The federal government’s zero-tariff grain importation policy may take longer to go into effect because, the Nigeria Customs Service has not yet received a complete list of the companies that will be chosen to take part in the intervention program, Vanguard reports.
It is reported that the Federal Government is still working to fine-tune policy guidelines to address gaps in the earlier document.
For example, the paper that was made public last week included information on who was eligible to import rice and what kind of rice will be imported.
According to the guidelines, only husked rice or paddy rice (rice grain, as harvested from the farm before milling) will be allowed into the country.
The guidelines also said that certain requirements must be met in order for individuals to be permitted to import rice that has been husked. It stipulates that the only businesses permitted to import paddy rice are those with the ability to mill 100 tons per day and who have been in operation for at least five years.
They must also have been involved in backward integration with farms that can produce the volume of import they want to undertake.
The policy states, “To participate in the zero-duty importation of basic food items, a company must be incorporated in Nigeria and have been operational for at least five years. It must have filed annual returns and financial statements and paid taxes and statutory payroll obligations for the past five years. Companies importing husked brown rice, grain sorghum, or millet need to own a milling plant with a capacity of at least 100 tons per day, operated for at least four years, and have enough farmland for cultivation. Those importing maize, wheat, or beans must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation.
“The basic food items eligible for the zero percent duty rates are: Husked Brown Rice; Grain Sorghum; Millet; Maize; Wheat; and Beans.
“The Federal Ministry of Finance will periodically provide the NCS with a list of importers and their approved quotas to facilitate importation of these basic food items within the framework of this policy.
“The policy requires that at least 75% of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded. Companies must keep comprehensive records of all related activities, which government can request for compliance verification.
“If a company fails to meet its obligations under the import authorisation, it will lose all waivers and must pay the applicable VAT, levies, and import duties. This penalty also applies if the company exports the imported items in their original or processed form outside Nigeria.”
Many anticipated that the duty-free grain import would be so easy to order that anyone with the means to import them would be able to do so, causing the prices of the impacted commodities to quickly plummet.
Comptroller-General of Customs, Mr. Adewale Adeniyi, has stated that his organization is keen to put the policy into effect, calling it “a bold move to address the immediate challenge of high food prices.”
pledged Customs’ readiness to give effect to the implementation, having undertaken critical operational adjustments in order to effectively and efficiently see to the seamless importation of the commodities.
The NCS boss revealed that special corridors will be created to facilitate clearance of the food items, adding, “Our teams are supporting the development of the guidelines and will swiftly integrate these guidelines into our systems and processes to ensure seamless implementation as soon as they are released. This proactive stance will minimize any potential delay or confusion in the clearance process for the affected food items.
“In line with this, we are creating a special corridor to expedite the clearance of the listed food items – rice, wheat, maize, and sorghum. This dedicated channel will streamline the importation process, reducing clearance times and potential bottlenecks. The activities around this corridor will be managed by specially-trained officers to ensure both efficiency and compliance with all necessary regulations.
The policy is now dividing stakeholders in the maritime sector, who have urged for a longer than six-month extension.
There is disagreement about whether the policy’s introduction circular is clear, with some arguing that the policy may not accomplish its intended goals.
Commenting on the development, the President of the National Council of Managing Directors of Licensed Customs Agents, NCMDLCA, Mr. Lucky Amiwero
stated that the memo on the policy approved by the President should be explained for Nigerians to get a clear understanding of the intention of government.
Amiwero disclosed he had written to government on the matter adding that if what he advised government to do is different from what they are doing, then the policy does not suit the letter he wrote.
He claimed that the government’s requirements for importers to bring these food goods into the nation are excessively onerous and that they might even undermine the goal of the policy.
He said “What government is trying to do is avert the very calamity that may engulf the country because everybody is affected.
“The situation in the country is so tough that people are losing their jobs, people are closing shop and people don’t have what to eat.
“When you give people conditions, you may end up destroying an already complex situation. The government should sit down and articulate what they are trying to do and work towards achieving it.”
Also, Managing Director and founder, Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf said that conditions are inline to regulate the implementation of the policy.
According to Yusuf, the requirements will make sure that the policy is not abused and will accomplish two goals.
He said “The conditions were meant to achieve two majors. The first is to ensure that there is no abuse because if you leave it completely open, all manner of people will come into the space and the whole thing may be abused.
“So in order to allow for proper streamlining of the whole process, those guidelines were necessary to restrict it to companies that can easily be monitored so as to be able to achieve the right outcomes.
“The second major point is the fact that government also desires to give some protection and preference to those that have already invested in the sector, not just somebody who has never invested in rice mills or rice farms and wants to start importing parboiled rice. This group of people do not have much stake in the sector as it were.
‘No, , I don’t think so. We have lost time already. You can see that the circular is effective from the 15th of July or so, and one month is already gone. I know what the import cycle is, and before you place an order or do other things, another two months is gone.
“I think that at the end of the day, there may be a need to extend it to get the right kind of impact. Another important thing is that I have heard some people say that it will affect local farmers. Anybody who has read the guidelines knows that the interest of those who have invested in rice mills and rice farms have been taken care of.”
“Secondly, government could also offer a minimum guarantee price for any local producer, so that nobody will complain that because the government has imported, that is why he is not selling.
““It is an effort to support them and complement their efforts. It is temporary, so government is careful not to undermine those who have already invested in the process. That is why they have made the process inclusive. This is so that they can benefit from it and whatever investment they get, they can plow back in the rice mill or in the rice farm. That is my understanding of why those conditions were put there,” he added.
