Budget 2012 reflects FG stance on cassava bread.

It is now clear that the decision by the federal government to make Nigerians adopt 40 percent cassava bread is one that government is very serious about, the Nigerian Budget 2012 presented Tuesday by President Goodluck Jonathan has confirmed.

According to the budget, government is introducing policies to encourage the substitution of high quality cassava flour for wheat flour in bread-baking, bakeries will have 18 months in which to make the transition, and will enjoy a corporate tax incentive March 31st 2012, importation of cassava flour will be prohibited so as to further support this programme.

It would be recalled only recently, President Goodluck Jonathan formally presented to Nigerians a loaf of bread made from 40 per cent cassava flour, with a promise that he would continue to consume the brand in office as president and that government would put policy in place to drive the project. “All equipment for processing of high quality cassava flour and composite flour blending will enjoy a duty free regime as incentive to bakers for composite flour utilization.

Consultations with the sector to ensure a smooth transition are on-going,” President Jonathan said. He argued it is common wisdom that the best way we can grow our economy and create jobs for our people is for us to patronize Nigerian-made goods. “This is why we are introducing enabling policies to drive this process. In this regard, we are introducing fiscal policy measures that will encourage the purchase and utilization of locally produced commodities.”

The president said from July, 2012, wheat flour would attract a levy of 65 percent to bring the effective duty to 100 percent, while wheat grain will attract a 15 percent levy which will bring the effective duty to 20 percent. President Jonathan said government “intends to process and add value to different crops such as rice, cassava, sorghum, oil palm, cocoa, cotton etc. “This approach is central to our transformation strategy.

Accordingly, this Administration has adopted enabling measures to support the development of private sector-driven marketing institutions, and push for policies that would promote our agriculture to create jobs. To unleash the potential of this sector, the Federal Ministry of Finance has put in place a mechanism to share risks with the banking sector by guaranteeing 70 percent of the principal of all loans made for supply of seeds and fertilizer by the private sector this season.

In addition, to get the inputs to farmers at an affordable cost, we are subsidizing the interest rate on these loans to bring it down from 15 percent to 7 percent per annum. The Minister of Agriculture and the Central Bank are collaborating to extend these services for credit availability for the medium term.”

He said government would introduce further fiscal policy measures to support the development of the agricultural sector. “In this respect, the duty on machinery and certain specified equipment for the sector will, effective January 31, 2012, attract zero duty. We will further look at supportive fiscal policies for the rice and wheat sectors to stimulate domestic production,” he said.