Business
Hunger: Inflation worsens over failure of zero-import duty food policy

Nigerians, who expected a significant drop in the prices of food items before the end of the year have had their hopes dashed as market realities show that the situation has even gotten worse.
This follows the inability of the Federal Government to achieve the reduction of the price of food commodities through the implementation of a zero percent import duty and exemption from value-added tax on selected basic food items as promised.
The challenge is underscored by the alarming increase in the average price of imported food items, which rose to 878.3 price point index in September 2024, reflecting broader economic pressures.
Sources informed BH that certain forces in the government deliberately sabotaged the policy to protect some interests. They fingered the Nigeria Customs Service, and Northern farmers, who had benefited so heavily from the past government of Buhari on the Anchore Borrowers scheme on rice and other commodities.
According to them, the zero-duty policy on rice import was a direct threat to the already made gains by the beneficiary-farmers, who opposed the policy. So there was a strong lobby within government not to release the implemention guidelines, which would have enabled the Nigeria Customs Service, (NCS) to go ahead with the policy. However, the Customs were not a disinterest party.
“The Customs were playing the ostrich by insisting that there was no guideline for them to take action. But we know they were also complicit in the opposition to the policy. They know it will affect their set revenue target for the year, which would not be good for their image, since government is placing so much emphasis on revenue generation.
“We learnt that after they showed government how much it would deny it in revenue, government developed a cold feet, and pretended they were still interested in implementing the policy,” the source said.
So, there was a coalition of forces and interests against the policy, which ensure that it never took off.
“Just imagine the type of government and people ruling us, who prioritize revenue over the life and survival of Nigerians, who now struggle to feed because of high cost of food. Look at the tragedy that took place in Ibadan last week, where about 40 children perished in a stampede for going to seek a food handout. It is wicked for government to reduce its people to such level of living,” he added.
Inflation in Nigeria rose to 34.60 per cent in November 2024, reflecting a 0.72 per cent increase from October’s rate of 33.88 per cent. According to the latest Consumer Product Index (CPI) report released by the National Bureau of Statistics (NBS) on Monday, December 16, this marks a significant year-on-year rise, with the November 2024 rate being 6.40 percentage points higher than the 28.20 per cent recorded in November 2023.
The NBS said that the food index rose to 39.93 per cent in November in contrast with 39.16 per cent recorded in October. It said that food inflation year-on-year basis was highest in Sokoto at 51.30 per cent and lowest in Kwara at 31.39 per cent.
Analysts had projected that the monetary policy committee (MPC) may begin to soften its stance given the unexpected token rate hike last month. But with Nigeria’s November inflation climbing to 34.6 per cent, the tightening cycle may not be ending anytime soon.
The rise in November marks the third consecutive increase after a brief decline in July and August with rise in food and transport costs being the major driver.
On July 8, 2024, the Federal Government announced a 150-day duty-free import window for food commodities to ensure a reduction in food inflation in Nigeria. The food commodities include maize, husked brown rice, wheat, and cowpeas.
According the government, the programme was meant to help cushion the effects of various factors contributing to food scarcity and price hikes in the country. The idea was to remove or significantly reduce import duties and value-added tax to encourage an inflow of food imports and drive down consumer prices.
However, the scheme failed to take off over five months after the government announced the plans. Bureaucracy and the failure of the Federal Ministry of Finance to publish a list of importers qualified to participate in the process as required by the guidelines issued by the Customs in August were cited as reasons for the delay in the commencement of the scheme.
The latest CPI report by the NBS read in part, “In November 2024, the Headline inflation rate was 34.60 per cent relative to the October 2024 headline inflation rate of 33.88 per cent. Looking at the movement, the November 2024 Headline inflation rate showed an increase of 0.72 percentage points compared to the October 2024 Headline inflation rate.
“On a year-on-year basis, the Headline inflation rate was 6.40 percentage points higher than the rate recorded in November 2023 (28.20 per cent). This shows that the Headline inflation rate (year-on-year basis) increased in November 2024 compared to the same month in the preceding year (i.e., November 2023).”
The rise in inflation is largely driven by food price increases, which continue to place a strain on Nigerian households. While the government is yet to begin implementation of the policy, the price of imported food has continued to soar.
According to the NBS monthly inflation report, the 878.3 price point index on imported food items in September was a rise of 30.6 price index or 3.61 per cent from 847.7 in August 2024.
Further analysis showed that the average price of imported food price has surged by 72.3 percentage points or 8.97 per cent from the 806.0 average price index in July 2024 when the policy was announced and 878.3 in September.
On a year-to-date, this increase was a surge of 185.7 price index points or 26.81 growth from 692.6 in January 2024, indicating more reliance on foreign food products amidst food supply shortages in the country.
A month-by-month analysis showed that in January, Nigeria recorded an imported inflation rate of 26.29 per cent. This increased to 29.81 per cent in February, marking a notable jump of 3.52 per cent in the inflation rate from January.
The trend continued in March, with the imported food inflation rate climbing to 32.89 per cent, an increase of 3.08 per cent from February. In April, the inflation rate further increased to 34.01 per cent, growing by 1.12 per cent from March, showing a slight deceleration in the rate of increase.
