110% DUTY ON RICE: Govt, private operators lose N85.5bn in 10 months to vessel diversion

When the Federal Government imposed a 10 per cent import duty on rice and increased the rice levy from 50 per cent to 100 per cent early this year, it must have underestimated the adverse effect of the measure on the economy.
Investigation conducted by SHIPS & PORTS DAILY revealed that as a result of the measure announced in February through a circular signed by Central Bank of Nigeria (CBN) Director, Trade and Exchange, W. D. Gotring, not a single rice vessel has berthed at any Nigerian port over the past eight months.
SHIPS& PORTS DAILY can authoritatively reveal that rice shipments meant for the Nigerian market are channeled through the port of Cotonou, Benin Republic, and smuggled in small quantity into Nigeria.
When contacted, operators of the major general cargo terminals in Lagos and Port Harcourt including ENL Consortium, Greenview Development Nigeria Limited, Joseph Dam, and PTOL Terminal confirmed that they have not handled any rice vessel since March this year due to the 100 per cent rice levy and 10 per cent import duty.

“The importers and shipping lines no longer come here. Rice was our major commodity at this terminal. This is the season for rice but unfortunately here we are, the terminal has dried up. Not one vessel of rice is at the terminal. You can go see for yourself,” the chief executive of one of the general cargo terminals who will not want his name revealed informed SHIPS & PORTS DAILY.
Based on the cargo throughput of the corresponding period of last year, at least 800,000 metric tonnes of rice should have been handled at Nigerian ports over the past eight months but all the vessels carrying rice meant for Nigeria now berth at Cotonou port with the attendant loss of revenue to the Federal Government and private concerns in the country.
Based on the 800,000 metric tonnes estimated tonnage, Nigeria is believed to have lost about N78.44 billion in Customs revenue made up of the one per cent Comprehensive Import Supervision Scheme (CISS); 10 per cent import duty; ECOWAS Trade Liberalisation Scheme (ETLS); 100 per cent rice levy and the seven per cent port development levy.

Government is not alone in the revenue loss as general cargo terminal operators who handle rice vessels are believed to have lost at least N900 million over the past eight months while shipping agents and clearing agents’ losses are estimated at N164 million and N152 million respectively.
Maritime truck operators’ loss is estimated at N5.1 billion which represents the amount they would have collected from owners of the cargo if they had carried out the haulage operation of the 800,000 metric tonnes.
National Coordinator, Trans-Border Trade Association (TBTA), Alhaji Mikky Okunola, told SHIPS & PORTS DAILY that about 1.6 million bags of rice worth N9.7 billion are smuggled into the country monthly from Benin Republic.
Okunola said government’s measure has impacted negatively on investors and the government’s initiatives to encourage local rice production.
He said the policy was aiding rice smuggling, urging the Federal Government to reverse it.