A coalition, Civil Society Network against Corruption (CSNAC), has urged the Economic and Financial Crimes Commission (EFCC), to urgently set in motion its investigative team to unravel the alleged abuse and massive fraud in the N117billion rice import quota scheme.
In a petition to the anti-graft agency, signed by the coalition’s chairman, Mr. Olanrewaju Suraju, CSNAC urged the chairman of the EFCC, Ibrahim Mangu, to look into the report of an online Newspaper, Premium Times, on the massive fraud.
According to the report, a total of 26 companies were involved in the deal, two of which are allegedly owned by a former Attorney General of the Federation and a former civilian governor of Kebbi State respectively.
“Due to the huge amount spent on rice importation by the Federal Government, the 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 at 10 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 waiver aimed at building local capacity in rice production. Subsequently, an inter-ministerial committee which was headed by Mr. Akinwunmi Adeshina, current President of Africa Development Bank (ADB), was set up to work out the national rice supply gap and allocate import licenses with appropriate quotas in order to bridge the gap and at the 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 report also stated 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.
The online Newspaper report stated 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 Kebbi State governor Adamu Aliero while Keresuk is owned by one Rotimi Williams.
The report further stated that for instance, Umza International 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.
“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. 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.”
“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. 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.
Raising another issue, the report says, “there are also discrepancies in milling capacities and the local rice production capacity. Under former Minister Akinwunmi Adeshina, the ministry of agriculture claimed Nigeria was producing 2.2 million MT of paddy. However, all the rice mills in Nigeria have a combined annual capacity to mill only 600,000 MT of paddy. The remaining 1.6million MT remains unaccounted for. Yet, allocations of rice import quota were based on these phony capacities of rice millers and investors, many of whom at the end sold off their quotas to the detriment of the rice subsidy goals.
“Besides the discrepancies in the rice milling capacities, Cotonou, Benin Republic have become a safe haven for smuggling of rice through the land borders into Nigeria thereby sabotaging the Nigerian economy through evasion of taxes, levies and import duties. The report revealed that sometime in April-May 2014, 11 ships sailed into Nigeria’s territorial waters from Thailand and they refused to berth at the Apapa ports in order to avoid paying tariffs to the Nigerian government. The ships were expected to pay a total of 11.5billion naira in tariffs to the Nigerian government.
“The Senate on July 30, 2015 announced members of its ad hoc committee on waivers, concessions and grants to look into the abuse of the waivers on rice importation in order to aid the recovery of government revenue. However, it does not seem like this committee will be able to carry out its duty efficiently and without prejudice as its chairman is former Kebbi State Governor, Senator Adamu Aliero who is also the chairman of Labana, one of the rice subsidy beneficiaries.”
CSNAC in its petition noted that, “From the foregoing, just like the fuel subsidy scam, this is another case of economic sabotage by a cabal of some sort who will stop at nothing to ensure that they continue to make profit, at the expense of the suffering Nigerian citizens and the economy of the country as a whole.
“This laudable policy introduced by the former administration would have revolutionised the Nigerian economy in terms of putting Agriculture and rice production on the map again, had it not been hijacked by this cabal.
“CSNAC is therefore by this petition, calling on the commission to exercise its full powers in conducting a thorough investigation into the abuse of the rice importation waiver, as well as prosecute the perpetrators and those who have corruptly benefitted from the scheme. They should be made to refund benefits derived from the fraudulently obtained waivers. This will go a long way in charting a new course for the efficient and effective implementation to the rice policy, thereby boosting rice production in the country, improving the livelihood of small scale farmers in Nigeria as well as revamping the near comatose state of Agriculture in Nigeria.”