Bags of rice
The Central Bank of Nigeria, CBN, and Rice Farmers Association of Nigeria made history on January 18, 2022, when they co-launched the Rice Pyramids on the premises of Abuja Chamber of Commerce and Industry, strategically located on Airport Road, Abuja, Nigeria’s capital city.
It was a celebration of success in the production of rice, Nigeria’s number one staple food. Rice production had been specifically targeted by the CBN, then under the leadership of Mr. Godwin Emefiele, through the Anchor Borrowers Programme, ABP, an initiative through which the CBN expressed determination to assist Nigerians grow their food, rather than spending scarce foreign exchange (FX) on the importation of food items that can be produced in the country.
As the then CBN governor put it, the rice pyramids were a demonstration of “the courage and persuasion of our farmers and the conviction that it is still possible to do great things in our country.” The CBN also rallied rice millers, under the umbrella of Rice Processors Association of Nigeria, RIPAN, which saw many people massively investing in rice mills across the country. The result was that there was not only abundant production of rice paddy by the farmers, there also were massive rice mills across the nation to off-take, mill and supply to the market highly processed, nutritious rice in the country.
“That is what strongly motivated the rice showboat in Abuja,” as one commentator put it.
The Rice Pyramid celebration happened exactly three years ago. The Anchor Borrowers Programme catalysed the rural economy by building a sustainable framework for financing small-holder farmers in Nigeria.
It developed an ecosystem among all nodes of the agricultural value chain, with linkages optimized through synergy among all stakeholders.
CBN data showed that as at the end of December 2021, the ABP had financed 4.489 million farmers that cultivated 5.300 million hectares across 21 commodities through 23 participating financial institutions in the 36 states of the federation and the FCT.
The success of the CBN initiative was evident in the crash of imported rice. Thailand alone exported 1.3 million metric tons of rice to Nigeria in 2014.
The ABP was launched in 2015 to curtail these imports. The outcome of the programme was instant and by 2016, rice imports from Thailand had fallen to only 58,000 metric tons.
As at the end of 2021, Thailand exported only 2,160 metric tons to Nigeria, thereby saving the nation foreign exchange and helping preserve jobs in Nigeria. National rice output ramped up from about 5.4 million metric tons in 2015 to over 9 million metric tons in 2021.
This was made possible by the massive public and private investments as the number of integrated rice mills grew astronomically from six in 2015 to over 50 in 2021.
A 50-kg bag of rice was sold at an average price of about N8,500 in 2015, rose to about N26,000 in 2020 and by November 2021, it had risen to an average of N32,000.
As at December 2023, a 50-kg bag of rice sold at an average of N47,000 but 2024 closed with the same bag selling for between N95 and N105,000.
What went wrong?
Effects of policy somersaults, insecurity and naira devaluation
It is obvious that upon inauguration, President Bola Tinubu recognised challenges posed by the skyrocketing food prices. That was why early in his administration, he declared emergency on food security in July 2023.
One year after, it was clear that the declaration of emergency on food security did not yield the desired results and food inflation remained on the upward trajectory.
Hunger became more widespread across the country and this led the Federal Government to announce another initiative to tackle the problem.
In July 2024, the government approved a 150-day duty-free window to allow importation of maize, husked brown rice, and wheat as part of measures to combat rising food inflation across the country.
The initiative was based on the implementation of the Presidential Accelerated and Stabilisation Advancement Plan.
In addition to these measures, government’s food security strategy included establishment of a guaranteed minimum price, GMP, for key agricultural products, aimed at stabilizing prices and supporting local farmers.
Another component of the strategy is a focus on boosting agricultural productivity among smallholder farmers in preparation for the 2024/2025 planting season, as well as promoting the production of fortified foods to address micro-nutrient deficiencies among Nigerians.
However, despite the optimistic outlook presented by these policies, the effectiveness of the measures in curbing food inflation has been questioned.
While some experts argue that the tariff moratorium and related policies could help reduce food prices, others have raised concerns about the potential negative impact on local agricultural producers.
