The Federal Government’s new policy on rice, which has reversed the duty paid on imported rice from 110 percent (100 percent levy and 10 percent duty) to 30 percent (20 percent levy plus 10 percent duty) for rice millers and 70 percent (60 percent levy plus 10 percent duty) for other importers, has created fresh hope for increased importation of rice through the nation’s seaports this year.
Industry close watchers believe that the new policy, which allocates import quotas at 30 percent duty to people who have invested in rice production and existing millers, will not only help in bridging the gap created by insufficient local production but also reduce the alarming revenue loss due to drop in the volume of imported rice.
Statistics from Federal Ministry of Agriculture show that Nigerians consume about 5 million metric tonnes of rice annually, which sums to about 100 million 50kg bags of rice, putting the total consumption of rice in excess of N1 trillion annually at a minimum price of N10,000 per 50kg of bag.
Also, about 2.9 million metric tonnes, which amounts to 58 million 50kg bags of rice, is the estimated quantity of rice that is produced locally while the remaining 2.1 million metric tonnes used to be imported into the country through the seaports.
Going down memory lane, however, it would be recalled that the volume of imported rice recorded a drastic drop in 2013 when the Federal Government commenced the implementation of 110 percent duty on rice such that over N110 billion revenue loss was also recorded.
At that time, rice cargo, which used to be the mainstay of Apapa port, dropped as a break bulk handling port stopped coming into the Apapa port, and this affected the revenue collection of Customs, affirmed Charles Edike, Customs area controller of Apapa command.
BusinessDay check reveals that rice is a commodity which Nigeria in the past two years (during the implementation of 110 percent) lost to ports of neighbouring countries of Cameroun, Ghana and Benin Republic most especially. As a result, break bulk terminals like ENL Consortium Limited and Josep Dam also counted their losses as there were little or no business activities due to drop in the volume of imported rice.
Given the 110 percent duty, the landing cost of rice became very high for importers to pay, and this resulted to importers preferring Benin port where the landing cost was cheaper, said Vicky Haastrup, executive vice chairman of ENL Consortium Limited.