Massive Smuggling Hits Rice Markets As Tariff Rises

With the kick-off of the new tariff regime on rice in the country this month, smuggling of the commodity into the country has assumed a frightening dimension, a Tide source gathered over the weekend.

The Agricultural Transformation Agenda of the Federal Government which led to the tariff in- crease was meant to help position locally produced rice to fairly compete In the market with imported ones and move the nation to self sufficiency in rice production.

According to The Tide’s investigation, thousands of bags of rice worth millions of Naira were being smuggled in to the country on a regular basis through waterways linking Nigeria with neigbouring Benin Republic and avoiding every legal duties and thwarting efforts to boost local production as well as sabotaging the business of genuine rice importers.

Nigeria’s local consumption of rice which stands at about 5.5 million tonnes annually and with locally processed rice standing at about 3.5 million tonnes per year, smugglers were taking advantage of the high tariff to make brisk profit through avoiding legitimate levies.

Vice President of Rice Importers and Distributors Association of Nigeria (RIDAN), Mr Boniface Nwodo while commenting on the development said the duty per tonne of rice imported into the country has increased from $227 dollars to $367 or about N58,000 currently adding that the increase was likely to trigger increased smuggling of rice.

According to him, smugglers have devised another means of bringing rice by canoes due to the ban on importation of rice through the nation’s land borders.

Recently, the Federal Government increased the duty on imported rice from 20 percent to 40 per cent but some stakeholders say a computation of this with other charges like ETLS of 0.5 per cent and FOB of one per cent brought the total duty and levies from 32.5 per cent to 50.5 per cent and that this has some impact on trade on rice.

Nwodo said the additional charges would likely encourage smuggling and advised government to monitor the unscrupulous import of rice through its water bodies to achieve its desired policy ideals.

RIDAN’s worries arose amidst reports that over 8,000 bags of rice were smuggled into the country daily and the calculation was that this runs into several millions of naira.

Recently, Minister of Agriculture Dr Akinwumi Adesina said the country would soon build the biggest rice farm in Africa in coordination with a United States bused company.

The project which is expected to gulp about $40 million will produces around 300,000 tonnes of rice and reduce rice imports by 15 per cent and result in import savings to around N54 billion about $342 million every year.

The Federal Government has said that the country has all it take to become an exporter of rice given its huge human and natural resources but arguments are that there was need to ensure availability of the product first given that it is a major staple for millions of Nigerians.

According to the president, the target was for Nigeria which is a top rice importer to produce 2.1 million tones of rice within the next four years as part of the nation’s aim to become rice-sufficient and shift its economy from being oil-centric to agriculture-centric.