The federal government has disclosed that it has taken immediate steps to address the issue of inflation in the economy through reduction of import duties on commodities affecting food and transportation.
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who made this known yesterday while answering reporters’ questions after the weekly Federal Executive Council (FEC) meeting, explained that the
Finance Bill 2021, which was sent to the National Assembly for passage by President Muhammadu Buhari, is designed to cut some import duties on some commodities, including vehicles.
Shedding light on government’s plan to fight inflation, the minister said the two main target of the plan are the food and transportation sectors, saying government intends to make transportation affordable, thereby reducing the harsh conditions that had made food in inflation factor.
She said: “Inflation is high at 16.7 per cent and we’ve seen inflation inching up gradually over the last couple of months. So the question that was raised on the issue of reduction of import duties, the simple response is it’s not effective. So when the bill is passed, first of all, we’ll have to wait for the bill to be conveyed to the President and then it’s conveyed to us and then we’ll convey it to the various agencies that have different roles to play and then they review the bill to roll out guidelines and directives for implementation. The Nigerian Customs Service has done that guidelines and have conveyed to all for implementation.
“But the point between that particular aspect and inflation is that the reason why we advocated and got approval for reduction of those import duty waivers is precisely because of inflation. When you look at the components that constitute inflation in our country, the largest contributor is food inflation and food inflation also, if you decouple it, the largest contributor to food inflation is the cost of transport.
According to her, ‘we will now look at how do we reduce the cost of transport because we can’t give every Nigerian money in their pockets to pay for transport. We figured that one of the good ways to do it is to reduce the acquisition of mass transit vehicles to reduce the acquisition cost of vehicles and tractors that are used for productive purposes like agriculture.
“So the reason why we reduce those duties is to reduce the cost of transportation. So once this implementation takes full effect, we’re hoping that we’ll be able to see more tractors coming into the country, more mass transit buses coming to the country, reducing the cost of transportation as a result, and also having an impact on food prices”, she explained.
On the issue of rice smuggling, which has been on the increase since some of the borders were reopened last year, the minister said plans are afoot to monitor and control the situation, noting that rice smuggling is capable of obliterating the progress made in rice production during the period of border closure.