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Rice imports surge as higher tariffs imminent

15 April 2013

According to USDA’s Exporter Guide on Nigeria, published in November 2012, in 2012/13 ‘Nigeria is forecast to increase rice production by 200,000 tons to reach a total of 2.9 million’, while imports are forecast to increase ‘to 3 million tons from 2.5 million tons in 2011/12’.  However, a press report on ministerial comments at an agriculture financing workshop in December 2012 indicated that current imports could in fact be as high as 5 million tonnes. According to the Nigerian Minister of Agriculture, Dr Akinwunmi Adesina, ‘Nigeria is now the largest importer of rice in the world.’ Projections suggest that, on current trends, imports could grow to some 36 million tonnes by 2050. This is behind Nigeria’s adoption of what the minister termed ‘an aggressive import substitution programme for rice’.

In July 2012, new tariffs for rice were introduced: ‘a 30 percent levy on imported brown rice and a 50 percent levy on imported polished/milled rice’. A final increase in duty of 100% is scheduled for 31 December 2012. According to USDA, ‘the new expected tariffs have resulted [in] stockpiling of rice by importers and have increased cross-border trade in rice (with Benin and Cameroon)’.

Dr Adesina, speaking at the Securities and Exchange Commission workshop on agricultural financing in December  2012 and reported in the national press, maintained that the new tariff policy was already encouraging expansion in the rice sector, and noted that ‘13 new rice mills with a total capacity of 240,000 tonnes’ had been set up by the private sector. He added that the government was also providing incentives for ‘the acquisition of 100 large scale integrated rice mills, with a total capacity of 2.1 million tonnes’.  These facilities are to be operated by the private sector. Dr Adesina maintained that the current policies would soon ensure Nigeria has ‘the full industrial capacity to mill internationally competitive quality rice’. He noted also that new, locally produced, varieties of rice of a high quality are now appearing on the Nigerian market, and are proving more popular than imported varieties of rice. 

Editorial comment

The inconsistent application of tariff policies through the extensive use of duty waivers has attracted criticism in Nigeria. While it is recognised that waivers may be necessary to meet rapidly expanding consumer demand, it is considered that if efforts to promote local rice production are not to be undermined, then there is a need for greater transparency and predictability in the use of such waivers (and trade policy tools in general).

In addition the scale of rice smuggling should not be underestimated. According to press articles, informal estimates suggest that some 30,000 tonnes of rice per month is being smuggled into Nigeria across land borders, mainly from Benin. Tariff avoidance at Nigerian ports of entry is also a challenge. (See Agritrade article ‘ Benin rice sector aspirations and regional trade realities’, 6 April 2013.)

These factors point to a need to strengthen the effective application of agreed tariffs. However, serious constraints are faced in ensuring the more effective application of agreed trade policy measures in Nigeria (see Agritrade article ‘ Nigerian president hails success of government’s rice sector initiative’, 13 January 2013), leaving the future prospects for the Nigerian rice sector uncertain.


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