The fuel subsidy scam probably broke the ceiling in a room crammed with some of the worst corporate perfidy. Nothing could more sabotage the economic interest of a nation, many Nigerians thought.

But then came the rice import quota scheme, an unholy romance between politicians and businessmen, at the moment stretching corporate bad practices in Nigeria to an incredulous length.

About N117 Billion is there for the pick. A total of 26 companies are involved; two of which are owned by a former Attorney General of the Federation and a former civilian governor of Kebbi State respectively. Predictably, in the all-too-familiar Nigerian fashion, not all of the 26 companies selected for the scheme made the list on merit.

The Central Bank of Nigeria (CBN) in 2014 disclosed that Nigeria spent an average of N800 Billion annually on the importation of rice. Unofficial import receipts through the Cotonou corridor was not captured in the CBN figure.

But the business of importing rice, a staple in Africa’s most popular nation, is so huge and attractive that four neighbouring countries of Benin, Togo, Cameroon and even landlocked Niger Republic have technically factored transhipment or smuggling of rice and allied commodities into Nigeria in their national economic plan.

A recent figure from the CBN indicated that Benin Republic imports almost as much rice as China and nearly as much frozen chicken as the UK. Most of the commodities are smuggled into Nigeria.

Disturbed by the nation’s huge import bill, the President 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 at10 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 subsidy aimed at building local capacity in rice production.

Subsequently, an inter-ministerial committee was set up to work out the national rice supply gap and allocate import licenses with appropriate quotas in order to bridge this gap, 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 criteria included a Domestic Rice Production Plan (DRPP) that demonstrate evidence of current or planned investment in domestic rice production over a three-year period. The DRPP was also expected to show the size of investment, proof of land acquisition and establishment of rice fields and paddy production.

The second criterion was called paddy purchase outlook from Paddy Aggregation Centres (PAC). This should demonstrate a clear plan of purchase of paddy from PACs, location of the PACs and volumes of paddy to be purchased.

The third criterion was paddy purchase outlook from outgrower farmers and farmer cooperatives. This should include location of farms, volumes of paddy to be purchased, etc.

The last criterion was proof of ownership of integrated rice milling facility with par boilers and dehuskers. This should include size of planned installed capacity and evidence of acquisition of integrated rice milling equipment.

Sources within the Ministry of Industry, Trade and Investment told this reporter that the then Minister of Agriculture, Dr. Akinwunmi Adesina, by-passed the inter-ministerial committee in the selection of beneficiaries and commensurate import quota. Mr. Akinwunmi, now President of the African Development Bank (ADB), was Chairman of the inter-ministerial committee and took key decisions as the arrowhead of President Jonathan’s much-vaunted Agriculture Transformation Agenda.

Mr. Akinwunmi was easily outwitted by merchants and politicians who did not want a change in status quo, and were known to have resisted such in the past, industry insiders said.

Although the turf is different, the strategy is the same. The same way Nigeria’s oil refineries were put in comatose to pave way for massive and lucrative import of refined petroleum products, the same way entrenched interests known in the industry as Rice Mafia, are sabotaging local rice production to sustain the rice import business.

In the final analysis, the rice policy was scuttled to serve everything but national interest. Companies who have no investment in the rice value chain were granted quota. These companies in turn sold the quota to other importers who already had vessels on the sea.

The sellers of quota made huge profits without any investments in Nigeria’s local rice production and indeed did so without taking risk or lifting a finger.

The same sellers have been working hard to get more quotas in the bid to get more money from the scheme without any investments, thus holding the domestic rice policy to ransom.

Investigations by PREMIUM TIMES revealed 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.

Investigations revealed 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 Kebi State governor Adamu Aliero while Keresuk is owned by one Rotimi Williams.

Investigations revealed that for instance, Umza Internationa 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.

Dangote and Golden Penny have no existing mills but got 115.204 MT and 91,887 MT respectively. 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.

Investigations further revealed that 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.

Wacot is in seeds business only while Labana has two mills in Kebbi State. 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.

Ebony Agro owned by Charles Ugwu made wrong investment decision. It built rice mill in a place where there is no paddy. The same wrong investment decision of building a mill where there is no paddy was also made by Tara Agro. 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. The religious organisation had applied for and was granted waiver by President Goodluck Jonathan to import the said metric tonnes of rice and 25,000 metric tonnes of cooking oil described in a letter from the Budget Office of the Federation as ‘donated foodstuff’.

