Onome Amuge

When the Nigerian government announced in July 2024 that it would suspend duties, tariffs, and taxes on a basket of food imports for 150 days, expectations were high. The temporary measure, touted as bold and pragmatic, was designed to ease pressure on consumers battered by record food inflation.

The waiver, which covered staples such as rice, maize, wheat, beans, and cowpeas, was supposed to flood markets with cheaper food and force down prices.Sadly, the promised relief has barely materialised. Food prices remain high, inflation has continued to bite, and Nigerians still groan under one of the heaviest cost-of-living crises in the country’s recent history.

Now, the United States has weighed in. In its 2025 Investment Climate Statement on Nigeria, the U.S. Department of State concluded that the lack of transparency in implementing the duty waiver dulled its impact and turned an ambitious idea into another underwhelming policy experiment.

But this is not the first time. Nigeria has a long history of announcing duty waivers in key sectors including agriculture, energy, pharmaceuticals, amongst others, only for the measures to collapse under the weight of bureaucracy, corruption, and policy inconsistency.

On paper, the July 2024 food duty waiver looked like a quick fix. By removing costs at the ports, importers would land goods more cheaply, distributors would pass savings down the value chain, and consumers would pay less for bread, rice, beans, and other staples.

But in practice, the initiative faltered almost from the start. Delays meant that the suspension did not take effect as scheduled on July 15. When it did, inconsistent communication across agencies and opaque procedures created confusion among importers.

According to the U.S. report, the opacity of the process effectively blunted the waiver. “The policy had limited to no effect on food prices or increased food imports, as the lack of transparency in implementation dulled its impact,” it said.

Market watchers say importers were unsure about how to claim the waivers or whether they applied uniformly at the ports. Customs officials, still dependent on manual clearance processes, often interpreted the rules differently. In some cases, importers alleged that officials demanded informal payments before granting duty relief.

Meanwhile, Nigeria’s trade policy is notoriously protectionist. For years, governments have justified high tariffs and import bans on the grounds of strengthening domestic agriculture and manufacturing. Yet the results have been mixed, with food insecurity worsening and inflation relatively high.

The duty waiver was initially considered an emergency response to soaring inflation, but it clashed with entrenched institutional behaviour. Customs, reliant on revenue collection, had little incentive to ease restrictions or give up tariffs without clear instructions and oversight.

The failed agricultural duty suspension is part of a persistent and worrisome pattern. Earlier in 2024, the government announced the removal of import duty and Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG) and LPG equipment. The goal was to make cooking gas more affordable and expand adoption across households. Yet prices for cylinders and refills kept rising, leaving consumers puzzled about why relief never trickled down.

Similarly, duty waivers on essential medicines and medical equipment were introduced to cut healthcare costs. But drug prices barely shifted, as supply chain bottlenecks, mark-ups, and implementation opacity neutralised the effect.

The U.S. report comes at a time when Nigeria’s economy is undergoing wrenching reforms under President Bola Tinubu. In 2024, the government removed the fuel subsidy and liberalised the foreign exchange market. These moves won praise from international lenders and contributed to some macroeconomic improvements on paper, as external reserves hit a three-year high, and the naira’s exchange rate hovered around N1,500/$1 after months of volatility. Nigeria also returned to the Eurobond market for the first time since 2022, signalling revived investor interest.

Yet, the pain for ordinary Nigerians has been far from alleviated. The World Bank estimated that the share of Nigerians living below the national poverty line rose to 56 per cent in 2024, up from 49 per cent a year earlier, indicating that an additional 20 million people were pushed into poverty in just twelve months.

Inflation, especially food inflation, has remained high, fuelled by rising costs of wheat, rice, cereals, and fertiliser. The duty waiver was meant to be a relief valve; instead, its failure has deepened scepticism about the government’s capacity to implement reforms effectively.

The U.S. report identified other structural constraints including; unreliable power supply, corruption, regulatory uncertainty, and insecurity. Nigeria dropped from Africa’s second to fourth largest economy by GDP in 2024, reflecting both reform disruptions and weak investor sentiment.

The power sector continues to sap productivity. Despite privatisation and reform efforts, businesses still generate much of their own electricity through expensive diesel generators. Transmission failures and tariff disputes erode investor confidence, while limited domestic gas supply hampers generation.

Corruption remains a major drag. Nigeria improved slightly on Transparency International’s Corruption Perceptions Index, moving to 140th out of 180 countries from 145th previously. But businesses still complain of extortion by customs and port officials, leading to weeks-long delays in clearing goods.

For foreign investors, these are not abstract issues. The U.S. report noted that cargoes often take more than 20 days to clear Nigerian ports, with customs still relying heavily on manual processes that allow for variation, discretion, and corruption.

Beyond economics, security risks also weigh heavily. Although attacks on oil infrastructure in the Niger Delta have eased, illegal bunkering and oil theft persist. In other regions, violent crime, kidnapping, and terrorism remain concerns.

The combination of insecurity, policy inconsistency, and corruption means that Nigeria continues to underperform in global competitiveness indices. While starting a business and registering property have become easier, the overall environment remains difficult, the report concluded.