Nigeria’s rice hopes in tatters as imports atop global table

• Exposes failure of Buhari’s rice programme
• Self-sufficiency pyramid campaign a ruse
• High domestic prices make import attractive

Nigeria’s hopes of taking charge of adequately feeding itself with home grown rice are in tatters today according to new data estimating that Nigeria’s rice imports will be atop a global league table of importers in 2024.

Former Nigerian president, Muhammadu Buhari, in a move to showcase the significant achievements of the country’s journey towards rice self-sufficiency, unveiled 13 rice pyramids – each representing about 1.2 million bags of rice paddy – on January 18, 2022.

The rice pyramid exhibition garnered a lot of attention and excitement, especially among those who had been following the government’s efforts to boost domestic rice production. Many believed that the development would lead to self-sufficiency in rice production, which would in turn reduce the country’s reliance on imports and lower the price of rice for consumers.

Unfortunately, barely two years later, the price of rice has continued to hit the roof, going beyond the reach of the average Nigerian. In addition, recent reports suggest that Nigeria may become the largest importer of rice in 2024, rather than the largest exporter as initially hoped.

The Economic Research Service (ERS) of the U.S. Department of Agriculture (USDA), in a recent report, predicted that Nigeria will be the world’s top rice importer in 2024, with an estimated 2.1 million metric tonnes of imported rice. This projection is based on factors such as population growth, declining domestic rice production, and increasing per capita consumption of rice in Nigeria.

According to the ERS, Nigeria’s rice imports are projected to increase from 1.8 million metric tonnes in 2023 to 2.1 million metric tonnes in 2024.The ERS rice outlook report also indicates that global rice trade is expected to reach 52.85 million tonnes (milled basis) by 2024. Brazil and South Korea are expected to increase their exports, while Burkina Faso, Indonesia, and Nigeria are expected to increase their imports.

The report stated,’’Global rice trade in the calendar year 2024 is projected at 52.85 million tons (milled basis), up 345,000 tonnes from the previous forecast but 460,000 tonnes smaller than the year-earlier revised forecast of 53.3 million tonnes. Export forecasts for 2024 are raised for Brazil and South Korea, while import forecasts are raised for Burkina Faso, Indonesia, and Nigeria.”

The report goes on to explain that several countries are projected to have weaker crops in 2023/24, including Costa Rica, Ecuador, Mali, Nigeria, Turkey, and Uzbekistan. Some of the factors contributing to this include weather conditions, economic factors, and policy changes. For example, in Nigeria, production is expected to decline due to erratic rains and flooding in major rice-producing states. In Costa Rica, the weakening of the colón has made rice production less competitive. In Turkey, the drought-reduced irrigation water has limited yields. And in Uzbekistan, a transition from government-controlled planting to free-market planting.

The Economic Research Service (ERS) of the USDA forecasts that Nigeria’s rice production will decline by four percent in 2023/24, from the previous year’s level. This is largely due to erratic rains and flooding in Nigeria’s key rice-producing regions, particularly in the states of Kebbi, Kwara, Niger, and Sokoto. These weather-related issues have led to reduced yields and crop losses, with some areas experiencing a complete loss of crops.

According to the report, Nigeria is expected to be the world’s largest importer of rice in 2024, followed by Indonesia and Brazil. The previous forecast for Nigeria’s rice imports was raised by 100,000 metric tonnes in the latest report, compared to the forecast in October. This highlights the increasing demand for rice in Nigeria and the need for imports to meet this demand.

The report also showed that the Philippines, Thailand, and Malaysia are expected to be the top three exporters of rice in 2024. The Philippines is projected to export 2.5 million metric tonnes of rice.

The report cited two main reasons for the increased import forecast for Nigeria: First, high prices for domestic rice have made imported rice more attractive; and second, quality concerns have led consumers to prefer imported rice over domestic rice. These factors have contributed to a greater demand for imported rice in Nigeria, leading to the increased forecast.

