Nigeria loses over N110bn as revenue on rice drops by 90.6% in 2013

The Federal Government has in the last 12 months lost over N110 billion, being the amount that was supposed to have accrued into the Federation Account as import duty collected on imported rice by the Nigerian Customs Service (NCS).

The revenue collected on imported rice in the last 12 months since the nation changed its fiscal policy on imported rice to 110 percent import duty and levy, aimed at reducing the volume of imported rice and encouraging increased domestic rice production, has dropped by 90.6 percent.

Statistics show that in 2011, Apapa port, which specialises in handling bulk cargo, especially rice, generated the total sum of N131.4 billion as revenue from rice. The above mentioned figure dropped by 4.59 percent to N125.3 in 2012, while the revenue witnessed a drastic drop of 90.6 percent to N11.8 billion in 2013.

“Despite the fact that rice used to be the mainstay of Apapa port as a break bulk handling port, rice is not coming into Apapa port at all and this is really affecting our revenue collection,” said Charles Edike, area controller of the Apapa Area 1 command of the Nigeria Customs Services.

A breakdown of statistics as given to BusinessDay by Edike shows that in January 2013, revenue on rice contributed 4.5 percent to the total revenue collected by the command. In February, it contributed 0.9 percent; 7 percent in March, 0.9 percent in April, 22.2 percent in May, 132 percent in June, 0.0 percent in July, 0.2 percent in August, and 0.0 percent in September, October, November and December.

In 2012, before the implementation of the new fiscal policy on rice, the revenue on rice contributed 36.9 percent in the month of January, 22.7 percent in February, 32.0 percent in March, 71 percent April, 80 percent in May, 69.2 percent in June, 5 percent in July, 2 percent in August, 11 percent in September, 15 percent in October, 23 percent in November, and 96.1 percent in December.

In 2011, the revenue on rice contributed over 9.7 percent in the month of January, 30 percent in February, 78.4 percent in March, 39 percent April, 71 percent in May, 83 percent in June, 95 percent in July, 41 percent in August, 78 percent in September, 31 percent in October, 22.5 percent in November, and 37.6 percent in December.

According to statistics from Federal Ministry of Agriculture, Nigerians consume about 5 million metric tonnes of rice annually, which sums to about 100 million 50kg bags of rice. Therefore, the total rice consumption in the country is in excess of N1 trillion annually at a minimum price of N10,000 per 50kg bag.

Also, about 2.9 million metric tonnes, which amounts to 58 million 50kg bags of rice, is the estimated quantity of rice that is produced locally, while the remaining 2.1 million metric tonnes of rice is imported into the country through the seaports annually.

Confirming this in an interview, Vicky Haastrup, executive vice chairman, ENL Consortium Limited, the operator of Terminal C and D of Apapa port in Lagos, told Business and Maritime West Africa that rice is a commodity which Nigeria has completely lost to Benin Republic since the Federal Government imposed the 110 percent duty on rice.

By her estimates, government has lost over N80 billion from her terminal alone in 2013 because rice rarely comes to Nigerian ports now, yet there is no scarcity of foreign or imported rice in the Nigerian market.

“Given the 110 percent duty, the landing cost of rice became very high for importers to pay, that is why importers now prefer Benin port where the landing cost is cheaper. Nigeria is not producing enough rice and the local production cannot satisfy the local demand for a population of 170 million. Therefore, imposing such high customs duty will help the importers to take cargo to the neighbouring ports where it is cheaper to import,” she said.

Continuing, she added that ENL handled only one cargo of rice in 2013 compared to the previous years where rice vessels started from September to congest the port due to the high importation that came with the festive season.

 By: Uzoamaka Anagor