Nigeria: Why Grain Importation Delays Persist – Stakeholders

The implementation of Nigeria’s zero-tariff grain importation policy may be delayed as the Nigeria Customs Service (NCS) has yet to receive a comprehensive list of companies selected to participate in the program, according to information obtained by *Financial Vanguard* over the weekend. Additionally, the Federal Government is still refining the policy guidelines to address gaps in the initial documentation.

The policy document released last week specified eligibility criteria for companies wishing to import rice and other grains, focusing on those with established milling capacity and involvement in local agricultural production. According to the guidelines, only husked or paddy rice (rice harvested before milling) will be permitted for import.

To qualify, companies must have the capacity to mill at least 100 tons of rice per day, have been operational for at least five years, and demonstrate involvement in backward integration with farms capable of producing the volume of rice they intend to import. Similar stringent criteria apply to companies seeking to import other grains like maize, wheat, and sorghum.

The policy aims to streamline the import process while safeguarding the interests of local producers. Companies must sell at least 75% of imported items through recognized commodities exchanges, keeping detailed records of all transactions for government oversight. Failure to comply with the importation guidelines will result in the loss of waivers and the imposition of VAT, levies, and import duties.

Customs’ Readiness to Implement the Policy

Despite the delays, Comptroller-General of Customs Mr. Adewale Adeniyi expressed the NCS’s eagerness to implement the policy, describing it as a “bold move” to tackle high food prices. The NCS has made critical operational adjustments to ensure the seamless importation of these commodities, including the creation of special corridors to expedite the clearance process.

Adeniyi stated, “Our teams are supporting the development of the guidelines and will swiftly integrate them into our systems to ensure seamless implementation. This proactive stance will minimize any potential delay or confusion.”

Mixed Reactions from Stakeholders

The policy has elicited mixed reactions from stakeholders in the maritime industry, with some calling for its extension beyond the initial six-month period. Mr. Lucky Amiwero, President of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), argued that the policy’s stringent conditions might defeat its purpose. He emphasized the need for the government to clearly articulate its intentions and ensure the policy aligns with the realities on the ground.

In contrast, Dr. Muda Yusuf, Managing Director of the Centre for the Promotion of Private Enterprise (CPPE), defended the policy’s conditions, stating that they are necessary to prevent abuse and protect existing investments in the sector. Yusuf explained that the guidelines are designed to ensure that only serious players who can be effectively monitored are allowed to participate.

Concerns from the Rice Millers Association

The National President of the Rice Millers Association of Nigeria (RIMFAN), Peter Dama, expressed concerns that the policy’s requirement for a 100-ton milling capacity excludes many small and medium-sized millers who contribute significantly to the nation’s rice supply. Dama warned that while the zero-tariff policy may temporarily address food shortages, it could discourage local farmers if not managed carefully.

He urged the government to consider the impact on local producers and to ensure that Nigerian farmers and millers also benefit from the policy. Dama highlighted the challenges posed by high production costs and the recent fuel subsidy withdrawal, which have further strained the agricultural sector.

As the grain importation policy takes shape, it remains to be seen whether it will achieve its goals of stabilizing food prices without undermining the local agricultural industry. Stakeholders continue to call for a balanced approach that addresses immediate food security concerns while supporting long-term domestic production.