12 December 2012

Nigeria: Rice Smuggling Persists Despite Millers' Outcry

Despite the persistent outcry of rice millers, smugglers of the product have continued in their illicit business, undercutting both genuine millers and depriving the federal government of huge revenue.

Investigations by LEADERSHIP showed that because Nigeria's land borders still remain porous, smugglers have capitalised on this, flooding the country with smuggled rice a few weeks to the Christmas festivities when the price of the commodity is expected to rise.

This development is causing concern among rice millers in the country who have made huge investments in the business.

The millers, under the aegis of Rice Millers, Importers and Distributors Association of Nigeria (RiMIDAN), put the total loss of revenue to the government from smuggling for the period commencing January 2012 till date at N32 billion naira.

This figure is expected to rise this Christmas period if nothing is done to check the smugglers.

The association's Chairman, Tunji Owoeye (FCA), stated this when he spoke with our correspondent, saying the millions of naira worth of investments by his members may go down the drains, and jeopardise the food security plans of the federal government.

Providing a background to the sector's operations, he said although the national yearly consumption of rice is about 5.5million metric tones(mt), local production accounts for about 1.8 million tones, leaving a substantial percentage of the nation's rice need to be met through importation.

But while the association's members are making diligent efforts to ensure rice availability at affordable price, the smugglers are threatening it.

According to him, "The truth is that the problem of smuggling is getting worse by the day. Because the borders are porous, and because the smugglers have not been decisively tackled, the trade has continued to thrive. It is threatening the food security plans of the federal government while also jeopardising the businesses of our members."

Owoeye said more jobs would be created, more revenue would accrue to the federal government, and the total food value chain would be impacted positively if the issue of rice smuggling was effectively tackled.

He recalled that the federal government on July, 2012, introduced 20 per cent and 25 per cent increased levies on imported polished rice and husked brown rice respectively, with the aim of encouraging home-grown rice and discouraging importation, saying this is a welcome development.

The same is true of the complete ban on the importation of rice through land borders to ensure that the expected gains from the increase in levy and the subsequent investment in the development of Nigerian grown rice are not eroded by the activities of land border Smugglers."

"The quantum of rice being smuggled through land from the Republic of Benin is increasing on a daily basis. An estimated 30,000 metric tonnes of rice is being smuggled on a monthly basis into Nigeria . When we raised these issues with the authorities, we alerted them that over 140,000 metric tons of parboiled rice was scheduled to arrive at the ports of the neighboring country!"

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