Confusing

• With the latest import tariffs, what’s FG’s strategy for the real sector?

A Federal Ministry of Finance circular, which Wale Edun, the Minister of Finance and Coordinating Minister for the Economy just signed, has rolled out fiscal directions for 2026, running till 2028.  They took off on April 1 to replace the 2023 fiscal guidelines.

The revised tariffs, which cover 127

items, lop off duties on many imported products.  In auto, for instance, fully built buses, four-wheel drives and station wagons, now attract import tariff of 40%, down from 70% -- a 30% slash. The idea is clear: slash the price of buses and sundry mass transit vehicles to reduce general transportation costs; and kill cost-push inflation before it reaches the market. 

This focus on mass transit costs is reinforced by the zero duty on such as railway and tramway locomotives and cargo ships above 500 tones; aside from agricultural and manufacturing machinery.  Railway beams huge passenger-and-cargo.  Its economy of scale cost-reduction bodes well to battle inflation.

Even then, where does this massive cut leave the fledgling local auto industry, at the best of times, at the margin of a market ever dominated by imported brands? 

Besides, what’s the future of consumer credit -- a Tinubu legacy policy -- taking its first gingerly steps now? Is consumer credit not ultimately designed for Nigerians to buy new made-in-Nigeria vehicles, instead of used “Tokunbo” ones?  How does this current massive tariff slash sync into that strategy?

This puzzle is no less explained by the tariff cut on such basic items as envelopes and notebooks -- and that’s the basic notebook, not its laptop computer cousin!  Envelopes now attract 40% duty (down from 50%); notebooks: 30%.  Why is Nigeria not sufficient in these basic -- and quality -- office supplies that anyone would need to spend precious forex importing them?

On the pharmaceutical front, the clear message on reduced tariffs on drug imports is to make healthcare cheaper and more accessible.  That is laudable, when pushed aggressively with health insurance.  But from the players, it’s cautious praise laced with ambivalence.

“A drop in duties on drugs and pharmaceutical products is quite laudable ... this should signpost a drop in prices of these products and promote accessibility to drugs,” Ayuba-Tanko Ibrahim, president of the Pharmaceutical Society of Nigeria (PSN), told ‘Vanguard’. But the “Government must see a need for urgent intervention ... pertaining to local manufacture and drug practices.” Fair enough -- balancing imports with local capacity.

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But we are somewhat concerned about how the new tariffs cover food.  Bulk rice, for instance: 47.5% (from 70%); broken rice: a reduction to 30%.  There are others: raw sugar, crude palm oil, refined salt, etc.  But rice symbolises the Nigerian food chain more than any other.

If the All Progressives Congress’s (APC) era from 2015 has out-performed  the People’s Democratic Party (PDP) era (1999-2015) on reawakening the real sector, it’s because of the APC’s fealty to infrastructure and agriculture.  The Tinubu order has kept faith with the Buhari-era infrastructure strides. Not so with agriculture -- or at least, so these latest tariffs project, even after rolling out tractors for its dry-and-wet season farming policy.

Rice farmer groups have alreadyhowled the new tariffs will send them out of business. Still, we want to believe that the government did its homework well before coming up with the policy on rice because if truly we do not have enough local production, the price would still be high. What this policy calls for is constant monitoring of the rice situation so that appropriate measures can be taken once we have substantial local production to meet demand, so as not to discourage local rice farmers.

We do not have to blow accumulated forex on what we can grow, with our vast expanse of arable land. 

“Grow what you eat; eat what you grow” -- that’s the logical war cry for food security.