It is worth noting that domestic rice production in Nigeria has been facing challenges, including inadequate infrastructure, limited access to finance, and inefficient farming practices. These factors have limited the growth of domestic rice production and contributed to the reliance on imports.

In an interesting policy turn, the Central Bank of Nigeria (CBN) lifted the restrictions it imposed on importers of rice and 42 other items in 2015. This move is expected to make it easier for importers to bring in rice and other items, potentially boosting imports and lowering prices for consumers.

The CBN’s restrictions on rice imports had been in place for eight years, in an effort to encourage domestic production and reduce the country’s dependence on imports. However, despite these efforts, Nigeria’s rice production has not kept pace with demand, leading to high prices and a reliance on imports.

The lifting of the foreign exchange restrictions on rice imports has led to different reactions from various stakeholders. On one hand, local farmers have expressed support for the move, as they believe it will allow them to increase their production and compete with imported rice.

However, some critics argue that the move will hurt the domestic rice industry and undermine efforts to make Nigeria self-sufficient in rice production. They also worry that lifting the restrictions will lead to an increase in food imports, which could have negative implications for the country’s balance of payments and economic growth. 

According to data from the Thai Rice Exporters Association (TREA), there was a significant decline in rice exports to Nigeria between January and July 2022, compared to the same period in 2021. This may be due to a combination of factors, including the foreign exchange restrictions and high prices. 

However, the decline in rice imports may also be due to the large amount of rice that is smuggled into the country. Smuggling has long been a challenge in Nigeria, with large quantities of goods, including rice, being smuggled across the country’s borders.

This illegal trade is difficult to track and estimate, but it is likely that a significant amount of rice is being smuggled into the country, rather than being imported officially. This may be one of the reasons why the official import figures show a decline, while rice consumption in Nigeria remains high. 

Kenny Adenugba, lead consultant at Quanto Fluence Nigeria Limited, a management consultancy services organisation, noted that  Nigeria’s rice production capacity has seen some positive results, but the progress has been slower than expected.

He also highlighted some of the other challenges facing the industry, including a lack of government investment in infrastructure and a lack of access to affordable credit for farmers. In addition, he emphasised the need for a coordinated approach to address these challenges and ensure that Nigeria can achieve self-sufficiency in rice production.

“It is very easy for us to talk about things on paper but when you go into the rice plantations, you would then know the challenges faced by the rice farmers such as bird predatory and pest challenge, insecurity, lack of modern farm implements and storage facilities,” he said.

According to the strategic management expert, for Nigeria to increase its rice production to meet local demand and compete with foreign producers, the government needs to focus on mechanisation and post-production processes.

“The government should focus more on farm mechanisation, improved processing, marketing techniques, pricing and reduce the tariff on importation of equipment,” he suggested.

Christopher Akinbile, professor of agricultural engineering at the Federal University of Technology, Akure (FUTA), called for the establishment  of a specialised rice institute in Nigeria as a strategy that would significantly boost rice production.

Akinbile opined that for Nigeria to become more than just Africa’s highest producer to becoming a major player in the global market, the government should create a specialised rice institute that will handle all research relating to rice production, from breeding through processing and post-harvest operations.

He added that such an institute should be empowered to provide relevant information and other technical support to rice farmers and other stakeholders in the value chain.

According to the agriculture expert, this approach has been successful in other countries, such as China and Vietnam, which have become major players in the global rice market.

Akinbile also advised that Nigeria should take a cue from successful organisations such as the International Rice Association Research Institute (IRRI) and the Philippines Rice Research Institute (PRRI) which hinged their domination of rice production on specialised rice institutes.

Akinbile also proposed the introduction of an agricultural insurance scheme to protect farmers from crop failure and loss. This, he noted, would encourage farmers to invest more in their rice production by providing a safety net in the event of unforeseen circumstances, such as climate change effects or natural disasters.

He explained further that such an insurance scheme could be structured in a way that would be accessible and affordable for smallholder farmers, who make up a large portion of Nigeria’s rice producers.