Eleven ships laden with rice sail into Nigerian waters and berth at the Bar Beach, Lagos, evading Apapa port. EMMANUEL MAYAH trails the route of a N3 trillion economic sabotage against Nigeria, waged by Indian merchants; aided by Nigerian Customs, police, naval, army, immigration officers, and Finance Ministry officials.
Eleven rogue ships have entered Nigerian territorial waters unannounced. Each traversed at least 10,689 nautical miles from Thailand to Lagos.
A few miles to their final destination, Apapa port, they chose to ‘park’ on the high seas, one after another. The ships are so close to land they can be sighted from the Lagos Bar Beach.
There is no engine failure, no congestion at the port, and no conflict in the country to warrant the refusal of the captains and crew to complete their journey.
The 11 ships departed at different times, but they have one thing in common: all are laden with rice consignments and hired by members of a powerful rice cartel in Nigeria.
In the complex and dodgy multi-billion dollar rice import racket that employs top figures in the Nigeria Customs Service (NCS), the navy, the Ministry of Finance and the Nigerian Maritime Administration and Safety Agency (NIMASA), calculations had suddenly gone wrong with the ships told to halt sail.
Should they sail further into Apapa port, the merchants must pay the 110 per cent tariff on rice imports Abuja imposed in early 2013 to discourage import dependency and support local production.
Documents obtained by TheNiche from whistleblowers in the security services reveal the names of the ships as Hector, Star Capella, Wariya Naree, Aqua Runner, Silvretta, Eternity, Aeolos, Lake Hakone, Mraki, Atlantic Trade and Quest.
Depending on tonnage, a shipload of rice attracts between N1.2 billion and N1.5 billion as tariff. The 11 ships are expected to pay a total N16.5 billion to the treasury. This, the rice mafia is determined to evade.
Niger Republic, Cameroon cash in
Nigeria is the world’s largest importer of rice. Last year the Ministry of Agriculture published figures showing the country spends an average N365 billion annually to import two million tonnes of milled rice. That is N1 billion a day.
With consumers paying four times as much, rice import is officially put at N1.46 trillion. Additional 2.3 million tonnes come in through large scale smuggling supported by Benin Republic and Cameroon, to estimate the rice trade at N3 trillion annually.
For this amount, the rice mafia would attempt to bribe anyone, and possibly kill to protect their racket.
The Agriculture Ministry has reiterated that the government introduced the new tariff to encourage local production and help boost investors’ confidence in the rice industry.
Recently, Nigerian private investors set up 13 new rice mills with a combined capacity of 240,000 tonnes.
In 2012, the country produced only 1.4 million tonnes of paddy rice. With the new policy, paddy rice production rose to 2.9 million tonnes in 2013, according to Agriculture Minister, Akinwumi Adesina.
Nigeria had approached China’s Exim Bank for $1.2 billion loan to set up 100 large scale rice processing plants with a total capacity of 2.1 million tonnes, which Adesina estimates is enough to substitute imports.
But just as the wheat mafia resisted the 10 per cent cassava bread project, the rice mafia is pulling every string to thwart Abuja and protect lucrative imports.
The biggest allies of the rice racketeers are the officers of the Nigerian Customs, officially listed as collaborators with rice smugglers to deny Nigeria huge revenues.
By trailers, by boats, and barges – at night
Adesina has accused the Customs at a House of Representatives hearing of aiding smuggling and economic sabotage. “The rice that is being smuggled is not carried on the head or brought in by ghosts. The rice comes in trailers and in large quantities,” he said.
What he failed to add was that the smugglers also use boats and barges. The 11 ships anchored off the Lagos Bar Beach are secretly offloaded at night using boats and barges.
While boats are used to convey rice from the ships to trailers and warehouses, the barges take larger quantities to Sapele, Warri, Port Harcourt, Onitsha, Calabar and Oron.
A bemused maritime operator told TheNiche that for each day the ships are in Nigeria, the smugglers must pay $20,000 per vessel to the ship owners.
Said he: “A new tariff of 110 per cent was introduced in January 2013. These rice importers cannot claim they were caught unawares. If not smuggling, what else would make them bring in 11 shiploads of rice without any intention of paying one kobo to the government.
“The Customs know about this; they facilitate it. They are an integral part of the smuggling machinery. In fact, they own a market share of prohibited commodities.”