One smoking gun on sale of import quota is found with Umza International Farm Ltd. Shipping documents obtained by this newspaper showed that shortly after the release of quota allocations and Umza was named one of the beneficiaries, a letter dated December 20, 2014 instructed Marietta Bolten (owners of a ship MV Marietta) to divert a cargo of rice originally meant for delivery at Cotonou Port to Lagos Port. The cargo in question was a 15,500 MT Thai Parboiled Rice 100PCT Sortexed of Thailand Origin. The letter reads in part: “The above cargo was shipped on the above vessel … for delivery at the port of Cotonou – Benin but we, Navision Shipping A/S, hereby request you to order the vessel to proceed to and deliver the said cargo at Port Lagos – Nigeria to Pearl Universal Impex Ltd, 7A Asa Afariogun Street, Off Osolo Way, Ajao Estate, Isolo, Lagos, Nigeria.

The same Navision Shipping on the same day gave two more instructions to Marietta ordering it to divert another cargo of 3900.650 MT Thai Parboiled rice to Port Harcourt for Pearl Universal Impex. This second cargo, originally meant for Cotonou Port was originally consigned to STE Premiere Sarl, Niamey, Niger Republic. The third cargo, 18,500MT Thai Parboiled rice, originally destined for Cotonou Port was diverted on instruction to Port Harcourt.

A visit to Pearl Universal Impex in Ajao Estate, Lagos, showed that the company is no more at No, 7A Asa Afariogun Street, the land address used for the shipping transaction. There was no forwarding address. Pearl Universal Impex is a major rice importer owned by a group of foreign businessmen that include the Chairman Pulkit Jain, Nimit Jain, Pranshu Goel and Ramanathan Srinivasan. Pulkit Jain was quoted in a recent media report that his company “has been a major importer of rice in the country with imports of 350,000 metric tonnes of rice annually in the past”

Given that Nigeria is the only country that consumes parboiled rice, any cargo of parboiled rice going to Cotonou is in the first place is meant to come into Nigeria through land borders.

All the cargoes diverted belonged to Umza International Farm Ltd, one of the companies that benefitted from government subsidy.

Shipping documents show that diverted rice cargoes with the following bill of lading: MRT1409-01(10,000 MT), MRT1409-03(1,000 MT), MRT1409-04(1,000 MT), MRT1409-05(1,000 MT), MRT1409-09(1494.650 MT) and MRT1409-20(806.000MT) were consigned to Umza International Farm.

Yet another document showed that Umza International Farm Ltd has been importing rice from Thailand purportedly to be transhipped to Niger Republic. In October 2014 Umza, using the same ship MV Marietta imported 1,000 MT of Golden Standard brand of parboiled rice to Cotonou for ‘transit to Niger’. The Umza cargo has bill of lading MRT1409-03.

The same 1000 MT of same bill of lading MRT1409-03 is named in the instruction letter to the ship owners Marietta Bolten on 20th December 2014 to be diverted to Port Harcourt shortly after Umza was named as a beneficiary of Federal Government rice import quota. So also was another cargo of bill of lading MRT1409-04 with Niger Republic as its original destination.

Industry stakeholders are confused as to how consignments of parboiled rice are transhipped to a country that does not consume parboiled rice. Maritime experts say this is another red flag of irregularities and sabotage of the rice value chain adding that parboiled rice is not the only item ‘officially smuggled into Nigeria’ in the guise the goods were meant for Niger Republic.

http://www.premiumtimesng.com/news/headlines/195509-investigation-inside-the-massive-fraud-in-nigerias-n117billion-rice-import-quota-scheme.html

It seems every aspect of our economic sector is riddled with massive corruption...

Buhari has one point agenda.

Nigeria the hub of corruption

T

[size=18pt]All these loot in billions. How would the country survive.


Go will judge Okonjo sanusi, emefele Jonathan.


What sort of useless animals are these. [/size]

Agriculture and rice production? One area the last administration has been bragging about?

Hmmm, na wa.

coldsummer:
[size=18pt]All these loot in billions. How would the country survive.


Go will judge Okonjo sanusi, emefele Jonathan.


