The African Development Bank has criticised the Nigerian government’s easing of import taxes for staple agricultural goods such as wheat and maize, warning the move will only increase the country’s food security issues in the long term.
Nigerian consumers are battling the country’s highest inflation rates for nearly three decades, with food prices in May soaring by over 40% year-on-year.
In a bid to address food security fears, President Bola Tinubu’s government last week issued a 150-day suspension of duties, taxes and tariffs for imports of staple goods such as wheat, maize and brown rice.
In a July 10 statement on X (formerly known as Twitter), Nigeria’s agricultural minister Abubakar Kyari said the government would also import 250,000 metric tons of wheat and 250,000 metric tons of maize for local processing. The commodities will be supplied to small-scale processors and millers in Nigeria.
However, the pause on tariffs has been slammed by the president of the African Development Bank (AfDB), Akinwumi Adesina, who warns the measures could “destroy” the country’s agriculture sector.
In a speech in Abuja, on July 12, Adesina said the move would undermine previous investments in Nigerian agriculture and risked turning the country into an “import-dependent nation”.
“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.”
Boosting local production would help further stabilise the naira currency, which has recovered its value against the US dollar in recent months, after hitting a record low in March, he said.
“I feel today like Prophet Jeremiah, who said, ‘I am bent over in pain. Oh, the torture in my heart! My heart is pounding inside of me. I cannot keep quiet because I have heard the trumpet,’” Adesina said. “The food importation policy in Nigeria gives a distressing trumpet sound.”
Inflation is being felt acutely in Nigeria, propelled by a raft of economic reforms under the Tinubu administration.
Since taking power 14 months ago, Nigeria’s president opted to end a popular but expensive fuel subsidy regime that cost US$10bn annually, and also devalued the naira twice.
While the AfDB has criticised the loosening of import tariffs, analysts say Nigeria’s agricultural sector has long struggled to boost output and Nigerian consumers are struggling.
“They need to get food, and they need to get it from outside,” says Menzi Ndhlovu, an analyst at intelligence firm Signal Risk. “There is talk of addressing systemic issues, but this process will take a while.”
Protectionist measures were introduced under the former Buhari administration amid concerns over cheap imports from neighbouring states such as Cameroon and Benin, he says.
But these initiatives have done little to boost investment and agricultural output in Nigeria’s food-growing Middle Belt region.
Ndhlovu tells GTR that Nigeria’s agricultural productivity has “stagnated” amid multiple “systemic” factors.
“[There is] the impact of climate change… On top of that, you have insecurity in the region, there’s been pervasive banditry, which has disrupted productivity in key growing states, and north of that [region] you have an Islamist insurgency,” he says.
Nigeria already relies heavily on imports for staples such as maize and wheat. For instance, in 2021, the country imported wheat worth over US$2.5bn while local production was valued at just US$37mn.
Main sourcing countries for staples such as wheat and maize include India, Benin, Cameroon and Brazil.
Any “bump” in imports from these countries – or potential new trade partners, such as South Africa – will likely be gradual, Ndhlovu says.
“Nigeria is under a foreign currency crunch and they are struggling to import a lot of things, including fuel. But there should be a slight easing in pressure on food availability over the next six months,” he says.
“Nigeria is also a country that prides itself on maintain balance of payments. They have to watch their external accounts, so they cannot go gung-ho on imports.”
