The volume of rice exports to Nigeria from Thailand, one of the world’s leading rice producers has dropped sharply between 2015 and 2017, in what at first glance appears to be a result of ongoing efforts in the country to reverse the $1 billion spent on rice imports annually.
Data by the Thailand Rice Exporters association shows that 644,131 metric tonnes of rice was exported to Nigeria in 2015, while 58, 260 MT was exported in 2016, and as at September 2017, rice exports to Nigeria stood at 20, 973 Metric tonnes.
This represents a 58.5 percent decline between January and September 2016 and the corresponding period in 2017. However, when compared to 2015, Thai rice exports to Nigeria have dipped 96.74 percent.
Once one digs deeper into the data though, it suggests that most of the rice that used to be exported to Nigeria is now being re-routed to Benin republic and smuggled back into the West Africa’s most populous country through its numerous porous borders.
Data by the Thai rice exporters shows that Benin Republic has imported 1,330, 809 metric tons of rice, between January and September 2017 a 51.9 percent increase from the 876, 228 metric tons which was imported in the same period last year.
Comparing the 2017 imports (so far) to total imports in 2015 also shows there has been a 65 percent increase.
The agriculture promotion policy of the Federal Government for 2016 to 2020 shows rice production in the country is currently at 2.3 million metric tons per annum, with a four-million-ton deficit out of the country’s 6.3 million metric tons of demand.
BusinessDay investigations in Benin republic this year saw one of our reporters blending into the rice smuggling racket and successfully crossing back into the country with some bags of rice.
This is a process our reporter described to be seamless and throws up the dilemma for Nigerian authorities who seek to promote local production which at the moment is unable to meet domestic demand.
“I stopped farming rice for more than 15 years but the ban imposed on rice importation has now made me go back to farming,” said Sunday Oketa, chairman of rice farmers in Nkeleke Unuhu community, a rural settlement in Izzi Local Government Area (LGA) during BusinessDay’s visit to rice farms in Ebonyi state.
“Importation of foreign rice was responsible for the Made-in-Nigeria rice to become relegated, but since the ban on rice importation, we farmers have been encouraged to return to our farms and cultivate more rice,” Oketa added.
The Federal Government has a goal of self-sufficiency in rice production and has set a high 70 percent tariff on imports of the grain to promote domestic production.
Nigeria spent more than N1 trillion naira ($2.7 billion) importing food in 2015, according to the National Bureau of Statistics (NBS).
The country, which vies with Angola as the continent’s largest oil producer, is turning to farming as dwindling oil income drove the economy in 2016 to its first full-year contraction in a quarter century.
Dangote Group, the Nigeria’s largest conglomerate is making a five-year investment of at least $1 billion to grow and process rice in seven states.
Dangote Rice Ltd., a unit of the Lagos-based company, plans to increase cultivation of paddy, or raw rice, to 150,000 hectares (371,000 acres) and harvest an annual 1.7 million metric tons by 2019.
Tunji Owoeye, managing director, Elephant Group Plc, and Chairman, Rice Investors Group of Nigeria attributes the decline in rice imports to the commitment of both government and private sector in Nigeria, to end the era of needless importation. This, he says has manifested through incentives for local food production from the Federal Government, and championed by the Central Bank of Nigeria through its Anchor Borrowers’ Programme.
According to Owoeye, by discouraging imports, while at the same time encouraging local production, and supporting the value chain in ramping up production, the country has been able to achieve appreciable growth in self-sufficiency in food production, particularly, rice.
“What the FG and CBN have done is to create products that will help and encourage stakeholders, market operators across the value chain, and supporting them with intervention funds to ensure they ramp up production,” said Owoeye who was once chairman of the rice importers body in the country.
While official data shows rice exports to Nigeria have dipped, increase in imports by neighbouring countries such as Benin implies more smuggling is getting the commodity into Nigeria.
Akai Egwuonwu, CEO, Anambra Rice Limited had told BusinessDay that, after the mill commenced operation in 2008, it was shut down after a year (in 2009) till 2012 due to “excess importation of foreign rice that we cannot compete against.”
The closure saw a multi-million dollar investment wasting away while the hundreds of jobs it could have created, taxes it could have paid to government, and even returns on investment all made non-existent.
Godwin Umeaka, managing director, Coscharis Farms also shared these sentiments when he said “the government needs to sustain the fight against illegal importation of goods (especially food) into the country by securing the borders effectively.”
Owoeye of Elephant Group however noted that “A lot is being done by the Customs service to forestall smuggling into the country. What government needs to do is strengthen the resources of customs to do much more than they are doing.”
Owoeye said, the decline in rice importation is expected to be sustained as the Federal Ministry of Agriculture is also supporting the value chain by increasing milling capacities through the provision of integrated milling machines across the country.
CALEB OJEWALE