Defending itself against Adesina’s allegation, the Customs, the border police, disclosed that its anti-smuggling unit seized 220,177 bags of rice across the country in one year. The rice bags “are ferried in ones and twos on motorcycles, donkeys; with some concealed among bags of millet,” it claimed
But Timothy Abel, the Chairman of the Association of Nigerian Licensed Customs Agents (ANLCA), Idiroko border chapter, dismissed the Customs’ donkey story as laughable, saying the Customs was making scapegoats of peasants while the big smugglers have a free reign.
It was Abel, who, a few weeks ago, raised the alarm that as many as 300 cars made their way illegally into Nigeria in the dead of the night with the connivance of security operatives at the ever porous Idiroko land border in Ogun State.
He said: “These officers prefer to attend to smugglers than to attend to clearing agents because they can get immediate money for their own pockets rather than fighting for the one that will go to the federal government purse.”
Abel added that clearing agents at Idiroko are left with little or nothing to do as contraband items and dutiable goods are smuggled before their eyes from Benin Republic across the border into Nigeria.
Benin Republic connection
For 17 years running, a substantial part of the gross domestic product (GDP) of Benin Republic has come from “state support of smuggling into Nigeria.”
Ase Oyibo of the whistleblower network, National Conscience Group (NCG), said the Benin Republic government – working in concert with Nigerian businessmen and Customs officials – ambush a substantial part of Nigeria’s import trade.
“Before now,” he recounted, “Cotonou’s highest revenue earner was cotton. The highest their civil servants and businessmen could aspire to own was a motorbike. Today, their citizens own exotic cars and big houses and the government has built roads, fancy bridges and flyovers, all from smuggling goods into Nigeria.
“This they do in the name of transshipment, but you can only transship imported goods from your country to a landlocked country that has no seaport.
“So what sense does it make that Nigeria has eight seaports, yet is receiving imports from a tiny neighboring country with only one seaport? It will interest you to know that the same Cotonou transships goods too to landlocked Burkina Faso.
“When the goods get to the Burkinabe border, importers pay duties to Burkinabe Customs, but when the same imports come to Nigeria’s border, they are smuggled across, making Nigeria lose huge revenues.
“Once a Nigerian importer clears his consignment at Cotonou port, the gendarmes escort the goods to Seme border to make sure they are not diverted and sold in Cotonou markets.
“At Krape, the Benin side of Seme border, you find big warehouses built by the government of Benin where goods, including contraband, are stored before they are smuggled into Nigeria.”
Rice, textiles and second-hand vehicles are among the commonest items smuggled in from Cotonou. Since the high tariff on rice, Cotonou port has received unprecedented vessels carrying rice.
Confirming that neighbouring countries support smugglers, the Chairman of Seaport Terminal Operators Association of Nigeria (STOAN), Vicky Haastrup, said no fewer than 150 shiploads of rice were diverted to the ports in Benin Republic, Cameroon, Accra and Togo in the first quarter of this year.
Nigeria lost about 600,000 tonnes of rice between January and March 2014 to the neighbouring ports.
“The loss to other countries, as a result of the high tariff on rice was over N300 billion last year. In the first quarter of 2014, both government and private operators lost at least N80 billion,” Hasstrup disclosed.
Revenues affected by ship diversion and smuggling of rice to Nigeria include those of the Customs, terminal operators, dock workers and the Nigerian Ports Authority (NPA).
After Nigeria introduced 110 per cent rice tariff, Benin Republic crashed its tariff from 35 per cent to 7 per cent, to galvanise smuggling, its highest revenue earner.
Authorities in Cotonou swiftly repositioned to capture a huge market share of importation of parboiled rice, a staple in Nigerian homes. Nigeria is said to be the only country in West Africa where people eat parboiled rice.
The tariff crash has resulted in increased diversion of rice vessels meant for Lagos to Cotonou port.
Investigation showed that Port Autonome Cotonou handled a record 2.2 million tonnes of rice in 2013 against 650,000 tonnes in 2012. Once discharged, the consignments are smuggled into Nigeria in trucks and trailers.
Some smugglers shun Seme and Owode border posts and travel a much longer route to Maradi in Niger Republic, from where they smuggle rice to Kano through Katsina. Others choose Konni in Niger Republic to smuggle it to Sokoto via Ilela.
While it is legal under the new Nigerian law to import rice, it must be done only through the seaports. Importation of rice through land borders is prohibited. Nevertheless, almost all the brand varieties in markets in Lagos, Kano, Sokoto and Calabar come in through land routes.
A visit to Lagos rice markets in Iddo, Daleko, Ketu, Mile 12, Alaba and Sango Ota, showed various brands of foreign rice on display.
