Bags of rice
By Sunday Okobi
The price of rice, Nigeria’s major staple food, is set to rise sharply as the Federal Government has imposed a 100 per cent special levy on the importation of the commodity in the country.
This was the position of a major stakeholder group in the sector, the Rice Millers, Importers, Distributors Association of Nigeria (RiMIDAN).
According to a statement signed by RiMIDAN’s secretary-general, Mr. Mohammed Shaibu, the Federal Government, effective from January 1, raised the special levy on imported parboiled rice from 40 per cent to 100 per cent.
With the 10 per cent statutory duty on rice, Nigerian importers now pay a total of 110 per cent duty on rice imported into the country.
RiMIDAN cautioned that the move had serious implications both for the ordinary Nigerian whose major food is rice and for the economy.
“The first major response of the market is that the price of rice is bound to increase sharply as the landing cost of a bag of rice has jumped to N11,000. It is therefore envisaged that the price of rice will soar to about N13,000 to N14,000 per bag. This is against the N10,000 it sells for now,” Shaibu said.
According to him, “The other dramatic effect of this hike in levy is that government seems to have declared a bonanza for smugglers because the duty on rice across the west coast of Africa still remains 10 per cent. The import of this is that the profit margin of rice smuggled across the borders would be so high and tempting that everybody would want to take the risk to the detriment of Nigeria’s economy.”
Shaibu explained that: “We at RiMIDAN appreciate government’s desire for Nigeria to achieve self-sufficiency in rice production by 2015 but we advise on careful planning and the institutionalisation of the Rice Special Levy Fund (RSLF). With this and partnership with all major stakeholders in the rice chain, Nigeria should be self-sufficient in rice production by 2018.”
Recall that President Olusegun Obasanjo in 1999 introduced the charging of 20 per cent levy on rice imports into Nigeria to enable the government set up a fund for local rice development.
This was later increased to 40 per cent a few years back.
This levy is now 100 per cent yet the rice fund is yet to be set up.
RiMIDAN’s membership, which include the Olam Group, Dana Group, Elephant Group, Flour Mill of Nigeria, PJS Group and Stallion Group, among others, has thousands of hectares of rice farms and state-of- the-art rice mills across the country.
“We wish government would carry us along in its plans,” Shaibu said.