The fuel subsidy scam probably broke the ceiling
in a room crammed with some of the worst
corporate perfidy. Nothing could more sabotage
the economic interest of a nation, many
Nigerians thought.
But then came the rice import quota scheme, an
unholy romance between politicians and
businessmen, at the moment stretching
corporate bad practices in Nigeria to an
incredulous length.
About N117 Billion is there for the pick. A total
of 26 companies are involved; two of which are
owned by a former Attorney General of the
Federation and a former civilian governor of
Kebbi State respectively. Predictably, in the all-
too-familiar Nigerian fashion, not all of the 26
companies selected for the scheme made the list
on merit.
The Central Bank of Nigeria (CBN) in 2014
disclosed that Nigeria spent an average of N800
Billion annually on the importation of rice.
Unofficial import receipts through the Cotonou
corridor was not captured in the CBN figure.
But the business of importing rice, a staple in
Africa’s most popular nation, is so huge and
attractive that four neighbouring countries of
Benin, Togo, Cameroon and even landlocked
Niger Republic have technically factored
transhipment or smuggling of rice and allied
commodities into Nigeria in their national
economic plan.
A recent figure from the CBN indicated that
Benin Republic imports almost as much rice as
China and nearly as much frozen chicken as the
UK. Most of the commodities are smuggled into
Nigeria.
Disturbed by the nation’s huge import bill, the
President Goodluck Jonathan administration in
2014 came up with a new rice policy to fast-
track national self-sufficiency in rice production.
The policy specified that owners of existing rice
mills and new investors with verifiable backward
integration in the rice value chain will be allowed
to import rice at10 per cent duty and 20 per
cent levy (30 per cent); while merchants who
have nothing to contribute to local production in
the form of rice farms or mills will be charged
10 per cent duty and 60 per cent levy (70 per
cent). Technically, it was a subsidy aimed at
building local capacity in rice production.
Subsequently, an inter-ministerial committee was
set up to work out the national rice supply gap
and allocate import licenses with appropriate
quotas in order to bridge this gap, same time
advancing the objectives of the national rice
policy.
On paper, this committee was to determine
beneficiaries and allocate quotas based on four
key criteria that assess investment of individual
companies into local rice production.
The criteria included a Domestic Rice Production
Plan (DRPP) that demonstrate evidence of
current or planned investment in domestic rice
production over a three-year period. The DRPP
was also expected to show the size of
investment, proof of land acquisition and
establishment of rice fields and paddy
production.
The second criterion was called paddy purchase
outlook from Paddy Aggregation Centres (PAC).
This should demonstrate a clear plan of
purchase of paddy from PACs, location of the
PACs and volumes of paddy to be purchased.
The third criterion was paddy purchase outlook
from outgrower farmers and farmer
cooperatives. This should include location of
farms, volumes of paddy to be purchased, etc.
The last criterion was proof of ownership of
integrated rice milling facility with par boilers
and dehuskers. This should include size of
planned installed capacity and evidence of
acquisition of integrated rice milling equipment.
Sources within the Ministry of Industry, Trade
and Investment told this reporter that the then
Minister of Agriculture, Dr. Akinwunmi Adesina,
by-passed the inter-ministerial committee in the
selection of beneficiaries and commensurate
import quota. Mr. Akinwunmi, now President of
the African Development Bank (ADB), was
Chairman of the inter-ministerial committee and
took key decisions as the arrowhead of
President Jonathan’s much-vaunted Agriculture
Transformation Agenda.
Mr. Akinwunmi was easily outwitted by
merchants and politicians who did not want a
change in status quo, and were known to have
resisted such in the past, industry insiders said.
Although the turf is different, the strategy is the
same. The same way Nigeria’s oil refineries
were put in comatose to pave way for massive
and lucrative import of refined petroleum
products, the same way entrenched interests
known in the industry as Rice Mafia, are
sabotaging local rice production to sustain the
rice import business.
In the final analysis, the rice policy was scuttled
to serve everything but national interest.
Companies who have no investment in the rice
value chain were granted quota. These
companies in turn sold the quota to other
importers who already had vessels on the sea.
The sellers of quota made huge profits without
any investments in Nigeria’s local rice
production and indeed did so without taking risk
or lifting a finger.
The same sellers have been working hard to get
more quotas in the bid to get more money from
the scheme without any investments, thus
holding the domestic rice policy to ransom.
Investigations by PREMIUM TIMES revealed that
the 26 companies that benefitted from the rice
import quota scheme included Milan, Bua, AA
Ibrahim, Stine Rice Mills, JMK Foods, Labana
Rice Mill, Elephant Group, Honeywell, Kerksuk
Farms, Wacot, Mikap Rice, Golden Penny,
Stallion, Umza International Farms Limited,
Dangote and Olam. Others were Tara Agro,
Ebony Agro, Atari Rice Industry, Ashi Foods, JAI,
Arewa Rice Mill, Onyx Rice Mill, Bansara Rice,
Danmodi and Klysat.
Investigations revealed that Mikap Rice is owned
by a former Attorney General of the Federation,
Michael Aondoakaa, while Ebony Agro is owned
by Charles Ugwu, a former minister of commerce
and industry.
Ashi Foods is owned by the immediate past
governor of Benue State Gabriel Suswam. Milan
Group is a business interest that also owns
Intercontinental Hotels while Bua is owned by
billionaire Ishaku Rabiu. Honeywell is owned by
Oba Otudeko while Elephant Group is owned by
Tunji Owoye. Labana Rice is owned by former
Kebi State governor Adamu Aliero while Keresuk
is owned by one Rotimi Williams.
