Saturday 23 January 2016

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  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.
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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