The recently released Ministry of Finance Fiscal Policy Measures reduced the Duty Rate on imported tomato concentrate from 10% to 5% .
There has been an interesting development as Dangote Industries Executive Devakumar Edwin, confirmed in an interview with Reuters that the Dangote tomato-based processing plant has been shut down due to unavailability of foreign exchange. Its important to consider this news with an earlier announcement of the closure of the Erisco tomato factory due to lack of foreign exchange as well. These closures calls into question the overall strategy of import restrictions and substitution of the Federal Government.
Where import tariffs are reduced, imports will become cheaper, hurting local demand and production. Where foreign exchange supply to local manufacturers is hampered, it also affects local production negatively, imports will gain market share.
Is the policy of the Federal Government to encourage or restrict imports?