Apapa Customs Comptroller, Charles Edike, confirmed that the glory of Apapa port used to be rice.
“The bulk of Apapa revenue was through rice but now rice is not coming in at all. We collected a paltry N11 million by the end of November 2013 as import duty on rice, compared to N131.38 billion in 2011 and N125.35 billion in 2012,” he said.
ENL Consortium, a major handler of rice imports in Apapa port, is facing difficult times as all its 11 berths are empty.
If anyone was still in doubt about the rice business, a Beninoise cargo consolidator, Didier Kouandete, told a French-language newspaper that most of the imported rice from Cotonou find their way into Nigeria.
Kouandete, who works at the Cotonou port, said: “I believe about 1.6 million tonnes of the rice imported into Benin must have been moved by road into Nigeria because all of it is parboiled rice and we don’t eat parboiled rice in Benin.
“Also, there is no way Benin could have consumed all that quantity in one year.”
He confirmed that trailers which can haul between 60,000 and 72,000 tonnes of rice are used to smuggle rice into Nigeria from the Cotonou port.
“About 70 of such articulated trucks bring rice into Lagos alone on a daily basis.”
N2.5 million bribe per truckload
According to Kouandete, an importer pays a bribe of between N2 million and N2.5 million per truck to Customs officials to allow the goods pass through the checkpoint to Nigeria.
Is an official receipt issued after payment? he was asked.
He replied: “How can you collect receipt on bribe money? It is not like paying Customs duty because you cannot pay officially since rice is banned through the land border. This is the money we pay to the Nigerian border officials otherwise the rice will be seized.”
Kouandete said sundry bribes are also handed out at other checkpoints mounted by various security agencies, including the army, police, immigration. They demand between N10,000 and N20,000 depending on the size of the truck.
Aside Cotonou’s systemic bleeding of the Nigerian economy, rice smuggling also provides employment for Beninoise motorcyclists.
At the Seme and Owode border stations, a swarm of motorbike taxis, over 100 of them, carry four or five bags of rice each across the border. This determined army can smuggle the equivalent of four trailers of rice in one day.
Astonished by how Benin Republic has turned smuggling into a huge industry, blogger Godson Offoaro wrote: “Benin Republic is not Germany where Mercedes Benz and BMW and Audi and all brands of Volkswagen are made. Benin Republic is not Japan where Nissan, Honda and Toyota hold sway.
“Benin Republic is not the birth place of Chrysler nor do GMC and Ford have any manufacturing plants in Benin Republic (yet this is where three-quarters of automobiles used in Nigeria come from).
“Benin Republic is not a rice growing nation. It grows kolanut, may be only for local consumption. It is neither a wine brewing country nor a country noted for its first class perfumery. Benin Republic has no crude oil gushing from its soil.
“Strangely, Benin does not have the population either to consume a myriad of its conspicuous consumption-like import style. Instead, it is the hope of smugglers trooping into Benin to buy made in Europe goods for the Nigerian market that has kept the economy buoyant for decades.
“Its ports are open to anything in the world because of Nigeria. And this has made Benin Republic a rich Republic. Its per capita income is higher than that of Nigeria. Yes, Benin’s major foreign exchange earner is through its tiny seaport.”
Malaysians, Syrians, Lebanese, Ghanaians feed off Nigeria’s back
Major smugglers from across the globe, especially Lebanese, Indians, Syrians, Malaysians, Nigerians and Ghanaians, congregate in Cotonou to launch what has been described as an economic attack on Nigeria.
The 11 ships mentioned at the beginning of this story belong to Indian merchants.
Rice smuggling has so boosted the GDP of Benin Republic that Cameroon, another country that borders Nigeria, has joined in the illicit trade.
The Cameroonian government last year slashed its tariff on rice to zero per cent. Rice imported to Cameroon is smuggled into Nigeria through Cross River and Akwa Ibom States.
Another trick employed by the smugglers in the past was to use Apapa port and claim the rice was transshipment meant for Niger Republic. Once cleared with a lower duty, the consignment was diverted to a local market instead of armed Customs officials escorting it across the border.
Since last year, the rice mafia and their collaborators in the Customs have mobilised lobby groups with fierce media campaign to sway the Presidency into reversing the new tariff.
The Customs Service says it is losing huge revenues because rice ships are running away from the ports. Adesina retorts that rice merchants will stop smuggling the day Customs officials shun corruption, especially at the land borders.
He faults the Customs’ emphasis on revenue loss, saying the focus should be on the “real intentions of the policy, which is to promote growth, create job opportunities and reduce poverty.”
