Investors & abuse of rice import quotas

THE allegations of sabotage of Federal Government’s rice policy by some investors deserve thorough investigations and sanctions where applicable. Attempting to get around rules and regulations at the expense of the consumers is bad enough, but the alleged loss of a huge sum of N36.56 billion by the government over exceeded import quotas is highly unacceptable and stands condemned. Upon confirmation of this economic sabotage by any so-called investor, prosecution of culprits is a necessity as a deterrent to other saboteurs. Nigeria’s economy, it must be proven to all, is not for sale or easy manipulation.

   The probe should be thorough and conclusive to reveal the culpability of the investors given that their association has strongly expressed reservations about the accusations levelled against the members by the Minister of Agriculture and Rural Development, Akinwumi Adesina. It will, therefore, be dignifying for the minister to address one of the rice investors’ groups’ claim of information gap in the ministry, which might have misled the minister to go public with the allegation.

   Fair enough, the contentious rice plan is seen as a flagship policy in the agricultural sector, aimed at bridging the gap between mass importation of rice and local production which Nigerians have clamoured for over the years to reduce pressure on available foreign exchange. Government has clearly expressed its commitment to the success of the programme with 2017 as target date for bringing the national supply gap down to zero from its present 1.5 metric tonnes (MT). Investors should, therefore, work to buy into this policy direction if they would not open themselves up to accusations of being interested only in fleecing the Nigerian economy. 

   The minister had accused some ‘foreign’ investors of exceeding their preferential allocation quotas thereby incurring N36.56b debts on the treasury. This is a serious indictment. Government also threatened to come hard on importers who re-bag locally produced rice as imported products while enjoying waivers. Citing data from the Nigeria Customs Service, the ministry claimed it identified culprits among the companies that imported 634,270.16 MT of rice representing 56 per cent of the total imported finished rice under the new policy as at early December, 2014 – far in excess of approved quota, to shortchange the treasury. Two of the companies charged and listed as ‘Asian companies’ are allegedly in default by N28.39 billion and were alleged to have written to the minister for a revision of the quotas to cover the quantity ordered but without approved quotas or Domestic Rice Production Plans (DRPP) as required.   Only a mere agreement with the Customs to pay the duties and levies once quota allocations from the inter-ministerial committee are out cleared the way. Why then is the process open to such abuse?

   Normally, a conditional approval is always given once the request is supported by a DRPP bond to guarantee commitment to domestic investments in production and processing. Failure to execute on the plans leads to a call on the bond. Unambiguous as the official explanation and the need for the minister to defend the country’s integrity may seem, an instant reaction four days later by a certain association, The Nigerian Rice Millers Association (NRMA), is bound to raise eyebrows about the official claims. Curiously, five days after NRMA went public with reservations, another group, Nigerian Rice Investors Group (NRIG) countered NRMA’s claims in support of the minister, calling the other group a “fictitious organisation.” 

   The development has thus become a media war, which is totally uncalled for. Culpability of any of the parties should become a public issue only after a conclusive investigation of claims, harmonization of positions, especially since the affected debtors claimed the Customs was yet to communicate financial obligations to them. Strengthening their argument, NRMA, which cited “gaps in information,” said the surplus arose from a released quota allocation six months after a circular to that effect in May 2014 by the Minister of Finance titled “2014-2017 fiscal policy measures on rice.” Investors claimed to have depended upon that to import products. It also alleged that the minster’s letter of November 27, 2014 received early December imposed the bond “without consultation with stakeholders” besides the retroactive levy imposition. An indication of a long-drawn battle over the matter was given by NRMA, which then said debts are “misconceived and baseless.”

   Certainly, some gaps are evident in the whole saga, and the information minister has to clarify the status of those investors laying claim to recognition. Also, he has to be open about the identity of the defaulters he merely described as “Asian countries” and “Asian companies” especially as NRMA denied this, saying its members are “duly registered and are operating legally as prominent rice millers, farmers and importers”.

   Evidently too, NRMA and NRIG are in a superiority battle even though the NRIG seems a latter-day entrant into the industry going by its claim of maiden meeting in December. And it must be established if the NRMA is a fictitious organisation as NRIG claims! How far has it been dealing with the ministry? Was there any correspondence between the minister and NRMA pre-December quota raise?

  From the claims and counter-claims, it is apparent that confidence level in the system is very low and the entire process is more than a little opaque. An inter-ministerial committee should intervene and investigate all claims and show fairness to all sides in bringing out the truth. More important, all loopholes must be plugged, the losses to the country must be recouped and the system re-organised.