While the Nigerian government remains committed to the objective of promoting rice self-sufficiency by the end of 2015, there has been a recognition that the increase in levies on rice imports has fuelled smuggling of rice into Nigeria via Benin. This led the Minister of Finance to announce that the government had approved a “67% duty reduction on legally imported rice from the earlier $570 per ton (reflecting 110% duty) to $190 per ton (closer to Benin’s duties of $200 per ton)”.

Statements from the Minister of Agriculture however, appeared to contradict the Finance Minister’s announcement. The Agriculture Minister, Dr Akinwumi Adesina, has maintained that the government’s rice sector policy “is working well”. Indeed, USDA figures published in March 2014 show that milled rice production increased by 17% in 2013/14. Dr Adesina has also highlighted planned investments in the sector of US$300 million by the Dangote Group and US$40 million by the US company Dominion Rice. However, USDA noted that, so far, the Dominion Rice project – which was intended to “replace over 15% of all rice being imported by the end of 2014” – had “encountered multiple start-up challenges”, with no rice having been planted by March 2014. This led USDA to conclude that Nigerian rice production in the 2014/15 marketing year (MY) would be 8% below 2013/14 levels. While rice production in MY 2014/15 would still be 7.6% higher than 2012/13 levels, consumption would be fully 22% higher, fuelling further expansion of rice imports.

The Minister of Finance’s announcement about the reduction in import duties on rice was welcomed by the Rice Millers Importers and Distributors Association of Nigeria (RiMIDAN), which reported that many of its members had now placed orders for rice, with some 20 vessels scheduled to land rice in Nigeria at the lower level of duty. However, the USDA report noted that the vessels had refrained from entering Nigerian ports since the Nigerian customs service had insisted on “applying the higher duties”. A subsequent press report announced on 24 March that 11 vessels carrying rice were set to arrive in the Lagos ports in the next few days.

The USDA report notes the argument by market analysts that the lower duty would actually increase government revenues from rice imports, since it would encourage legitimate trade on which duties could be collected. This scenario is contrasted with RiMIDAN’s report that “nearly 3 million tons entered Nigeria illegally through informal cross-border rice trade” in 2013.

Nigerian rice production imports and consumption for 2012/13–2014/15 (tonnes)

Note: the figures are for the marketing year running from October to September.

Source: USDA, ‘Nigeria: Grain and feed annual report 2014’, 13 March 2014 (see below)

Overall, the USDA analysis considers it “very unlikely that [the government’s] recent efforts to boost domestic production will significantly affect imports in the near term”, noting that “Nigeria’s rice self-sufficiency debate has been around for a long time, yet Nigeria remains one of the leading importers of rice.”

The key to Nigerian rice sector development is seen by analysts to lie in “making Nigeria’s rice globally competitive”. This will require a range of “infrastructural and security challenges” to be overcome, in order to allow high-quality local rice to be delivered to urban markets at competitive prices. Development analysts “report that it will take Nigeria far beyond 2015 to address the infrastructural challenges and poor policy implementation which mostly account for the country’s low level of local rice production”.