Investigations revealed that for instance, Umza
Internationa Farms Limited has a rice mill in
Kano with a capacity of 30,000 MT. Beyond this
mill, Umza has no other investment in local rice
production. However, the company was given
import allocations in two categories: 36,000 MT
under existing miller allocation and also got
49,207 MT under investor allocation.
Dangote and Golden Penny have no existing
mills but got 115.204 MT and 91,887 MT
respectively. Stallion got a total allocation of
89,989 MT; that was 59,989 MT under investor
allocation and 30,000 MT under existing miller
allocation. It has two mills – one in Kano and
another in Markurdi.
Investigations further revealed that Mikap Rice,
owned by Michael Aondoakaa, has a very small
scale mill of between 15,000 to 20,000 MT. The
mill itself is government-funded. Mr. Aondoakaa
got 82,897 MT of import quota.
Wacot is in seeds business only while Labana
has two mills in Kebbi State. Many of the
beneficiaries were found to have no investment
in the rice value chain. They include Wacot,
Honeywell, Elephant Group, AA Ibrahim, Milan,
among others. Kersuk Farms has no mill. Stine
Rice has a mill but it is not in working condition.
Bua has only brown rice mill. It does not have
parboiling capacity; the mill is defunct. However
Bua received a total import allocation of 109,448
MT.
Ebony Agro owned by Charles Ugwu made
wrong investment decision. It built rice mill in a
place where there is no paddy. The same wrong
investment decision of building a mill where
there is no paddy was also made by Tara Agro.
Many of the quota beneficiaries sold their
allocations to importers. Mikap sold its quota to
Elephant Group. Stine Rice sold its quota to a
company called PJS. Elephant Group in May
2015 also received through the Jama'tul Nasril
Islam (JNI) waiver to import 100,000 MT of rice.
The religious organisation had applied for and
was granted waiver by President Goodluck
Jonathan to import the said metric tonnes of
rice and 25,000 metric tonnes of cooking oil
described in a letter from the Budget Office of
the Federation as 'donated foodstuff.'
One smoking gun on sale of import quota is
found with Umza International Farm Ltd.
Shipping documents obtained by this newspaper
showed that shortly after the release of quota
allocations and Umza was named one of the
beneficiaries, a letter dated December 20, 2014
instructed Marietta Bolten (owners of a ship MV
Marietta) to divert a cargo of rice originally
meant for delivery at Cotonou Port to Lagos
Port.
The cargo in question was a 15,500 MT Thai
Parboiled Rice 100PCT Sortexed of Thailand
Origin. The letter reads in part: ''The above
cargo was shipped on the above vessel … for
delivery at the port of Cotonou – Benin but we,
Navision Shipping A/S, hereby request you to
order the vessel to proceed to and deliver the
said cargo at Port Lagos – Nigeria to Pearl
Universal Impex Ltd, 7A Asa Afariogun Street,
Off Osolo Way, Ajao Estate, Isolo, Lagos, Nigeria.
The same Navision Shipping on the same day
gave two more instructions to Marietta ordering
it to divert another cargo of 3900.650 MT Thai
Parboiled rice to Port Harcourt for Pearl
Universal Impex. This second cargo, originally
meant for Cotonou Port was originally consigned
to STE Premiere Sarl, Niamey, Niger Republic.
The third cargo, 18,500MT Thai Parboiled rice,
originally destined for Cotonou Port was diverted
on instruction to Port Harcourt.
A visit to Pearl Universal Impex in Ajao Estate,
Lagos, showed that the company is no more at
No, 7A Asa Afariogun Street, the land address
used for the shipping transaction. There was no
forwarding address. Pearl Universal Impex is a
major rice importer owned by a group of foreign
businessmen that include the Chairman Pulkit
Jain, Nimit Jain, Pranshu Goel and Ramanathan
Srinivasan. Pulkit Jain was quoted in a recent
media report that his company “has been a
major importer of rice in the country with
imports of 350,000 metric tonnes of rice
annually in the past”
Given that Nigeria is the only country that
consumes parboiled rice, any cargo of parboiled
rice going to Cotonou is in the first place is
meant to come into Nigeria through land
borders.
All the cargoes diverted belonged to Umza
International Farm Ltd, one of the companies
that benefitted from government subsidy.
Shipping documents show that diverted rice
cargoes with the following bill of lading:
MRT1409-01(10,000 MT), MRT1409-03(1,000
MT), MRT1409-04(1,000 MT),
MRT1409-05(1,000 MT), MRT1409-09(1494.650
MT) and MRT1409-20(806.000MT) were
consigned to Umza International Farm.
Yet another document showed that Umza
International Farm Ltd has been importing rice
from Thailand purportedly to be transhipped to
Niger Republic. In October 2014 Umza, using the
same ship MV Marietta imported 1,000 MT of
Golden Standard brand of parboiled rice to
Cotonou for ‘transit to Niger’. The Umza cargo
has bill of lading MRT1409-03.
The same 1000 MT of same bill of lading
MRT1409-03 is named in the instruction letter to
the ship owners Marietta Bolten on 20th
December 2014 to be diverted to Port Harcourt
shortly after Umza was named as a beneficiary
of Federal Government rice import quota. So
also was another cargo of bill of lading
MRT1409-04 with Niger Republic as its original
destination.
Industry stakeholders are confused as to how
consignments of parboiled rice are transhipped
to a country that does not consume parboiled
rice. Maritime experts say this is another red
flag of irregularities and sabotage of the rice
value chain adding that parboiled rice is not the
only item 'officially smuggled into Nigeria' in the
guise the goods were meant for Niger Republic.
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