In a bid to address the escalating food inflation in Nigeria, the federal government is considering a series of measures, including the importation of paddy rice for local millers and the provision of maize and rice seeds to farmers. These initiatives are part of the draft Accelerated Stabilisation and Advancement Plan (ASAP), recently presented to President Bola Tinubu by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
Key Measures in the ASAP Document
The ASAP document outlines several executive orders aimed at tackling the nation’s economic challenges. These include measures focused on reducing inflation, generating employment, promoting non-oil exports, ensuring prudent financial management, and consolidating tax information. Specific recommendations for inflation reduction include:
– Suspension of import duties and VAT on specified items.
– Authorization for millers to import paddy rice.
– Implementation of an import duty exchange rate peg.
To support individual and commercial farmers, the document suggests immediate approval for the importation of 10,000 metric tons of rice and maize seeds, which could potentially enhance productivity across 600,000 hectares of farmland. Additionally, it aims to onboard 2 million farmers across four key value chains to boost productivity and sustainability.
President Tinubu’s Previous Stance on Food Imports
The proposed importation plans mark a significant shift from President Tinubu’s earlier stance on food imports. Earlier this year, he emphasized the need to reduce dependency on food imports, expressing his intention to transform current challenges into future opportunities. The President, supported by the Minister of Information, had previously directed the Nigerian Customs Service (NCS) to enforce the Export Prohibition Act, halting the export of key food items such as rice, maize, beans, and millet to ensure a steady domestic supply.
The Current Food Security Crisis
Nigeria is grappling with a severe food security crisis, with food inflation reaching 40.5% and approximately 31 million people projected to face severe food insecurity during the lean season in August. The prices of staple foods, particularly grains, have surged by over 100% in the past year. The price of rice, for instance, has soared by 169% over the last year, reaching nearly N90,000 per bag earlier this year before dropping by about 20%, according to a report by Nairametrics.
Impact on Rice Millers and Market Supply
Rice millers in Nigeria have been struggling with an inadequate supply of locally produced rice for processing. The proposed approval to import paddy rice is expected to alleviate these challenges, potentially increasing the supply of rice in the market and contributing to a decrease in prices. Governor Babajide Sanwo-Olu of Lagos State previously highlighted the issue, noting that the Imota rice mill has not been operating at significant capacity due to insufficient rice paddy supply. He had advocated for federal approval to import rice to ensure the mill’s productivity.
The federal government’s proposed measures, if approved, could play a crucial role in stabilizing food prices and ensuring food security in Nigeria. However, these plans represent a significant policy shift and will require careful implementation to balance immediate needs with long-term sustainability goals. As the nation navigates this critical period, the effectiveness of these measures will be closely monitored.
Credit: Nairametrics