Critics argue that by making imported food cheaper, local farmers could face increased competition, thereby reducing their market share and profitability during the duty-free period.
One of the most vocal critics of the government’s reliance on food imports is Dr. Akinwumi Adesina, President of the African Development Bank, AfDB.
Dr. Adesina warned that Nigeria’s increasing dependency on food imports could undermine the country’s agricultural policies and threaten long-term economic stability.
He advocated a greater focus on improving domestic food production, reducing reliance on imports, and ensuring that agricultural policies are aligned with the goal of achieving long-term food security.
Rising food inflation in Nigeria
The issue of food inflation in Nigeria has been a persistent challenge, exacerbating the already difficult economic conditions faced by millions of Nigerians.
According to the most recent Consumer Price Index, CPI, report from the National Bureau of Statistics, NBS, food inflation in Nigeria reached a staggering 39.93 per cent in November 2024, a significant increase from 32.84 per cent recorded in the same period the previous year.
This sharp rise in food prices has placed a heavy burden on households, with many Nigerians struggling to afford basic food items.
The NBS report highlights that prices for staple foods, such as yam, rice, maize, and palm oil, have surged, contributing to the overall increase in food inflation.
Other essential food items, including guinea corn, millet, and meat, have also experienced notable price hikes, further exacerbating the cost-of-living crisis in the country.
In fact, in 19 states, including the capital city, Abuja, food inflation rates have surpassed 40 per cent, significantly impacting the purchasing power of millions of Nigerians.
The zero-tariff food import initiative was not effectively implemented. It was planned to end in December, 2024. However, there had been no clear reports of those given approval to undertake the importation of the rice, maize and other items captured in the initiative.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, at the presidential policy implementation briefing and citizens’ engagement in December last year, revealed that about 50,000 tons of wheat and rice had been imported under the initiative. Another 32,000 tons of husk rice was reportedly brought into the country from Thailand. The rice arrived in Lagos, facilitated by DUCAT Logistics Company, which played a key role in ensuring the successful delivery.
DUCAT confirmed that the rice was part of this initiative, designed to increase food availability and reduce the pressure on local food prices.
Adrian Beciri, the CEO of DUCAT, said: “Nigeria has been working tirelessly to identify and implement solutions that will expand and strengthen its food supply chain, making food more accessible to the population.”
The total volume of the affected items to be imported and those involved remain unclear. What is clear is that about three years ago, Nigeria proudly announced it was nearing becoming not only self-sufficient in rice production but also close to becoming an exporter of the commodity.
But today, the story has changed; Nigeria is now importing rice.
Good-spirited members of the Nigerian public are asking questions on what happened that Nigeria would showcase high rice productivity, boasting it was approaching being a net-exporter of rice only three years ago and now importing rice?
Nigeria’s rice production, availability, and affordability Stakeholders in the rice value-chain have expressed their views on what could be done to change the narrative and for rice to be on the plates of Nigerians at a relatively cheaper price.
Insecurity, high exchange rates bedevil rice production, affordability — Millers
The National President, Rice Millers Association of Nigeria, Peter Dama, while giving an overview of current rice production, put paddy production in 2024 at about 8.1 million metric tons.
He identified insecurity and high exchange rates as key factors militating against players in the rice sub-sector.
He said: “According to various sources of data on rice production in 2024, Nigeria’s paddy rice production is estimated at about 8.1 million metric tons, which is a slight decline from previous years, such as 2021, when production was at its peak, resulting in 8.4 million metric tons as contained in the report of the Food and Agriculture Organisation, FAO, in 2023.”
Speaking further, he maintained that Nigeria’s potential to produce rice for her citizens is high, based on available land and human resources and that the country could achieve higher yield as there is an estimated cultivable area of about 4.9 million hectares. Only about 1.7 million hectares have been used for rice farming.
On the current availability of rice in the market, he said: “Based on sources, the demand for rice in 2023 was pegged at 6.5 million metric tons but current local production meets only 57 per cent of the national demand.
It is estimated that due to the increase in population, the annual demand for rice in Nigeria by 2024 might have increased to about 10 million metric tons per annum. Vanguard
