Benin Republic, Cameroon crash import duty on rice to cash in on Nigeria’s folly
Nigeria’s neighbouring countries, the Republic of Benin and Cameroon have crashed the import duty payable by importers of rice in their countries to take advantage of Nigeria’s burgeoning market, SHIPS & PORTS DAILY can authoritatively reveal.
Investigation by SHIPS & PORTS DAILY revealed that as soon as Nigeria increased the customs duty and levy payable on imported rice to 110% last year, Benin Republic crashed its own tariff from 35% to a paltry seven per cent while Cameroon introduced a zero per cent duty policy on the commodity, down from 10 per cent.
Analysts believed that the move by both countries was aimed at taking advantage of the huge Nigerianmarket where parboiled rice is a staple food. In the entire West African region, only Nigerians eat parboiled rice.
The result of the measures by both countries is the total diversion of all rice vessels meant for Nigeria to these and other neighbouring countries including Togo and Ghana.
Investigation by SHIPS & PORTS DAILY revealed that in 2013 when the 110% tariff policy was introduced only one rice ship berthed in the country as against over 500 in 2012.
Area Controller, Apapa Command of the Nigeria Customs Service (NCS), Comptroller Charles Edike, told journalists recently that the NCS was losing huge revenue as a result of the hike in rice import duty.
Edike disclosed that the command’s revenue on rice has plunged to an all time low as it has recorded zeroincome on imported rice since July last year. He said the hike in the import duty of rice to 110 per cent by the Federal Government early last year had impacted negatively on the Apapa Command revenue.
“The glory of Apapa Port is rice. The bulk of Apapa revenue is rice but now rice is not coming in at all,” he said.
He said the command collected a paltry N11 million by the end of November 2013 as import duty on rice compared to N131.38 billion collected in 2011 and N125.35 billion in 2012. ENL Consortium, which handles most of the rice cargo imported into the country is facing a difficult time as all its 11 berths are empty.
As a result of the strategy adopted by the neighbouring countries, Nigeria lost all its annual import of two million metric tonnes of rice to them.
Checks at the Cotonou Port revealed that the port handled an unprecedented 2.2 million metric tonnes of rice in 2013 compared to 650,000 metric tonnes it handled in 2012. A trade analyst at Seme Border, Didier Kouandete, said that most of the imported rice from Cotonou find their way into Nigeria.
Koundate, who is also a cargo consolidator at Counou Port said: “I believe about 1.6 million metric tonnes of the rice imported into Benin must have been moved by road into Nigeria because all of it is parboiled rice and we don’t eat parboiled rice in Benin. Also, there is no way Benin could have consumed all that quantity in one year.”
He said rice is brought into Nigeria enroute neighbouring countries largely due to the high import duty on rice in Nigeria even as he said the Nigeria Customs Service (NCS) appears helpless as the trend continues to the benefit of the neighbouring countries.
He said large trailers, which can carry between 60,000 and 72,000 tonnes of rice are now used to haul smuggled rice into the country from the Cotonou ports. About 70 of such articulated trucks bring rice into Lagos alone on a daily basis, he said, stressing that the smugglers have taken over rice business in the country.
The illegal way of moving goods across borders is eating deep into Nigeria, crippling the country’s economy. Observers say the federal government’s loss owing to unlawful importation of rice through the nation’s land borders may peak at N300 billion this year should the status quo remain. Recently, the Rice Importers and Distributors Association of Nigeria (RIDAN) expressed worry about the disturbing spate of rice smuggling into the country and appealed to the federal government to do something drastic about it.
Director, Agriculture and Rural Development Department, the Nigerian Institute of Social and Economic Research (NISER), Prof. Tunji Akande, said that since the mid-1970s, rice consumption in Nigeria has risen tremendously, at about 10 percent per annum due to changing consumer preferences, stressing that per capita consumption of rice during the 1980’s averaged 18kg and reached 22kg in 1995-1999. He said domestic production has never been able to meet the demand, leading to considerable imports which stand at over two million metric tonnes yearly.