Jubilation as Tinubu Slashes Import Duties On Rice, Vehicles (Full List)

The policy is regarded as one of the most significant overhauls of Nigeria’s tariff regime in recent years, targeting 127 tariff lines with reduced rates across household consumption, transport, manufacturing and industrial activity.

The government’s move comes at a critical period for the economy, with many Nigerians still battling high food prices, transport costs and weak purchasing power. Although inflation had eased from its peak of about 33 per cent in late 2024, concerns have persisted over renewed price pressures.

S&P Global recently raised its 2026 inflation forecast for Nigeria to 16.9 per cent, citing pressure from global energy shocks, which have contributed to a sharp rise in petrol prices.

Rice, Sugar, Palm Oil Duties Reduced
A major part of the new fiscal measures focuses on food items widely consumed by Nigerian households.

Under the revised rates, duty on bulk rice has been reduced from 70 per cent to 47.5 per cent, while broken rice now attracts 30 per cent duty.

Raw cane sugar duties have been compressed to between 55 per cent and 57.5 per cent, while crude palm oil now attracts 28.75 per cent duty, down from 35 per cent.

The cuts are aimed at lowering the cost of staple foods and reducing input costs for commercial food producers.

For many households, rice remains one of the most important food items, and the reduction in duty is expected to ease pressure if the gains are passed on to consumers.

However, analysts warned that lower duties alone may not automatically translate to cheaper food, especially with persistent exchange rate pressure, high fuel prices, logistics costs and port charges.

Vehicles, EVs, Buses Get Relief
The transport sector is also a major focus of the new tariff regime.

Duty on passenger vehicles has been reduced from 70 per cent to 40 per cent, a move expected to reduce the landed cost of imported cars.

The government also fully exempted mass transit buses and electric vehicles from import duties as part of efforts to lower transport costs and encourage cleaner energy use.

Manufacturing machinery now attracts zero per cent duty, a measure aimed at revitalising the industrial sector, reducing production costs and encouraging investment in local manufacturing.

Stakeholders said the policy could support transport operators who depend on imported buses, trucks, minibuses and light commercial vehicles for interstate haulage and urban transport services.

Many operators currently rely on ageing fleets that are costly to maintain, fuel-inefficient and prone to frequent breakdowns. The high cost of vehicle replacement has been blamed for the large number of unserviceable vehicles on Nigerian roads.

With the reduction in import levies, industry players expect a gradual decline in the landed cost of vehicles, which could allow transport companies and independent operators to renew their fleets at lower cost.

Possible Impact On Food Prices
Naija News understands that the logistics sector may also benefit from the policy, especially where trucks are used to move agricultural produce across long distances.

Transport costs account for a significant portion of food prices in Nigerian markets, particularly for staple crops such as sorghum, millet, maize, yams, and cassava transported from rural production centres in the North to urban markets in the South.

Stakeholders believe any reduction in haulage costs could eventually influence the final retail prices of food items.

However, the impact is expected to be gradual rather than immediate.

Lower vehicle acquisition costs could also improve efficiency in the transport sector by enabling operators to invest in more fuel-efficient and reliable vehicles, reduce breakdowns and improve delivery turnaround time.

But these possible gains may be weakened by other structural pressures in the economy.

Fuel prices remain above ₦1,000 per litre despite crude oil falling below $73 in the international market, while the exchange rate continues to hover between ₦1,400 and ₦1,500 to the dollar.

These factors mean the reduction in import levies may slow the pace of transport cost increases, but may not immediately reduce fares or food prices.

According to the Guardian, a public commentator, Kehinde Aluko, said the policy raised questions about consistency in government economic management.

He noted that for years, the Federal Government encouraged local production, particularly in agriculture, by using high tariffs to protect Nigerian farmers from cheaper imports.

Aluko warned that the sudden lowering of tariffs on rice and other commodities could undermine investor confidence and hurt local farmers who had made investment decisions based on protectionist policies.

According to him, the government is not merely cutting revenue but shifting the tax burden from imports to consumption.

“The government’s strategy is not just about cutting revenue; it is about fundamentally shifting the tax burden from imports to consumption. To balance the books, new excise duties on non-alcoholic beverages, alcoholic drinks, and tobacco products are set to take effect from July 1, 2026, alongside a “green tax” surcharge on higher-engine vehicles.

“This means that the relief from lower import duties could be offset by higher prices for everyday consumables and luxury items. For the average Nigerian, the immediate future presents a tug-of-war: while it may become cheaper to buy a car or industrial machinery, the daily cost of a bottle of soda or a pack of cigarettes is almost certain to rise,” he stated.

Aluko, who is also a telecom expert, said the real test of the policy would be whether relief at the ports would outweigh new costs at the checkout counter.

“As the government shifts focus, the coming months will be a critical test for the economy and the resilience of the Nigerian people,” he stressed.

Importers fear bottlenecks
Importers, freight forwarders and car dealers said tariff reduction alone may not deliver the desired economic outcome.

They identified exchange rate volatility, multiple port charges, logistics costs, terminal handling fees and delays in cargo clearance as major determinants of the final cost of imported goods.

According to them, unless these bottlenecks are addressed alongside the tariff cuts, the benefits may not be fully felt by businesses or ordinary Nigerians.

They recalled that during the administration of former President Muhammadu Buhari, tariff adjustments were also introduced on selected products to support local production and address economic realities.

In 2021, the tariff on imported vehicles was reduced from 35 per cent to 10 per cent.

However, stakeholders said the measure produced mixed results. While some importers benefited from lower duties on some items, the gains were largely eroded by foreign exchange volatility, rising shipping costs, inflation and port-related charges.

