Smugglers and rice business in Nigeria

The incidence of rice smuggling into the country has not only made business difficult for genuine rice importers but also denies government of valuable revenue that would have been generated through proper payment of duties and levies at the ports
A survey has shown that the major rice markets in Daleko, Iddo, and Ebute Ero markets in Lagos among others are over flowing with smuggled rice of various brands.

Mufutau Gbadamosi, President of Rice Importers and Distributor Association of Nigeria (RIDAN), said that the smugglers have almost driven the importers into extinction because they evade duty and taxes and sell at cheaper prices. “You know that the margin on a bag of rice is quite small, a maximum of N150 per bag. For those of us that import into the country through sea ports pay duties, levies and pay wages, one would see that the smugglers are sabotaging the economy.

“Beside the smuggling activities, the Federal Government has increased the value per tone of rice to $640 from $590 while duties on it had increased to 32 per cent in accordance with international benchmark,”

Following the negative impact of these unbridled smuggling of goods, especially rice, association o has raised alarm that smuggling of the commodity into the country through Seme and Idiroko border is threatening their business. He noted that the situation is so bad now adding that it was act of patriotism and the need to contribute to the revenue of the government that was keeping them in operation.

According to him, in the past, the smuggling of the commodity into the country was not a serious threat to importers, but now, with smuggling assuming a much more frightening dimension, the challenges have become enormous. “With these increases, importers now pay $205 as against $190 per tone besides the benchmark of $640 and the cost of freight and other ports charges,’’ Mohammed said.

John Akigbe, a nutritionist, said that since rice is the staple food of Nigerians, the Nigeria Customs Service seems to be paying lip service to smuggling activities because the end cost of rice is borne by the common man. Akhigbe said that the ugly aspect of the issue is that the lives of many Nigerians are at risk because most of the smuggled rice is unwholesome for human consumption. He explained that all imported rice into the country was duly tested and certified by NAFDAC as well as had an approved brand.

Gbadamosi, the president of the rice importers noted that about 560, 000 tonnes of parboiled rice imported into Republic of Benin in 2009 have found their way into the Nigerian market, resulting in a loss of N16.3 billion to the economy. “We all know that the Beninoies do not eat parboiled rice,’’ he said. He equally remarked that the quantity of rice smuggled into the country through the nation’s borders was increasing by the day.

He added that the increase, which started as far back as 2005, had continued to increase astronomically. He said if the activities of the smugglers remained unchecked it would cripple the activities of genuine importers. A survey at the Seme and Idiroko borders posts showed that the big-time smugglers now have long queue of specially built trailers to carry 72 tonnes of goods mostly rice as against the 32 tonne trailer. He also noted that apart from the huge revenue loss and the hazard such products pose to the Nigerians, the excessively loaded trailers damage the nation’s roads further creating huge maintenance cost to the government.

It was observed that the small time smugglers at the Seme and Iiroko border posts have become virtually lawless as they result to all manners of mischievous activities to circumvent the law and smuggled such products into the country. The security agencies at the borders include the Nigerian Custom Service (NCS), Nigeria Immigration Service (NIS), the

Nigerian Police Force (NPF), Nigeria Army Intelligence, Quarantine Agency, The State Security Service (SSS), and Nigeria Drugs Law Enforcement Agency (NDLEA) etc.

Joesph Akin, an importer of rice, said that any increase in duty, tariff, levies and benchmark always triggers an increase in the importation of such products into the Republic of Benin and Togo ports with the intention to smuggle such products into Nigeria In addition, he said such government inconsistency in policy create room for fraud and gives opportunity for security agencies to take undue advantage. “It makes security agencies to connive with smugglers to evade taxes and flood the Nigeria markets with such products. “Most of the security agencies use all means of influence to remain at the lucrative border posts. Even when they are posted out, they wangle their way back within the shortest possible time,’’ he said

Chukwu Okoro, another importer of rice, suggested that the Anti-Graft Commission should monitor and investigate NCS officers. “They should start to prosecute and jail such officer to serve as deterrent to others. “Nigeria can not achieve 48 hours cargo clearance without proper reform and sanitisation of the customs,’’ he said.