Food Duty Suspension Threatens Private Investments – Stakeholders

Experts have expressed concerns that the decision of the Federal Government to throw open the nation’s borders to allow food importation will affect private investments in the agriculture sector.

The minister of agriculture and food security, Abubakar Kyari, revealed at a press conference in Abuja last Monday a 150-day duty-free import window for commodities such as maize, husked brown rice, wheat, and cowpeas, as part of the implementation of the newly launched Presidential Accelerated Stabilisation and Advancement Plan.

Commodities imported during the 150-day duty-free import window would be subjected to price control, the minister added.

Kyari, who admitted that Nigeria was facing “a critical food security challenge,” added that President Bola Tinubu was committed to the attainment of food security and “ensuring that no Nigerian goes to bed hungry. To this end, I can assure all Nigerians, that my team and I will swiftly and diligently actualise these crucial policies to ensure food security for everyone in the country in the immediate term, as we also continue our strategies for long-term interventions to address the underlying causes and ensure sustainable and resilient food systems in the country.”

The President of the African Development Bank Group, Akinwunmi Adesina, noted that despite the good intent of the policy, the move was a “depressing” one.

According to a statement on the bank website on Saturday, Adesina said this to African Primates of the Anglican Church at a retreat in Abuja.

He said, “Nigeria’s recently announced policy to open its borders for massive food imports, just to tackle short-term food price hikes, is depressing.”

Adesina, who was a former agriculture minister in Nigeria, warned that the policy could undermine all the hard work and private investments that have gone into Nigeria’s agriculture sector.

“Nigeria cannot rely on the importation of food to stabilise prices. Nigeria should be producing more food to stabilise food prices while creating jobs and reducing foreign exchange spending, which will further help stabilise the naira.

“Nigeria cannot import its way out of food insecurity. Nigeria must not be turned into a food import-dependent nation,” he declared.

Speaking on the theme ‘Food security and financial sustainability in Africa: The role of the Church’, Adesina said Nigeria “must feed itself with pride,” warning, “A nation that depends on others to feed itself, is independent only in name.”

Adesina added that Africa had 65 per cent of the uncultivated arable land left in the world, to feed 9.5 billion people by 2050.

“Therefore, what Africa does with agriculture will determine the future of food in the world. Essentially, food is money. The size of the food and agriculture market in Africa will reach $1tn by 2030,” he said.

Afrinvest in its weekly economic update lauded the move by the FG, noting, “Providing much-needed relief for households but estimated that the underlying protectionist approach to improving food self-sufficiency might not be optimal given that the agronomic and infrastructural groundwork to boost domestic supply is lacking.

“Hence, adopting this stance without addressing gaps in the domestic agriculture value-chain might deliver a weak outcome, as the past years have demonstrated. We opine the 150-day window could be extended for more impactful results.”

Also, Afrinvest analysts maintained that insecurity across the agrarian belt remained a significant catalyst to the prevailing food crisis.

“Over the years, states such as Benue, Nasarawa, and other regions in Northeastern and Northwestern Nigeria, traditionally key agricultural areas, have become increasingly unsafe due to the activities of bandits and terrorists. Farmers in these regions face extortion, with bandits demanding taxes before farming and at harvest time.

“For instance, SB Morgen Intelligence estimated that farmers in Northern Nigeria paid N139.5m in the last four years to bandits as a levy. As a result of this, farmers are forced to incorporate these additional costs into the prices of their produce, thereby leading to increased food prices in the market and aiding food availability and affordability concerns.”

According to the firm, desertification due to climate change is severely impacting food and livestock survival in Northern Nigeria, affecting 11 states in the region.

“This environmental challenge is evident in the agricultural sector, where farmers have lost farmlands to encroaching dunes and face inadequate water supply due to shrinking water sources. These conditions have a profound negative impact on farming, further exacerbating the difficulties faced by the agricultural community in maintaining productivity and food security.

“While we agree that the Federal Government’s attempt to improve self-sufficiency is well intended, and, if successful, will save the country a significant amount of FX ($2.1bn was spent on food importation in 2023), we believe that it is crucial to adopt a more systematic approach that prioritises laying a solid groundwork first. This includes addressing key challenges such as inadequate infrastructure, insecurity, and support for local farmers to ensure sustainable agricultural development and long-term food security.”

Meanwhile, the All Farmers Association of Nigeria also said that the recent directive by the Federal Government on the suspension of taxes on imported foodstuffs was not a sustainable approach to tackle food insecurity in the country.

The National President of AFAN, Kabir Ibrahim, disclosed this in a telephone conversation with our correspondent.

The AFAN president said that the only way to guarantee a sustainable solution was to ensure that farmers were given subsidies on all imports so that they would boost productivity in the country.

“We will patiently wait for the (suspension of import duty) to happen, but it is not sustainable. The sustainable solution is to ensure that farmers are given subsidies on all imports so that they will fill up productivity in the country and have a sustainable food system. Importing anything will not give you sustainable food security,” Ibrahim said.

Nevertheless, Ibrahim lauded the government for the approach, saying that it was the global standard.

“If the importation was for five months of 500 metric tonnes, then that is acceptable because this is a strategic way of getting out of a difficult situation that is acceptable to the world,” the AFAN boss said.

PASAP, under which the duty-free import is coming, is the FG’s initiative to inject N2tn into the economy in the next six months, with priority given to health, agriculture, and energy/power sectors.