Rice importers groan over smugglers’ activities
HARD times may have been here for importers of Nigeria’s most consumed staple food, rice, as smuggling of the product from neighbouring countries has been stepped up.
The development has resulted to more prosperity for the illicit dealers, while genuine importers sulk, albeit helplessly.
The nation’s supply gap had been estimated in the region of three million tonnes by the United States Department of Agriculture (USDA) half of which had earlier in the year been projected by the Federal Government.
However, importers, paying 70 per cent tariff, have found the whole situation dire as smugglers enjoy a free ride into the market, aided by negligible charges in neighbouring Cameroun and Republic of Benin, fully capitalising on Nigeria’s porous borders.
Another pertinent problem hamstringing rice investors is the Central Bank of Nigeria’s 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. 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.
The National Rice Millers Association of Nigeria, NRMAN, said this week that the Nigerian Customs Service, NCS, erred in its decision to lift the ban on importation of rice through the land borders. The Chairman of the association, Mohammed Abubakar, said the NCS overreached its statutory mandate as an enforcement agency in taking such a policy decision. Besides, Mr. Abubakar said, if the customs succeeded in its decision, it would destroy Nigeria’s rice value chain attained by the previous administration.
Reports emerge that the 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 50kilogram bags from Cotonou. There is a substantial under-declaration and non-payment aspect 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 nighttime 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, 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.