In line with its fiscal measures for 2012, the Federal Government Wednesday announced an a 65 per cent levy on wheat flour imports even as it established a Cassava Bread Development Fund as part of overall measures to firm up its the policy on cassava bread.
The levy will also be paid with the 35 per cent duty on the commodity in tandem with the 2012 budgetary provision.
Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, who also announced a cut on tariffs on cassava enhancing enzymes from 10 per cent to zero per cent effective from Sunday, July 15, 2012 during a parley with flour millers and master bakers in Abuja Wednesday, reaffirmed government's commitment to the success of the cassava flour bread policy in view of its far-reaching benefits to the economy.
According to her, in order to strengthen the technological and manpower capacities for the development of the entire cassava value chain, a new Cassava Flour Development Fund will also be created immediately.
The funding, she said, would be sourced from the newly imposed 65 levy on wheat imports and would be managed at first instance by the Ministers of Finance, Agriculture, Trade and Investment and Science Technology and the Director General of the Budget Office.
She stated that a substantial part of the Fund would be committed to training of the over 400,000 master bakers scattered across the country, encourage the decentralisation of the baking industry and also support them in understanding the operations of the new modular technologies that would be acquired to boost cassava flour processing as the implementation of the cassava bread is sustained.
The Minister said: "The wheat flour Which used to attract a duty rate of 35 per cent with no levy will with effective 1st of July and in order to encourage the substitution of cassava flour for wheat flour attract not just the duty rate of 35 per cent also attract a 65 per cent levy and that has now kicked into effect. So, that is where we were. This is to encourage the flour milling industry to kick in and begin to aid the substitution of cassava flour for wheat flour.
"But in addition to that incentive to the cassava value chain and to the cassava processing industry, we want to announce a couple more additional incentives that will help the industry. The first is with regard to cassava enhancing enzymes which the Minister of Agriculture just referred to.
"At present, they attract a duty rate of 10 per cent. We will reduce that to zero per cent effective from now. So, as from 15th July, we are reducing the duty on cassava enhancing enzymes from 10 per cent to zero per cent to encourage the bakers and the millers in the industry. The second thing that we would do is that we are going to use part of the 65 per cent levy on wheat flour to create a Cassava Bread Development Fund and this Fund would be used to support the cassava value chain," Okonjo Iweala added.
The Minister of Agriculture and Rural development, Dr. Akinwumi Adesin, appealed to flour millers against any act that would undermine the efforts of the government to use the cassava flour bread to transform the economy.
He said the success of the policy would not only save the country of up to N635 billion yearly on wheat import cost but also help in creating jobs and improving the well-being of Nigerian farmers amongst other benefits for the economy.