Food prices spike amid govt’s delay of VAT hike

Buhari now in Daura mocking us, says Abati
Despite refuting the reported plan to increase the Value Added Tax (VAT) from 7.5 to 10 per cent, prices of food items remain high, The Guardian checks reveal.

In the same vein, former Senior Adviser on Media and Publicity to former President Goodluck Jonathan, Dr Reuben Abati, said ex-President Muhammadu Buhari would be in his Daura village in Katsina State laughing over the economic situation of the country.

Prices of basic food items such as pasta, rice, beans and cooking oil are on the rise as transport fares tripled due to rising energy costs.

For example, the price of rice has moved from N76,000 in May to above N85,000 while a pack of spaghetti now costs N1,300 from N1,000. Five kilogrammes of cooking oil also moved to N15,000 from N12,000.

While the price of diesel remained stable around N1,300 per litre, petrol sells for over N1,000 in most states apart from Lagos and Abuja, where the pump prices hover around N850 to N920 per litre.

The zero tax on imported food proposed by the Federal Government has also been stalled, as the anticipated policy is yet to see the light of day.

But the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, is still brandishing the ‘achievements’ of the policy.

In announcing the retention of 7.5 per cent VAT, he said: “In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items. For emphasis, as of today, VAT remains 7.5 per cent and that is what will be charged on all the goods and services that are VAT-able.”

The minister was silent on the factors driving the renewed upward trajectory of prices. Rather, he stated that the focus of government was to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses flourish.

According to investment banker, Tolulope Alayande, one of the low-hanging fruits for the government is to lower VAT on basic food items.

He argued that while such a step would lead to a massive decrease in government’s revenue, it would also lessen social pressure on the government, especially on the heels of an increment in the pump price of petrol.

“Government will lose money if VAT is reduced, but that will also show the people that the government cares. That may likely see the prices of basic food items coming down slightly. At this rate, Nigerians will welcome any decrease in the prices of food,” he said.

Abati said it was a gross embarrassment in terms of economic management to people from the South West who, he said, claim to be better at managing the economy.

Making the assertion, yesterday, the veteran journalist, who anchors the popular Arise TV programme, ‘Morning Show’, stated that the immediate future of Nigerians “hangs in the balance,” stressing that the pain had gone beyond hunger.

He said: “Nigerians have been thrown into energy poverty. We find ourselves unfortunately in a situation whereby Buhari, now in his Daura village in Katsina, would be laughing. He would say, ‘okay, I think this Yoruba people say they know the economy; the economy is now in their hands. They have taken it down. They have mismanaged it’.

“So this is what we are facing. It is a gross embarrassment in terms of economic management to people who come from the South West, who say that, you know, ‘people from the South West are better at managing the economy’. We have not seen that evidence.”

Schools, Abati noted, have increased school fees, adding: “Husbands are beginning to go to the market to ensure that madams do not top up ‘chop’ money in the family because of what has been imposed. So, amid all this confusion, we are in a quandary. Our immediate future hangs in the balance. And the pain is much. It has gone beyond hunger.

“Some people have served notice that they will go on strike. They will go out to the street on October 1 driven by the pain of hunger and the reality of anger. The problem is preventable.”