FG Cuts Duty On Imported Rice

okonjo-iweala

Nigeria authorities have slashed the 100 percent levy it imposed on imported rice, in January 2013 to 20 percent and 60 percent for rice mill owners and traders following persistent pressure from stakeholders, who said the country was not ripe enough for this move since it has not started producing enough to meet local demand.

 

“Importation of wholly milled rice or semi-milled rice and Husked Brown rice, whether polished or graze or not by fully rice traders shall attract a levy of 60 percent plus import duty rate of 10 percent, while a levy of 20 percent and duty of 10 percent has been imposed on investors with rice milling capacity and verifiable backward integration programme,” the Policy stated.

 

While Nigeria was waiting for the announcement of the new policy, Dr. Ngozi Okonjo Iweala, the coordinating minister for the economy and minister of finance, submitted a letter to the Nigeria Customs Service instructing the body not charge demurrage to importers with shipload of rice at the ports until the new levies have been passed.

 

According to industry experts, this new rate remains unfavourable to investors engaging in backward integration, with neighbouring countries like Cameron, Benin Republic charging zero import duties on rice. Rather, an increase in levy for wholly traders was advocated for. This will encourage local production and discourage smuggling through neighbouring countries, experts explained.

 

It is also expected that this policy will reduce the price of rice in the Nigerian Market. Prior to the establishment of the levy, a bag of rice sold for an average of N8000 ($50). But since 2013, prices have surged to N13,000 ($80), a 37 percent jump in less than two years.

 

The country’s ministry of agriculture placed importation at about 1.9 to 2 million metric tonnes per annum.