The Informer (Monrovia)

9 January 2013

Liberia: Implications of Rice, Cement Tariff Reduction

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The President, Her Excellency Pres. Ellen Johnson Sirleaf on Friday January 4th, 2013 issued Executive Orders Nos. 45 and 46 with immediate effect suspending tariffs on rice and cement. The intention is to ensure a simultaneous reduction in the market price of rice and cement. But can this assumption hold?

A press release from the Executive Mansion indicated that Executive Order No. 45 titled "Extension of Executive Order No. 19 on the Suspension of Tariff on Rice stating that the Government of Liberia in its desire to continue bringing relief to the public is extending Executive Order No. 19, suspending the import tariff on rice as classified under tariff Nos. 1006.30.00 (in packing of at least 5kg); and 1006.30.00 in packing of at least 5kg; and 1006.40.00 (broken rice) under Revenue Code of Liberia Act 2000 with immediate effect.

Explaining the Executive Order further, the press release stated that government conducted an assessment and evaluation of the causes of the increase in the price of strategic commodities and recognized the need to curb the continuous increase in the price of rice, the country's staple food with a view to make it affordable to the Liberian public. Previous Executive Orders Nos. 11 and 19 also suspended import tariff on rice to correct the situation.

Under Executive Order No. 46 titled 'Re-instituting the Suspension of the Protective tariff on cement' by wavering US$2 protective tariff, the government said it is in the interest of national reconstruction and development. It also aims at encouraging the establishment of local industries to supply goods to the general public as government granted certain incentives to CEMENCO for the production of cement.

The issue of rice, the country's staple food is very sensitive to the country's socio-economic and political process. One of the secrets of the long years of relative calm under the regime of Liberia's 18th President William V.S. Tubman was that government put into place strategies that ensured a continuous supply of rice on the Liberian market. For several years a bag of a large U.S parboiled rice known as "Pusawa Rice" was sold at less than US$20 per bag.

It was during President William R. Tolbert's leadership that government made an attempt to increase the market price of a bag of rice in Liberia. This was due to the increased deficit in the Liberian economy resulting from the large government spending to host the Organization of African Unity (OAU) now the African Union summit, convened in Monrovia, The Tolbert government tried to balance the budget by announcing an increase in the price of a bag of pusawa rice.

This rice price increase was what opposition politicians took advantage of to organize street protests in Monrovia denouncing the rice price increase. Today governments in Africa are very sensitive to effecting price increases in the staple foods of countries.

It is our ardent view that government should ensure achieve its goal of effecting the drop in tariff, by ensuring that its benefits impact a reduction of the high cost of living on the ordinary Liberian through a decrease in the market price of a bag of rice and a bag of cement. This can be done by the Ministry of Commerce inspectors ensuring conformity to the reduction of tariff on the commodities mentioned.

We also view that in case there is a reduction in the market price of rice government's security agencies and other stakeholders would reactivate measures to curb the smuggling of cement and rice from Liberia for sale in neighboring countries. Some people are also wondering if such a reduction would in any way give stamina to local farmers to grow more food in line with government's policy to enhance the country's capacity for rice self sufficiency and food security.

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