As a result, the expected reduction in consumer prices was not fully realised.

The Manager of Client Services at Inspired Cars, Iwayeye Olatunji, said the reduction in import duty on vehicles and spare parts was a welcome development but may not lead to significant reductions in vehicle prices.

He said high exchange rates and other import-related charges could limit the impact of the new policy.

Olatunji noted that previous duty reductions under the Buhari administration had little impact on vehicle prices, with only about 10 per cent price difference recorded.

According to him, while the new reduction looks positive on paper, consumers may not enjoy major price relief because several other costs tied to vehicle importation remain unchanged.

“Honestly, in the past, it was mostly on paper. Fine, the duty was reduced, but did it really have a direct impact on the market? That is another issue. When the duty is reduced, but other supporting fees are still there, the overall price does not really change,” he said.

The National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria, Frank Ogunojemite, said the value of the policy would not be judged by the announcement but by its practical impact.

He said the key measures would be the effect on the cost of doing business, prices of imported goods and the overall cost of living.

“The difference today is that tariff reduction alone cannot deliver the desired economic outcome. Exchange rate volatility, multiple port charges, logistics costs, terminal handling charges, and delays in cargo clearance remain major determinants of the final cost of imported goods. Unless these bottlenecks are simultaneously addressed, the benefits of tariff reductions may not be fully felt by businesses or ordinary Nigerians,” he stated.

Ogunojemite urged the Federal Government to closely monitor market responses to ensure that the intended benefits reach consumers and are not absorbed by inefficiencies in the supply chain.

“Nigerians expect to see the benefits beyond policy documents. Reduced tariffs should ultimately lead to lower landing costs, increased import activities, improved business confidence and more affordable products for consumers,” he said.

Importer Sees Policy Disconnect
An importer and Chief Executive Officer of Globe Joy Investment Nigeria Limited, Clinton Ikechukwu Okoro, confirmed that the revised duty rates had commenced at the ports.

He, however, argued that the process exposed a disconnect between policymakers and operators in the automotive import sector.

Okoro recalled that the earlier reduction in vehicle duties under the Buhari administration failed to significantly lower vehicle prices or stimulate imports.

He said vehicle prices had continued to rise sharply, making car ownership increasingly difficult for many Nigerians.

According to him, imports of used vehicles have declined significantly in recent years despite previous duty reductions.

Okoro expressed cautious optimism that the latest policy could encourage vehicle imports if the reductions prove meaningful after a detailed review.

Stakeholders in the automotive sector expressed mixed reactions to the new tariff regime, especially on vehicle imports.

While some warned that the policy could undermine local vehicle manufacturing, others said it would improve affordability and increase vehicle availability in the market.

The Managing Partner of Transtech Industrial Consulting, Luqman Mamudu, said the tariff differential on passenger vehicles was insufficient to provide meaningful protection for local manufacturers.

According to him, even if the effective tariff protection is about 70 per cent, the 40 per cent differential on passenger cars is not enough to encourage serious investment in vehicle manufacturing.

Mamudu said Nigeria’s automotive industry still required deliberate government protection within the limits allowed under the Economic Community of West African States Common External Tariff.

“The industry needs deliberate protection, including full utilisation of the Import Adjustment Tax (IAT) window and applicable levies. These measures can then be phased out gradually as the industry matures,” he said.

He explained that many foreign vehicle manufacturers benefit from substantial government subsidies in their home countries, making it difficult for Nigerian assemblers to compete only through tariff protection.

He urged the Federal Government to complement tariff measures with in-country concessions and incentives that would encourage global automakers to establish production facilities in Nigeria.

“The automotive industry has a multiplier effect on the overall economic development. So, no support by government is too much,” Mamudu added.

Zero Tariff On Commercial Vehicles Criticised
Mamudu also criticised the Federal Government’s decision to impose zero per cent import tariff on commercial vehicles, describing it as excessive and potentially damaging to Nigeria’s growing commercial vehicle assembly industry.

He argued that the policy would neither significantly reduce vehicle prices nor support domestic production.

According to him, commercial vehicle assembly had been one of the success stories of the National Automotive Industry Development Plan, with local manufacturers making progress in increasing local content.

“Commercial vehicle plants are easier to establish and ramp up local content. Automotive body building is an area where Nigeria has built substantial local capacity over the years,” he said.

Mamudu recalled that before the 2020 Finance Act, local assemblers imported only engines and carb assemblies as complete components, while companies such as Transit Support and Dangote Industries had started investing in facilities to manufacture additional components locally.

He said the reduction of import tariffs on commercial vehicles from 35 per cent to 10 per cent in 2020, which matched the tariff on fully built imported vehicles, led to the collapse of many assembly plants.

“Nearly all commercial vehicle assembly plants were shut down. Many companies now rely on imports, while only a few continue importing semi-knocked down kits mainly for logistics advantages and to keep their equipment running,” he said.

He warned that with tariffs now reduced to zero, the remaining operators may be forced to abandon their assembly facilities altogether.

In contrast, the National President of the Association of Motor Dealers of Nigeria, Prince Ajibola Adedoyin, welcomed the tariff review, describing it as an improvement.

Adedoyin said the lower tariffs would improve vehicle availability in the Nigerian market and make vehicles more affordable for consumers.

“It is an improvement. It will make the items more available and the prices more affordable,” he said.

The differing views reflect the difficult balance before the Federal Government as it seeks to reduce prices for consumers, ease business costs and protect local production.

For ordinary Nigerians, the coming months will show whether the tariff cuts will translate into cheaper food, lower transport costs and more affordable vehicles, or whether exchange rate pressure, port charges and inflation will swallow the expected gains.