What sort of useless animals are these. [/size]

Another media circus!
I hope PMB admin goes past this stage as st yesterdays time.

I think every sector should be probed albeit slowly

Oh what a shame!

The scams are rolling in one after the other. To think that Madam Coordinating Minister of the Economy was being paid in $$$ makes it even more shameful.

Good job Premium Times......

THEY SHOULD INVESTIGATE ALL THE MINISTRIES

GEJ ineptitude government practically brought this nation to its knees...and we are still struggling to get up.

May God help PMB.

jonathan is a thief.

K.

coldsummer:
[size=18pt]All these loot in billions. How would the country survive.
Go will judge Okonjo sanusi, emefele Jonathan.
What sort of useless animals are these. [/size]

okeyglm:
jonathan is a thief.

Ijaya123:
GEJ ineptitude government practically brought this nation to its knees...and we are still struggling to get up.
May God help PMB.

aieromon:
Oh what a shame!
The scams are rolling in one after the other. To think that Madam Coordinating Minister of the Economy was being paid in $$$ makes it even more shameful.
Good job Premium Times......

9jatriot:
Agriculture and rise production? One area the last administration has been bragging about?
Hmmm, na wa.

CaliOsi:
Thank God the Otuoke man is gone (didn't mention anybody's name o). The thieves named here would be taught a bitter lesson soon, i trust my able presido.

IDIOTS!!!

Did you guys read the article?

Sources within the Ministry of Industry, Trade and Investment told this reporter that the then Minister of Agriculture, Dr. Akinwunmi Adesina, by-passed the inter-ministerial committee in the selection of beneficiaries and commensurate import quota. Mr. Akinwunmi, now President of the African Development Bank (ADB), was Chairman of the inter-ministerial committee and took key decisions as the arrowhead of President Jonathan’s much-vaunted Agriculture Transformation Agenda.

Mr. Akinwunmi was easily outwitted by merchants and politicians who did not want a change in status quo, and were known to have resisted such in the past, industry insiders said.

Although the turf is different, the strategy is the same. The same way Nigeria’s oil refineries were put in comatose to pave way for massive and lucrative import of refined petroleum products, the same way entrenched interests known in the industry as Rice Mafia, are sabotaging local rice production to sustain the rice import business.

In the final analysis, the rice policy was scuttled to serve everything but national interest. Companies who have no investment in the rice value chain were granted quota. These companies in turn sold the quota to other importers who already had vessels on the sea.

The sellers of quota made huge profits without any investments in Nigeria’s local rice production and indeed did so without taking risk or lifting a finger.

EKPA!!!

Was it GEJ that told the companies not to fulfill their end of the bargain? Is the PMB government not still maintaining the illicit rice quota 6 months into the government? Is it not the same thing that is happening with fuel subsidy? Did the PMB government not pay the fraudulent marketers N400b a few weeks back.

You guys are the evil in Nigeria. POT calling KETTLE black. HYPOCRITES!!!

-Lord

LordAdam:







IDIOTS!!!

Did you guys read the article?



EKPA!!!

Was it GEJ that told the companies not to fulfill their end of the bargain? Is the PMB government not still maintaining the illicit rice quota 6 months into the government? Is it not the same thing that is happening with fuel subsidy? Did the PMB government not pay the fraudulent marketers N400b a few weeks back.

You guys are the evil in Nigeria. POT calling KETTLE black. HYPOCRITES!!!

-Lord

The problem is some of these comments just don't want to see beyond the smear media campaign.
It is like they find it easier to deal with character assassination than to put to work a viewable solution to issues!
All I can see in the opening post is nothing but media blackmail.

baralatie:

The problem is some of these comments just don't want to see beyond the smear media campaign.
It is like they find it easier to deal with character assassination than to put to work a viewable solution to issues!
All I can see in the opening post is nothing but media blackmail.

You are quick to term it"media black mail"because it didn't suit your agenda or some of the names you were expecting to be there weren't included.

Shut up if you don't have any reasonable thing to type.

themilanway:


You are quick to term it"media black mail"because it didn't suit your agenda or some of the names you were expecting to be there weren't included.

Shut up if you don't have any reasonable thing to type.