May recorded an imported food inflation rate of 34.83 per cent, indicating a continued upward trend. The increase in the inflation rate is 0.82 per cent from April. The figure was 806.0 in June, 826.2 in July, 847.7 in August and 878.3 in September.
Skyrocketing prices
According to the selected food prices report from the National Bureau of Statistics, the delay in implementing the duty-free food policy has seen the average price of imported high-quality rice surge by 144.77 percent year-on-year.
Since the announcement of the policy, the price of one kilogramme of imported rice has risen by 3.21 per cent, climbing from N2,329.05 in July to N2,403.86 in September. It was N982.07 per 1kg in September of last year, which means that the average price has more than doubled in one year.
The average price of 50kg bag of imported rice has moved from N49,103 in September 2023 to N120,193 this year, with Kogi recording the highest price for 1kg of imported rice at N3,180.99, while Katsina posted the lowest at N1,892.33 in September 2024.
Business Hallmark also observed that maize prices have also maintained an upward trajectory. White maize grain, which was priced at N1,028.33 in July, rose by 3.58 per cent to N1,065.14 in September, representing an 87.88 per cent increase from N566.93 in the same period last year.
While Kwara recorded the highest price at N1,440.31, Adamawa posted the lowest at N675. Yellow maize grain increased by 2.69 per cent from N1,037.45 in July to N1,065.33 in September, with an 88.93 per cent rise over the past year. Also, Kwara and Adamawa registered the highest and lowest prices of N1,388.84 and N775 respectively.
The price of wheat flour, especially Golden Penny’s 2kg pack was not spared by the inflationary wind. Its price increased by 2.45 per cent from N3,485.34 in July to N3,570.75 in September. The price rose year-on-year by 135.56 per cent, from N1,515.88 in September 2023. While Niger State recorded the highest price at N5,357.93, Plateau had the lowest at N2,445.96.
Divergent views on 2025
The Chairman of the Agro-allied Group, Lagos Chamber of Commerce and Industry, Kola Aderibigbe, raised alarm over the worsening food inflation and the declining agricultural output, predicting that food inflation might worsen next year.
Aderibigbe blamed persistent insecurity, poor implementation of policies, and environmental issues, which had significantly disrupted farming for the soaring inflation in the country.
“We are in a vicious cycle. Despite government policies, we are losing agriculture,” the LCCI Agro-allied chairman said.
He noted that farmers, particularly in the South West, were staying away from their farms due to the fear of attacks by herdsmen, saying, “Farmers are not going back to the farms because the herdsmen, who we learn are foreign, are still grazing on the farms.”
According to Aderibigbe, insecurity is only one aspect of the problem. Erratic rainfall and flooding, exacerbated by climate change, are also crippling food production.
Similarly, the President of the Small-scale Women Farmers Organisation in Nigeria, Fatimah Gummi, expressed disappointment with the government’s poor implementation of agricultural policies.
Gummi argued that while many policies exist, their impact remained minimal due to poor execution and lack of reach to the real farmers.
“The reason the policies, despite being in place, are not yielding results is because they are not fully implemented,” she asserted.
She noted that only a fraction of the farmers, particularly smallholder women farmers, received the promised government inputs, such as fertiliser and seeds, and when they did, they often arrived too late.
However, the N49.7 trillion 2025 budget proposal presented to a joint session of the National Assembly on Wednesday by President Bola Tinubu, forecasts that inflation will decline from current 34.6% to 15% next year. The President also said the exchange rate will improve from approximately N1,700 per dollar to N1,500.
Tinubu said the budget projections are based upon observations, such as reduction of petroleum products importation, increased export of finished petroleum products, bumper harvest driven by enhanced security, reducing reliance on food imports, among others.
In what looked like lending credence to the budget projections, some agriculture experts, in separate interviews with the News Agency of Nigeria (NAN) on Friday, expressed optimism of a drop in food inflation in 2025 with the effective implementation of the Federal Government food security policies.
One of them, an agriculture expert and co-founder Corporate Farmers International, Mr. Akin Alabi, highlighted factors responsible for the continuous food inflation rate, while expressing optimism of lower inflation rates in 2025 with adequate implementation of government’s policies.
“It is unfortunate that the price of foodstuff is still going to go up even till the first quarter of 2025. A major factor that drove the food inflation in 2024 is the high cost of fuel.
“We also had other factors, such as insecurity and climate change effects driving the food inflation witnessed in the country this year. All the factors mentioned above jerked up the price of food items and the cost of food production in 2024.
“However, the good news is that as regards the 2025 budget, so much attention will be given to achieving food security in the country.
“If the present administration keeps to its word of achieving food security, I have no doubt in mind that will go beyond this expectation.
“In 2025, we should begin to see the effect of the policies that have been made by the Federal Government, majorly from the Ministry of agriculture,” Alabi said.
He also noted that the interventions should start from “mechanisation, seed inputs and the like and plans around dry and wet season farming, that to ensure all-year-round crop cultivation.
“The Presidency has announced that food is non-negotiable and I want to believe Nigerians are going to hold him accountable for those words,” he added.