The Nigerian government has announced a comprehensive plan to curb inflation by suspending tariffs and import duties on food, raw materials, pharmaceuticals, and agricultural inputs.
This initiative is part of the proposed Accelerated Stabilisation and Advancement Plan (ASAP), recently presented by Finance Minister Wale Edun.
Edun disclosed that the plan, designed to alleviate Nigeria’s economic difficulties, was presented to President Bola Ahmed Tinubu. This move comes in response to Nigeria’s rising headline and food inflation rates, which have surged to 33.69 percent and 40.53 percent, respectively.
As inflation continues to erode purchasing power and exacerbate hardship for Nigerians, Edun emphasized that these fiscal measures will help stabilize the economy. “The order upon implementation will bring about the suspension of import duty and tariff for staple food items, raw materials and other direct inputs used for manufacturing, inputs for agriculture production, including fertilizers, seedlings, chemicals, pharmaceutical products, poultry feeds, flour, and grains,” Edun explained.
The plan also includes a six-month suspension of import duties and Value Added Tax (VAT) on several essential items. “Value Added Tax, where applicable, is hereby suspended on the following items for the rest of the year 2024: Basic food items and semi-processed, staple food items such as noodles and raw material inputs for the manufacturing of food items, electricity and public transportation, agricultural inputs and produce, and pharmaceutical products,” the document partially reads.
In response to the proposal, Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, commended the plan, noting its potential to mitigate inflationary pressures. “The proposed Accelerated Stabilisation and Advancement Plan is a laudable proposition coming from the Finance Minister. It addresses many of the burning economic issues bothering real sector investors,” Yusuf said. He urged the government to implement the plan swiftly for the betterment of Nigeria’s economy.
Yusuf highlighted the plan’s robust and comprehensive fiscal policy measures, which address concerns about high interest rates, the cost of cargo clearance at ports, and high import duty regimes. “The relaxation of import duties on critical raw materials for manufacturers would calm the raging inflationary pressures in the economy, especially food inflation,” he added. “The fiscal measures reflect the responsiveness of the administration to the concerns of investors in the real economy. We urge for expeditious implementation of the plan, once approved by the president.”
This economic proposal, known as ASAP, coincides with ongoing negotiations over a new national minimum wage. Recently, the Organised Labour shut down the Nigerian economy to protest the government’s failure to implement a new minimum wage. Although the strike was suspended on Tuesday after the government committed to a minimum wage higher than ₦60,000, the Nigeria Labour Congress and the Trade Union Congress had initially proposed ₦494,000.
Negotiations have resumed, with Senator Orji Uzor Kalu proposing a minimum wage between ₦75,000 and ₦90,000 during Tuesday’s plenary. Meanwhile, Paul Alaje, Chief Economist and Partner at SPM, argued that the minimum wage should be at least ₦100,000. The government and Organised Labour are continuing discussions to finalize the new minimum wage.
