While about half of Nigeria’s rice consumption comes from imported rice and cross border imports are illegal, rice has not come into any of the country’s ocean ports since January 2012, claim the Seaports Terminal Operators Association of Nigeria, STOAN, according to local sources. No surprise, STOAN blames the high import tariffs for incentivizing illegal rice imports via cross-border trade.
Clearly, the high tariffs are not working to reduce imports or raise money to encourage domestic production. In fact, Nigeria is losing import revenue from rice, fish and automotives to its neighboring countries due to high import duties levied by the Federal government, said the STOAN Chairman. Nigeria levies an import duty of 110% on well-milled rice and brown husked rice. While the import duty on same varieties in Benin Republic is only 7%, and 0% in Cameroon.
The STOAN Chairman noted that Benin Republic is taking advantage of this huge differential and imported about 2.2 million tons of rice in 2013 and of that that at least 1.6 million tons were brought into Nigeria illegally through land borders. This scenario is amounting to heavy revenue losses to the government as well as the port operators, she added. The Federal Government increased the import duties on rice in 2012 as part of its Agricultural Transformation Agenda (ATA) in a bid to control rice imports and encourage the local rice industry to increase rice production to meet the consumption needs of the Nigerian people.
The government is keen on banning rice imports in 2015 but many farmer groups say banning imports without substantial rise in the production would be counterproductive to the economy. A recent agreement between Nigeria and Pakistan to promote co-operation in textile, rice processing, pharmaceutical, agriculture and other sectors is a welcome development for Nigeria, according to local sources. According to the USDA, Nigeria’s rice imports in the MY 2013-14 are estimated to reach around 3 million tons, up about 3.4% from about 2.9 million tons in the MY 2012-13. The USDA estimates Nigeria’s rice production in 2013-14 to reach around 2.7 million tons, up about 12.5% from previous year’s production of about 2.4 million tons.
However, rice consumption in Nigeria is projected to increase to around 6 million tons in 2013-14, up about 11% from around 5.4 million tons in the previous year.