Massive Smuggling Hits Nigerian Rice Market

Massive Smuggling Hits Nigerian Rice Market

With the kick-off of the new tariff regime on rice in the country this month, smuggling of rice into the country has assumed a frightening dimension, THISDAY gathered at the weekend.

The Agricultural Transformation Agenda of the Federal Government led to a tariff increase to help position locally produced rice to compete fairly in the market with the imported ones and subsequently move Nigeria to self sufficiency in rice production.

According to THISDAY investigations, thousands of bags of rice worth millions of naira are being smuggled into the country on a regular basis through waterways linking Nigeria with Benin Republic, avoiding all legal duties and jeopardising efforts to boost local production of the product, as well as undercutting the business of genuine rice importers.

Nigeria’s local consumption of rice stands at about 5.5 million tonnes annually and with locally processed rice standing at about 3.5 million tonnes per year, smugglers are taking advantage of the high tariff to make brisk profit through avoiding legitimate levies.

Commenting on the issue, Vice President of Rice Importers and Distributors Association of Nigeria (RIDAN), Mr. Boniface Nwodo, said that the duty per tonne of rice imported into the country has increased from $227 dollars to $367 or about N58,000 currently, adding that the increase would likely trigger increased smuggling of rice.

According to Nwodo, the smugglers have devised another means of bringing rice with canoes due to the ban on importation of rice though the nation’s land borders.

Recently, the federal government increased the duty on imported rice from 20 per cent to 40 per cent but some stakeholders said that a computation of this with other charges like ETLS of 0.5 per cent and FOB of one per cent brought the total duty and levies from 32.5 per cent to 50.5 per cent and that this has some impact on trade in rice.

Nwodo said the problem with the additional charges was that it would likely encourage smuggling. He however advised government to monitor the unscrupulous import of rice through its water bodies to achieve its desired policy ideals.

RIDAN’s worries arose amidst reports that over 8,000 bags of rice are smuggled into the country daily, and the calculation is that this runs into several millions of naira.

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