Government policy on rice increases smuggling — LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has criticized the rice policy of the Federal government which it noted only increases smuggling of the item.
It would be recalled, that, the Federal government in a bid to boost local production of rice and protect local millers, banned the importation of the product through the borders while at the same time slammed a higher tariff of about 70 per cent duty on those that legitimately come through the sea Ports.
However, the Director General of LCCI, Musa Yusuf, observed that the policy, rather than reduce the importation of rice as envisaged by government, has only helped to increase it through smuggling.

Speaking during a chat with newsmen in Lagos, Yusuf said sometimes the government put policies in place without analyzing the consequences.

He said the federal government has only succeeded in reducing the importation of rice through the official means, but the government is yet to reduce the importation of rice into the country.

“There is no ban on rice importation, what happened is that the duty has increased to like 70% or more. The whole idea is to encourage local production of rice, but whether we are achieving that result or not is a different matter. I have heard government officials say that importation of rice had gone down by 90%, that is rice that comes through official channel”.

He also urged the government not to place high tariff on goods, saying that it would only increase smuggling of goods even as he charged the government to create the domestic capacity to meet some of the demands of people.

He said that high tariff will lead to loss of revenue by the government also and makes compliance to trade laws difficult.

“Once your tariff is very high, imports cannot come through the official channel, but that does not mean that those imports are no longer coming in. So you need to visit the markets to be able to know whether indeed the importation of rice has reduced”

“What has reduced is not the importation but the official importation. So for as long as you don’t have the domestic capacity to meet some of these demands, you will continue to create problems of compliance and create a situation where government will even be losing revenue”.

“We even continue to create situation where government will be creating more businesses for the illegal operator and smugglers at the expense of decent players in the sector who are ready to pay duty and do good business”, he argued.