindered the effectiveness of the initiative.
The challenges faced by the Federal Government in executing this plan highlight the complexities of addressing food inflation in Nigeria. With rising costs and bureaucratic inefficiencies, the goal of stabilizing food prices remains elusive. The ongoing economic pressures further complicate the situation, as consumers continue to grapple with increasing prices for essential commodities.
In summary, while the CBN has made significant financial allocations to support food imports, the government’s efforts to implement effective measures to reduce food prices have been stymied by various challenges. As the situation evolves, the need for effective policy execution and coordination becomes ever more critical to ensure food security and affordability for Nigerians.
