Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
…broken rice now attracts a 30 percent duty.
The Federal Government began implementing significant reductions in import duties on key commodities, including rice, passenger vehicles, electric vehicles (EVs), mass transit buses, and manufacturing equipment, as part of efforts to cushion the impact of rising living costs on Nigerians.
The new tariff regime, which took effect in July 2026, forms part of the 2026 Fiscal Policy Measures approved by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The revised policy introduces lower import duties across 127 tariff lines covering food, transportation, manufacturing, and industrial production, making it one of the most comprehensive tariff reforms in recent years.
Rice, Sugar, Palm Oil Get Duty Reductions
Among the major changes, the import duty on bulk rice has been reduced from 70 percent to 47.5 percent, while broken rice now attracts a 30 percent duty.
Import duties on raw cane sugar have been lowered to between 55 and 57.5 percent, while crude palm oil now carries a 28.75 percent duty, down from 35 percent.
The government said the reductions are intended to lower food prices, reduce production costs for manufacturers, and improve access to essential commodities.
However, economic analysts caution that consumers may not experience immediate price reductions due to continued pressure from exchange rates, fuel costs, logistics expenses, and port charges.
Vehicles, EVs and Manufacturing Machinery Benefit
The transport and manufacturing sectors also received major incentives under the new policy.
Import duty on passenger vehicles has been cut from 70 percent to 40 percent, while mass transit buses and electric vehicles have been granted full import duty exemptions.
In addition, manufacturing machinery now attracts zero percent import duty, a move expected to reduce production costs, encourage investment, and stimulate local industrial growth.
Industry stakeholders believe the lower tariffs could enable transport operators to replace ageing fleets with newer and more efficient vehicles, potentially improving logistics and reducing maintenance costs over time.
Expected Impact on Food and Transport Costs
The government expects the tariff reductions to lower transportation costs, particularly for agricultural produce moved from farming communities to urban markets.
Since transportation accounts for a significant portion of food prices in Nigeria, officials believe the policy could eventually help moderate the cost of staple foods such as maize, rice, yams, cassava, millet, and sorghum.
Nevertheless, experts warn that any benefits are likely to emerge gradually, as fuel prices remain above ₦1,000 per litre and the naira continues to trade between ₦1,400 and ₦1,500 to the US dollar.
Experts Raise Concerns Over Policy Direction
Public affairs analyst Kehinde Aluko questioned the consistency of the government’s economic strategy, noting that previous administrations promoted local agriculture through high import tariffs.
He argued that reducing duties on imported food products, particularly rice, could weaken investor confidence and undermine local farmers who invested under protectionist policies.
Aluko also noted that while import duties have been reduced, the government plans to introduce higher excise duties on alcoholic and non-alcoholic beverages, tobacco products, and a green tax on higher-engine vehicles, potentially shifting the tax burden from imports to consumption.
He said the success of the policy would ultimately depend on whether savings from lower import costs outweigh higher taxes and other economic pressures faced by consumers.
Importers Warn of Lingering Challenges
Importers, freight forwarders, and automobile dealers welcomed the tariff reductions but stressed that lower duties alone may not significantly reduce prices.
They identified foreign exchange volatility, multiple port charges, terminal handling fees, shipping costs, and cargo clearance delays as major factors that continue to inflate the cost of imported goods.
The Manager of Client Services at Inspired Cars, Iwayeye Olatunji, said previous duty reductions had little impact on vehicle prices because other import-related costs remained high.
Similarly, the National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria, Frank Ogunojemite, urged the government to address broader supply chain inefficiencies to ensure Nigerians benefit from the policy.
Mixed Reactions from Automotive Industry
Stakeholders in Nigeria’s automotive sector expressed differing views on the new tariff regime.
Some industry experts welcomed the lower tariffs, saying they would improve vehicle availability and affordability.
Others warned that the reductions, particularly the zero percent duty on commercial vehicles, could discourage investment in local vehicle assembly plants and weaken Nigeria’s growing automotive manufacturing industry.
Industrial consultant Luqman Mamudu argued that local vehicle manufacturers require stronger government protection and incentives to compete with imported vehicles, many of which benefit from subsidies in their countries of origin.
He warned that without additional support, the latest tariff reductions could further weaken domestic vehicle assembly operations.
Balancing Consumer Relief and Local Production
The new fiscal measures reflect the government’s attempt to balance consumer relief, business competitiveness, and industrial development.
While the reduced import duties are expected to ease the cost of importing essential goods, stakeholders say the ultimate success of the policy will depend on improvements in foreign exchange stability, port efficiency, logistics, and inflation control.
For many Nigerians, the coming months will determine whether the tariff cuts translate into cheaper food, more affordable transportation, and lower vehicle prices, or whether broader economic challenges will continue to offset the expected gains.
