Nigeria’s Tariff on Wheat Importers Grossly Affecting Local Millers

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Chris Uba

The Lagos Chamber of Commerce and Industry (LCCI) has faulted the federal government’s policy on wheat, saying heavy import tariff on the commodity was adversely affecting millers in the country.

This, the chamber also argued may snowball into a tariff bout between Nigeria and the United States.

The LCCI said the heavy tariff imposition was being transferred to the final consumers of bread and related products in the form of high prices and detracts from the federal government pronouncements of working to ameliorate the excruciating poverty in the country.

Currently, Nigeria imports 4.4 million metric tonnes of wheat at an average market price of $211.45/tonne.
After several interventions in the sector by both the private sector and the federal government, wheat production has increased from less than 200,000MT to 900,000MT.

The government seeks to save N129.4 billion on wheat importation in 2019, by reducing it by 50 per cent.
Nigeria wheat production was at level of 66,576 tonnes in 2017, up from 60,000 tonnes previous year, this is a change of 10.96 per cent.

“Protectionist policy by the federal Government in the form of heavy tariff imposition of up to 50 per cent on wheat import continues to affect millers in the country,” the LCCI stated.

According to the chamber, “apart from high prices being transferred to the final consumers of bread and related products, the high tariff may likely trigger a trade clash between the United States and Nigeria in the near term.
” Consistent efforts of millers to source wheat locally is yet to yield the desired results. “

The issues affecting local wheat production in Nigeria include lack of capacity by local wheat producers (estimated at about 10 per cent), poor quality and higher prices of local wheat relative to imported wheat.

The LCCI said a, “feedback from the industry players show that millers are yet to settle with cassava to bread policy due to attendant issues such as higher cost of enzymes, issues of logistics and delays of moving cassava from farm to factories, cost of new machines and technology required to process cassava into flour and other challenges.

“Thus, there is need for government to introduce some policy measures that will incentivize millers in the country to use cassava for bread,” it added.

The LCCI recently faulted Nigeria’s auto policy, saying in its present form, the policy is most inappropriate for an economy that is heavily dependent on road transportation and called for its review.

In a statement, the Director General, LCCI, Muda Yusuf, had lauded the decision of the government to review the policy which was conceived by the Goodluck Jonathan administration in 2013.

He had said: “The cost of vehicles had risen beyond the reach of most citizens and corporate bodies. The impact has been largely negative with far reaching consequences.

“The automobile sector was hit by the double shock of over 100 percent currency depreciation over the last five years and an import levy of 50 per cent on new cars and 25 per cent on used vehicles and commercial vehicles. This is in addition to the import duty of 20 per cent on new cars and 10 per cent on used vehicles and commercial vehicles.”

“The auto policy was an import substitution industrialisation strategy to reduce importation of vehicles and incentivise domestic vehicle assembly.
“However, import substitution strategy thrives in the context of high domestic value addition.