Customs: Investors Blame Customs For Rice Smuggling

By Bayo Bernard

Elephant Group Plc, a major local rice producer in the Nigeria is worried that its huge investment in local rice production is heading for jeopardy due to the illegitimate activities of rice smugglers. Thousands bags of rice were smuggled into the country last year according to records made available to the magazine by the Nigeria Customs Service, NCS.

At least seven million metric tons of rice is consumed in Nigeria yearly, more than 60 percent of that number will be smuggled into the country this year.

The International Fund for Agricultural Development, IFAD, an organ of the United Nations said in a recent report that Nigeria has the capacity to produce enough rice to feed Nigerians.

IFAD President, Dr. Kanayo Nwanze, said 10 million metric tons of rice can be produced annually if the required infrastructure was put in place.

But smuggled rice from Malaysia, Thailand, Vietnam are still common in major markets in the country, particularly in Lagos. The federal government has banned importation of rice through land borders, even though the commodity can still be imported through the seaports.

Reports from Nigeria Customs Service (NCS) say the service impounded 497,279 bags of imported rice between 2015 and August, 2017 with a Duty Paid Value (DPV) of N3.8 billion. But market sources informed the magazine that the figure formed a small percentage of those that escaped the prying eyes of the Customs. They formed the bulk of rice now being sold across major markets in the country, the magazine learned.

But some investors such as Elephant and others have set aside the huge risk factor of smuggling in their firm belief in federal government’s quest to end importation of rice by the end of 2018.

In this quest, the company has recently acquired a multi-billion naira Rice Mill in Rivers state.  The Elele Alimini rice processing mill, acquired from the Niger-Delta Development Commission, NDDC has the capacity to process 210 metric tons of paddies of rice per day.

The Group has also acquired over 30,000 rice paddy for processing.

The Executive Director, Operations, Elephant Group Plc, Akin Ogunbiyi recently said Nigeria has all it takes to become the largest rice producers in Africa, aside earning huge forex by localizing rice production.

According to him rice is an “important food security crop, it is an essential cash crop for it is mainly small-scale producers who commonly sell 80 per cent of total production and consume only 20 per cent. Rice generates more income for Nigerian farmers than any other cash crop in the country.”

Another agro-business investor Olams Nigeria Limited its total investment in the integrated farm and milling facility has reached over N18 billion ($111 million). These include its multi-million dollar integrated rice mill in Nasarawa State, North-central Nigeria, fitted with the capacity to produce 36,000 metric tons of milled rice per annum.

Meanwhile, fear of investors losing their investment has become rife in the face of belligerent smugglers who have become more resolute to the chagrin of Nigerians. The development has further increased the risk of producing rice locally, experts told the magazine.

Sources in the company told the magazine that the security agencies, particularly Customs are to blame for their misfortune. The situation would be different if the customs can do more to protect Nigerian borders from smugglers, according to them.

The federal government had in the beginning of the year approved funds for the purchase of over 50 patrol vehicles for the Col, Hameed Ali (rtd)-led NCS, to beef up security across the nation’s borders. So far, the measure has proved incapable to stop rice smugglers.

According to the source the company is already considering the sack of some of its employees due to the hostile operating environment which has led to redundancy among its numerous employees.

“The company is not making sales. The whole marketing department has nothing to do because nobody is buying our rice, the rice you see in the market is foreign ones, mostly smuggled into the country,” he said.

Some marketers working with these companies told the magazine that their employers have warned them that their jobs are on the line if they failed to meet their sales target this year.

“Let me tell you, I have two trailers loaded with rice but nobody is willing to buy to buy. If things continue this way, I don’t think the company will be able to keep the number of marketers presently in its employ,” one marketer told the magazine last week.

Some senior officials of the company said the biggest problem the local rice investors are facing is the failure of the Nigerian Customs Service, NCS to stop smuggling of the commodity into the country.  It was alleged that the NCS, still allow unfettered smuggling of rice into the country for a price. The sources who claimed that the bulk of smuggled rice into the country come through Nigerian border with Benin Republic, said the Seme and Ogun commands of NCS should be blamed for the infraction.

“No fewer than 20 trailer loads of rice are allowed into the country from the Idi Iroko border every morning around 3 to 4am, in the full glare of customs officers. Go to Seme around the same period, the same thing is happening while the officers sit and do nothing.

When we complained to the controllers, they will assure us that they will take care of it. As you can see the situation has not changed,” a source from Olams told the magazine.

He said smuggling of rice has become the cash cow of some senior customs officers. He alleged that “officers at the Seme and Ogun commands are neck deep in the racket. Go to the two commands in the evening you will find officers sharing money given to them by smugglers,” he said.

Another source from Elephant Group said the federal Operations Unit, Zone A of the NCS posed a threat to rice smugglers for a while following seizure of truck-loads of rice by the command in the last few months. This has failed to deter the smugglers, adding that FOU has diverted operations to other areas.

“The FOU seems to have concentrated efforts on the seizure of automobiles in recent times. I can tell you also that they are not doing the job as before, if that is not so, where did the foreign rice you see at Daleko, Oyingbo, Sango markers come from. We had hoped that the FOU has been re-equipped by the current CG to perform its role as the policemen of the Service, that they can move in to check negligence on the part of border area commands, but as it seems, we are disappointed.“

He said the unpatriotic behaviors of customs officers in the cartel is working against the local rice production policy of the President Muhammadu Buhari-led administration, and may end up destroying it except the current situation is reversed.

Efforts by the magazine to make the two commands respond to the allegation was unsuccessful as telephone calls made to the commands’ public relations officers, PRO were not answered. But the Controller, FOU Zone A, Ikeja, Comptroller Muhammed Uba Garba, recently told the magazine that he’s working alongside officers of the command to force smugglers to abandon the unpatriotic business.