Nigerian customs has removed rice from the import restriction list and re-introduced import duty payments at land borders.
This move counters what the central bank initially wanted to do by implementing the restriction list to begin with, according to Luya Obiajuru, Strategy Manager at Novus Agro, the country wasn’t ready for such stringent restrictions.
"The country is actually not ready to take up the effects of a stopping importation, especially with regards to rice, the country currently produces less than a million metric tonnes and we consume up to five million metric tonnes,” said Obiajuru.
She explains how that gap is not ready to be filled yet and that they expected inflation but that didn’t happen because of smuggling in rice.
“You even have some prices lower than they were before the forex ban on those commodities happened,” she said.
[FOR MORE READ: Has Nigeria's ban on rice imports worked? - CNBC Africa]
The restriction list impacted the market negatively and and created a loss so Obiajuru thinks that may be a contributing factor to removing rice from the lsit.
"By mid-August you had the maritime industry already crying out to say, we are losing up 20 billion Naira on this already, instead of us having them [rice] come in the right way and pay the duties, they are being smuggled in so we are losing out anyways,” she said.
Obiajuru explains how the Brazilian exporters had a while ago requested that rice be excluded from the list so the outcry had been going on for the past few months – especially with regards to rice, she thinks this is the government’s way of trying to somewhat mitigate the effects.
Basically Obiajuru thinks Nigeria needs to wait and see what comes in light of the ministerial nominees going through their screening process there will be some changes.
“Let’s see how fast they jump in, let’s see how policies are re-enacted or being pushed forward to actually increase production.”
This is not to say that Nigerians don’t produce rice but she explains that they don’t produce the long grain variety which is the preferred type, which is like the imported rice.
They hoped Nigerians would switch to local variety substitutes during the scarcity but that’s not happening because the imported rice is still being smuggled into the market, says Obiajuru.
Obiajuru says rice has been attracting investment, for example some Brazilian investors were trying to come into the country by appealing to their love for quality rice, they were going to import their rice first before investing in Nigeria’s local production – the ban had prevented that.
“So for pretty much everyone – this lift on the ban would help cushion the effect that had been felt,” she said.