Dilema of Rice Importers

By Stephen Ubanna

Rice  importers  across the country appear to be in dilema over  government  policy measure baring  rice importation  from the Central  Bank of Nigeria , CBN,allocation, from the foreign exchange, forex,  market. Rice , vegetable Oil and processed tomatoes/Tomato  paste and palm oil are among the 41 items classified by the apex bank as ineligible  for  forex, according to Isaac Okoroafor, an Assistant  Director, and the apex bank spokesman because they could easily be produced in Nigeria, rather than spend  the country’s  reserves to import them.

Heneiken Lokpobiri: Minister of Agriculture and Rural Development
Heneiken Lokpobiri: Minister of Agriculture and Rural Development

The  importers may have been forced to source their forex for their rice imports because of the fiscal policy measure which was said to have been initiated by the  National Economic Council, NEC, headed by Ngozi Okonjo-Iweala,  the then minister of Finance and Coordinating minister of the Economy at the instance of former  President Goodluck Jonathan.
President Muhammadu  Buhari may have found the economic policy workable that he did not hesitate in enforcing into law through a CBN Circular that was released   in June 2015, barely one month in office. Aliyu Muhammed, Managing Director, Nigeria  River Basin Development Authorities has justified baring the 41 items including rice and tomato/ paste to the huge scarce forex spent yearly by the government on food imports.

Prior to the implementation of the CBN circular by the Nigeria Customs Service at the ports and land border stations,  Aliyu confirmed that the government was accumulating annual import bill of $11 billion.

Many had expected the government to reverse the policy because of its  implication to the economy. This is because of the recent revision of the documentation  requirements for forex allocation for small scale importation  and transactions value of $20,000 and below per quarter by the bank, making possible for such importation to qualify for  forex allocation but on the condition that the importer must complete form Q.

Okoroafor ,  the apex bank spokesman may have dampened  the enthusiasms of the rice importers to get a reprieve  on Thursday, May 4, 2018, when  he said   that  the 41 classified  items  by the apex bank  are still not valid for  forex allocation. It was bad news for the rice importers who had been going through difficult times sourcing for forex through the black market  to remain in the business and keep Nigeria port busy.

More frustrating to them was  the additional 70 percent levy on the cost of rice importation by the government. Still having a toll on their business was the high cost of clearing the bulk cargo from Nigeria ports.  The consequence of the government was the forced relocation of these rice importers to Cotonou port  and other ports in the West African sub-region to take delivery of their cargoes, which still found their way to Nigeria markets  through unapproved routes. Investigation by The Source shows that ship loads  of rice sailing to Apapa port and other ports within the country were said to have been diverted either  to Cotonou , Abidjan, or Tema ports in Republic of Benin, Cote’dvoire and Ghana respectively.

The Magazine learnt that ships loaded will  prefer to be on the queue at any of these neighboring countries seaport rather than sailing to Nigeria that has the market to discharge its cargo at the designated port.

Heineken Lokpobiri, minister of state, ministry of Agriculture and Rural development confirmed  that importation of  rice and other food items over the last couple of months had reduced  significantly, stressing that that  the battle has not been won. ” Food imports into the country are reduced to the barest minimum”.

Impounded Truck Load of Rice by FOU, Zone A,  Personnel
Impounded Truck Load of Rice by FOU, Zone A, Personnel

The drop in importation of  food items due to the government fiscal policy measures  baring  41 items including rice and vegetable oil have been the gain of smugglers.  Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry, LCCI,  wants the government to review the tariff on rice to curb its smuggling.

An aggrieved Yusuf said: ”Rice smuggling has continued to thrive , despite barring it from the forex market by the CBN”. He noted that rice is not a Contraband Commodity because it could still be imported through the seaport . The LCCI boss disclosed that what is creating the problem of smuggling  of the Commodity  is the high tariff of imports through the country’s seaports.

From, Lagos, Ogun, Oyo, Osun, Cross river, Kaduna, Kano Jigawa, Katsina, Sokoto, Kebbi, Zamfara, Kwarra to the north eastern states of Bauchi, Taraba, Adamawa, Borno to Yobe, the story is the same. Smuggling of rice and vegetable.

It is not surprising why rice and vegetable oil are found in all nooks and crannies of the Nigeria market. many believes that the Customs anti-smuggling war in the south is yielding results  with the seizure of thousands of ”50” kg bags of foreign parboiled rice which translates  to several trucks load of rice monthly. The arrowhead of the seizures, Muhammed Uba Aliyu, Comptroller, Federal Operations Unit, FOU, Zone A, was said to be making things making things difficult for the smugglers.

There is hardly a week, an insider said   that the Command Surveillance  and the Lagos Roving team officers including  the Headquarters Strike Force, Lagos, Zone, under  Salisu. A, an Assistant Comptroller, who is the Commandant.

Sources told  the Magazine some vegetable oil importing firms who had  queued into the government policy to import semi-processed have established vegetable oil processing  firms at established approved free trade zones within Lagos, Calabar, Onne and Kano to take advantage of the available raw material for processing and packaging of the product in the country. The establishment of these vegetable oil firms has created a big market for the palm oil market in Nigeria as farmers are smiling to the bank daily and job opportunities created for the teeming unemployed youths across the country.

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