How Jonathan govt. issued multi billion naira rice import quotas last day in office

A few hours to the expiration of President Goodluck Jonathan’s
tenure, papers for a huge rice import quota worth billions of Naira
were rushed in for the president’s accent, ostensibly as parting
gifts to cronies and businessmen close to the power corridor.
A state House memo dated May 27, 2015 and obtained by
PREMIUM TIMES conveyed the President’s approval of another
memo forwarded to him only a day earlier by his Vice President,
Namadi Sambo.
In the earlier memo dated May 26, 2016, the then Vice President
had sought a subsidy approval for select rice importers to bring in
a total of 782,000 metric tonnes under what was termed ‘2015
Rice Quota Allocations’.
The then President signed the largesse deal on his last day in Aso
Rock. But the allocation was rejected, and cancelled by the
succeeding Muhammadu Buhari administration.
PREMIUM TIMES had on December 21, 2015, published an
investigation detailing the corruption that plagued the 2014 Rice
Quota Allocations
and how some of the privileged beneficiaries of the rice subsidy
colluded with smugglers to subvert the national rice development
policy.
The report exposed the ingenious ways employed by the
beneficiaries to sell their quotas to pure businessmen, helping
them to dodge the payment of 40 percent tariff to government.
The same ingenuity was deployed to divert cargoes originally
meant for Cotonou, a notorious seaport that thrives on
welcoming any vessel carrying items on Nigeria’s import
prohibition list.
The May 27, 2015 quota was not the first to be released for the
year 2015.
A botched attempt was earlier made on April 13, 2015 when a list
of 22 beneficiary companies was released by the Federal Ministry
of Agriculture after what was supposed to have been a laborious
due process.
However the joy of the new beneficiaries were short-lived when
nine days later, on April 22, the same Agric Ministry reversed itself
and cancelled and withdrew all allocations.
Before the then Agriculture Minister, Akinwunmi Adesina, departed
for the African Development Bank as its president, he had in a
memo titled ‘Approved List of Companies Allocated Rice Import
Quota for April 2015 – March 2016 Period’ and sent to his Finance
Ministry counterpart, mentioned that his ministry had identified a
domestic rice supply gap of 1.3 million metric tonnes for the year
2015.
He said he had, therefore, issued import quota allocations to 22
approved companies to import 961,000 metric tonnes of rice at 10
percent duty and 20 percent levy.
However, in announcing the cancellation of Mr. Adewunmi’s
quota list, Permanent Secretary Of the ministry, S. T Echono,
talked about a new information reaching the ministry to the effect
that some Nigerian rice farmers were unable to sell their paddy to
local rice millers due to a flooding of the market with imported
rice.
Industry watchers blamed the flooding on influx of smuggled rice
from Cotonou and Niger Republic.
To keen observers, the discordant tunes coming from the same
Ministry belied high-powered politics in the scramble for a chunk
of a new national cake.
The second quota announced by Mr. Adewunmi had new
beneficiaries such as Arewa Livestock Farms, African Farms, Olea
Nigeria Ltd, Dependable Foods & Confectionary, Blue Line
Investments Nigeria Ltd, Quarra Rice, Hammond Wright Nigeria
Ltd and Blaine & Wilkes Nigeria Ltd.
All of them were however thrown out of the list of the third quota
beneficiaries supervised by Vice President Sambo.
The Sambo committee reviewed downward the national supply
gap from 1.3 million MT to 782,000 MT just as it pruned
beneficiaries from 22 to 20. But even the third quota allocation is
not recognised by the Customs service, and is treated as though it
never happened.
The gulf in the two figures bandied as national supply gap is seen
by concerned stakeholders as indicator of how sentiment and
cronyism are robbing government of much-needed revenue in
the face of dwindling oil fortunes.
A policy analyst, Evelyn Beredugoh, blamed the discrepancy on
phantom local capacities as claimed by many of the local rice
investors.
She said, “For you to qualify for import quota you must have a
rice farm or rice mill the size of which determines the size of your
allocations. Some people call themselves investors even when
they have no verifiable business down the rice value chain.
“Some of the investors quote local capacities that are only a
figment of their imagination. Because there is no serious
verification exercise, these phantom figures are added up as
national rice production capacity. The higher the local capacity, the
lower the national supply gap.
“In the end, you find that the actual supply gap might be higher
than the 1.5 million metric tonnes quoted in 2014. The real
beneficiaries remain the smugglers while the real investors face
hard times in boosting local production which is the only objective
of the rice policy.”

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