…Importers incur huge losses as banks intensify recovery efforts
By Isaac Anumihe
Over 50 million bags of imported rice, worth about N1 billion, are now trapped in various warehouses in Cotonou, Benin Republic, since the Federal Government began implementation of the ban on foreign rice in Nigeria.
Several importers who violated the government’s import restrictions are now biting their fingers as they can no longer push the imported commodities into Nigerian markets through the borders.
One of the importers told Daily Sun that many of them have lost their collaterals to the banks because they cannot service their loans.
“We have lost a lot. The banks are not giving us breathing space. They have confiscated all our belongings,” he said.
Daily Sun’s investigations revealed that the new Controller General of Customs (CGC), Colonel Hameed Ali, had threatened to discipline the Customs Area Controller in charge of Seme Border, Victor Dimka, if any grain of imported rice finds its way into the Nigerian market.
To demonstrate his seriousness, Ali, last week, signed an agreement with the Beninoise government to the effect that any ship from Benin ports must be escorted by the Benin Customs and handed over to Nigerian Customs. He threatened to stop trade relations with Benin Republic if the government continues to allow contraband goods into Nigerian markets.
This tough stance by the Nigerian government had pitted the importers against their bankers because most of the importers borrowed to import the goods. They had targeted the ‘ember’ months – the Eid el Kabir and Christmas festivities – to flood Nigerian markets with imported rice. The products, Daily Sun learnt, have been warehoused for over six months under an unwholesome condition, leading to deterioration in quality.
Recall that after the ban, Nigerian government had placed 70 per cent duty rate and 60 per cent levy on all banned 41 items as against Benin’s 5 per cent levy and 10 per cent duty rate on them.
On August 12, 2015, the Central Bank of Nigeria (CBN) issued a directive stopping some imported goods and services from the list of items valid for forex in the Nigerian Foreign Exchange Markets. This policy implies that those who import such items can no longer buy foreign currency from the official window to pay their overseas suppliers. This means they will have to source forex from the parallel market or Bureau de Change to pay for their imports.
But Daily Sun investigations reveal that the locally-produced rice is scarce in the market because the supply side cannot meet the demand.
To this end, a 40kg rice now goes for between N12,000 and 13,000.