Inflation Reduction Measures
President Bola Tinubu reportedly plans to suspend import duties on essential items such as staple foods and drugs for six months to curb inflation. This move is part of a broader fiscal policy initiative outlined in the “Inflation Reduction and Price Stability (Fiscal Policy Measures) Order 2024.”
Executive Order Details
The President will soon sign the executive order, which includes waivers on levies for fertilisers, poultry feed, flour, and grains. The Ministry of Finance and the Central Bank of Nigeria will devise a plan to offer low-interest loans to key sectors, including agriculture, pharmaceuticals, and manufacturing.
Suspension of Specific Taxes
For the remainder of the year, the executive order also aims to suspend various taxes and levies, such as the Value-Added Tax on Automotive Gas Oil and other transportation-related charges. This initiative targets easing the financial burden on households and businesses, particularly in the face of rising food inflation.
Contradictory Statements
Despite the proposed suspension of import duties, this plan contradicts President Tinubu’s earlier statements against food imports. During an event with state chairpersons of the All Progressive Congress, he emphasized self-sufficiency and economic diversification as solutions to Nigeria’s food crisis.
Food Inflation Crisis
Nigeria faces a severe food crisis, with inflation driving up the prices of staples like rice by 169% over the past year. Approximately 31 million Nigerians will experience severe food shortages by August. The proposed executive order aims to mitigate these challenges by reducing the cost of essential imports.
Fiscal Responsibility and Borrowing
The Federal Government may need to borrow an additional N7.24 trillion in 2024 to fund this economic intervention plan. This borrowing is in addition to the N9.18 trillion already planned to cover the budget deficit, pushing the total debt for 2024 to N16.42 trillion.
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