President Muhammadu Buhari’s determination to boost the nation’s revenue generation may be a mirage unless urgent steps are taken to reverse the Nigeria Customs Service recent policy lifting the ban on rice importation through the land borders.
The policy that has been widely condemned has led to influx of different 50kg bags of rice from the neighboring countries like Benin Republic in the South as well as Niger and Cameroon in the north.
Already, the National Rice Millers Association of Nigeria, NRMAN, has cried out to the President to come to the aid of its members by reversing the policy which will not only make the country loose revenue but also destroy Nigeria’s rice value chain attained by the previous administration.
Speaking this week, Chairman of the association, Mohammed Abubakar, posited that the Nigerian Customs Service, NCS, erred in its decision to lift the ban on importation of rice through the land borders.
It is observed that smuggling of rice from across the Nigerian borders has reached prohibitive levels, with hundreds of trailers plying back and forth from neighbouring countries carrying illegal shipments of the staple food.
Investigations show that huge influx has been noticed in the market from last Saturday, the worst affected being Lagos and South West. Rice arrives in big trailers with 1200-1500 numbers of 50KG bags from Cotonou.
Also, there are substantial under-declaration and non-payment aspects in these shipments, making it non-viable for legal importers and local producers to compete with these shipments.
Several long trailers are noticed during the night time directly plying from Cotonou bearing Benin number plates (RB) into the Daleko and Gcappa markets. Apart from these big trailers, smaller J5 Buses which carry 200 bags each are also used by these unscrupulous smugglers to ship products during the day time.
The affected states are Lagos, Ogun, Osun, Oyo, Kwarra, Ondo and Ekiti. Other States adversely impacted are Sokoto, Katsina, Kaduna, Kano, Abuja, Niger and Plateau – all coming in from Cotonou and Niger.
Furthermore, rice from Cameroon through Northern Nigeria is flooding Adamawa, Borno, Yobe, Taraba, Benue and Enugu. Affected states from the South-East and South-south are Cross River, Akwa-Ibom, Abia and Enugu.
The nation’s rice supply gap was estimated at around 3 million tonnes by United States Department of Agriculture (USDA) and half that number by the FG earlier this year.
However, legal importers paying full tariff of 70 per cent have not been able to compete with smugglers who enjoy a free ride into the market, aided by negligible tariffs in neighbouring Cameroon and Republic of Benin, taking advantage of porous borders.
Another pertinent problem hamstringing rice investors is the Central Bank of Nigeria ban of foreign exchange for rice imports, among other products, choking the importation supply chain.
The resultant shortage in the market is now being exploited by smugglers, who prospered significantly in 2013 when they were able to move in around 2.5 million tonnes through the borders, without paying a single Kobo as import duty.
It will be recalled that in 2013, the Federal Government increased the importation tariff to 110 per cent as against zero duty regime administered in Benin and Cameroon.
As Nigeria Customs Service (NCS) struggles to rope in the smugglers, the market is rapidly filling up with cheap quality rice also frustrating efforts of commercial agriculture by key investors in the rice value chain.
Large multinationals including Olam, Stallion Group and Dangote have announced large scale investments in the value chain that are crucial in Nigeria’s quest to meet a growing annual demand of 6.5 million tonnes per annum.
Stallion Group is expanding its capacities to produce 1.5 million tonnes in Nigeria, whilst Dangote has announced plans to farm 100,000 hectares for rice production.
However, effective curbing of rice smuggling is essential to get these projects to fruition and encourage millions of farmers to get back intensively to rice farming.
