FG Slashes Import Duties on 127 Items Including Cars, Rice, and Palm Oil in New Fiscal Policy

The federal government has approved sweeping tariff reductions under the 2026 Fiscal Policy Measures, cutting import duties across 127 tariff lines covering cars, rice, palm oil, sugar, drugs, steel, and industrial machinery. Finance Minister Wale Edun signed off on the circular dated April 1, which replaces the 2023 regime entirely.

What the cuts look like

The headline numbers are significant. Fully built passenger vehicles and four-wheel drives drop from 70 percent to 40 percent. Rice falls from 70 percent to 47.5 percent. Crude palm oil comes down to 28.75 percent from 35 percent. Raw cane sugar drops from 70 to 55 percent. Anti-malarial drugs are pegged at 20 percent.

On the industrial side, agricultural and manufacturing machinery now attract zero duty, down from 5 percent. Cargo ships above 500 tonnes: zero. Railway locomotive kits: zero. Breathing apparatus and gas masks: zero. Cold-rolled steel drops to 15 percent. Zinc-coated steel sheets fall from 45 to 35 percent.

These are not cosmetic adjustments. When you cut the tariff on rice by nearly a third and bring vehicles down from 70 to 40 percent, you are making a clear statement about where the government thinks consumer relief should come from.

The catch

Not everything is going down. Wheat and meslin flour stays at 70 percent. Margarine is at 40 percent. And a new green tax surcharge takes effect July 1, alongside fresh excise duties on beverages and tobacco. The government says import adjustment taxes on 192 tariff lines will gradually reduce to zero by 2036 under Nigeria’s ECOWAS and AfCFTA commitments, but that is a decade away.

There is also a 90-day grace period for importers who already opened Form M before April 1, letting them clear goods at old rates. After that window closes, everything shifts to the new regime.

Why it matters

The timing is deliberate. Inflation has fallen from over 33 percent in December 2024 to 15.06 percent in February 2026, but the World Bank warns the Iran conflict and rising oil prices could push it back up. Consumer demand is still weak. Energy costs are still high. These tariff cuts are the government’s bet that cheaper imports can take some pressure off prices while supporting industrial input costs.

Whether it works depends on whether importers actually pass the savings on to consumers, or simply widen their margins. The history of tariff reductions in Nigeria is littered with cases where lower duties at the port never translated to lower prices in the market. If the naira stays stable between 1,340 and 1,430 to the dollar, as it did in Q1, the cuts have a chance. If the currency slips, the math breaks down fast.

Sources: TheCable, Premium Times, Daily Post, Vanguard