By Simeon Shodimu
As Nigeria grapples with rising living costs and persistent food inflation, the Federal Government’s latest tariff adjustments on key agro commodities have sparked a fresh debate—offering hope to consumers while raising red flags for local producers caught in a tightening economic squeeze.
Feature: Tariff Cuts Stir Mixed Reactions as Relief Meets Risk in Nigeria’s Food Economy
At a time when soaring energy prices continue to ripple through transportation, production, and food costs, the Federal Government’s 2026 Fiscal Policy Measures (FPM) have arrived as a potentially calming intervention for millions of Nigerians struggling with the high cost of living.
The policy, which introduces reduced import tariffs on key agricultural commodities, is designed to ease supply constraints and stabilise prices in the short term. Under the new regime, import duties on bulk rice have been lowered from 70 per cent to 47.5 per cent, while broken rice now attracts 30 per cent. Crude palm oil imports are pegged at 28.75 per cent, and raw sugar tariffs range between 55 and 57.5 per cent. Refined salt for human consumption has also been adjusted to 55 per cent.
The adjustments, outlined in a circular issued shortly before the exit of former Minister of Finance, Wale Edun, supersede the 2023 fiscal framework and cover 127 tariff lines aimed at stimulating growth across critical sectors. To ease the transition, the government also approved a 90-day grace period for importers with pre-existing Form ‘M’ approvals.
For consumers, the move has been largely welcomed. Earlier interventions had already triggered a decline in the prices of staples such as rice, maize, cassava products, and vegetable oils—offering some relief to households burdened by inflation.
However, beneath this relief lies a growing unease among farmers and agribusiness investors, who warn that the policy could deepen existing vulnerabilities within the agricultural sector.
Reports from major rice-producing states suggest that about 3,500 farmers are considering exiting cultivation after incurring losses estimated at over N93 billion. Cassava farmers face similar pressures, as falling market prices collide with persistently high production costs.
Industry stakeholders argue that the influx of cheaper imports could intensify competition, squeezing already thin profit margins and discouraging local production.
The Chief Executive Officer of the Produce Export Development Alliance (PEDA), Adetiloye Aiyeola, captures this duality succinctly, describing the policy as “both necessary and very risky.”
According to him, while reducing import duties may quickly boost supply and ease prices—particularly in urban centres—it simultaneously exposes local farmers to stiff competition from cheaper foreign goods.
“When farmers are not making money, they begin to consider exiting the sector entirely,” he warned, noting that prolonged reliance on such measures could erode Nigeria’s domestic production capacity and increase dependence on imports.
Aiyeola stressed that tariff reductions must be complemented by targeted support for farmers, including improved access to finance, logistics subsidies, and policies that enhance competitiveness.
Without such measures, he cautioned, the country risks solving today’s price crisis only to create a deeper supply challenge in the future.
In contrast, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, offered a more measured perspective, arguing that the current policy differs significantly from previous import waivers.
He noted that unlike the zero-duty waivers granted between late 2024 and 2025—which led to a sharp crash in staple prices—the new regime merely reduces tariffs in line with the ECOWAS Common External Tariff framework.
Despite the reductions, Yusuf pointed out that import duties remain substantial. “For every $1,000 worth of imports, you are still paying roughly $400 in duties, excluding other charges,” he explained, suggesting that imported goods may not become significantly cheaper than current market prices.
However, he emphasised that the success of the policy hinges on strict enforcement, particularly in curbing smuggling, which he described as a critical threat to both government revenue and the competitiveness of local producers.
As Nigeria navigates the delicate balance between affordability and self-sufficiency, the new tariff regime underscores a broader policy dilemma: how to provide immediate relief to consumers without undermining the long-term viability of domestic agriculture.
For now, the policy offers a temporary cushion for households—but its lasting impact will depend on whether it is matched with sustained investment in local production and a firm commitment to structural reforms.