What agenda are you talking about here?
A "media circus" leading to nowhere!!
A character assassination which of people and govt with nothing other than "classic media show for people to waggle their eyes about!!
I am still sticking to this statement" as long as these chanters continue to distract PMB,he will not achieve much unless he ignores all this media circus!

themilanway:


You are quick to term it"media black mail"because it didn't suit your agenda or some of the names you were expecting to be there weren't included.

Shut up if you don't have any reasonable thing to type.

Is it not media blackmail?

Did you not notice how the electronically controlled zombies jumped on the thread to scream anti-GEJ sentiments, without reading the article, like he was the one that managed the companies or oversaw the selection process?

It was an okay writeup but the intent was wrong especially when you look at the title. Why did the writer not say "Rice Mafia orchestrate massive fraud in Nigeria N117b rice import quota scheme"? Rather than use "massive fraud" to suggest that the whole scheme was ridden with fraud whereas only the marketers and their cronies defrauded Nigerians.

GEJ did his job of formulating good policies. The Minister of Agriculture did his best to ensure the policies were enforced. And saboteurs in the ministry that are still employed in the ministry under PMB's government today sabotaged the policy. These same people will likely sabotage PMB's policies too, like is evident with the fuel subsidy scandal.

As long as people like you and those I quoted earlier on continue to reason like jelly fishes, nothing meaningful will happen in Nigeria.

-Lord

CaliOsi:
Thank God the Otuoke man is gone (didn't mention anybody's name o). The thieves named here would be taught a bitter lesson soon, i trust my able presido.

this is not the fault of Jonathan...the guy didn't really understand the corruption in Nigeria.

The only thing I hated abt him is his deaf ears and inaction towards glaring corruption cases. The policies were good, but he didn't follow up a bit...

May God grant buhari the power to kill the bastards

SLIDEwaxie:
this is not the fault of Jonathan...the guy didn't really understand the corruption in Nigeria.

The only thing I hated abt him is his deaf ears and inaction towards glaring corruption cases. The policies were good, but he didn't follow up a bit...

May God grant buhari the power to kill the bastards

Follow up a bit?

Is he the one to follow up? The EFCC and ICPC, are they not independent bodies? What about the regulatory agencies? Is he also the person heading all of them? Why did their respective heads not ensure that the policies were enforced and fraud were eliminated. Was it GEJ that informed them to let corruption thrive?

I remember the Odua scandal and how the woman was protected by GEJ, so I'm not saying GEJ was perfect. But PMB is no different. Why is everybody silent about the role of Sanusi and Emefiele in Dasukigate? Or that Femi Adesina as Editor received money (although it has now been returned)? Why are they not still lambasted if they are not protected by PMB.

As I said, the status quo remains. After Buharigate, the mills of Dasukigate has gone worringly silent. When you point a finger at someone, four figures are pointing back at you.

-Lord

lalasticala come and see anothrr fraud package and delivered by the gej regime.

When we tell wailers they worship a criminal as hero they say he is the best thing that happened to them.

baralatie:

The problem is some of these comments just don't want to see beyond the smear media campaign.
It is like they find it easier to deal with character assassination than to put to work a viewable solution to issues!
All I can see in the opening post is nothing but media blackmail.

No, the problem is that import substitution schemes are not good policy, even if they look good to laymen without economic literacy. Putting aside the fact that even a corruption-free scheme would still hurt consumers more than it would benefit rice growers, any time politicians are given an opportunity to tamper with trade, they are also provided with a new means to enrich themselves through corrupt practices. Under a free-trade regime, there would be no room for subsidies, import licenses and other such invitations to corruption.

The strange thing about political interference with markets in Nigeria is that the Nigerian masses never learn that these interventions are never to their benefit. One would think most Nigerians would be aware by now that the only parts of the economy that work properly are exactly those bits where the politicians have least influence.

vedaxcool:
lalasticala come and see anothrr fraud package and delivered by the gej regime.

When we tell wailers they worship a criminal as hero they say he is the best thing that happened to them.

Another IDIOT spotted. Did you read the article?

Read my earlier reply. https://www.nairaland.com/2815372/massive-fraud-nigeria-n117billion-rice#41212484.

NONSENSE!!!

-Lord

OMG!! Not again!!

So besides Ashi Radio which former state governor of Benue owns, a radio station that was build with everything meant for the State owned radio station (Radio Benue) there's also Ashi foods!! What a fraudster!

And Aondokaa also features prominently in here. I don't know about "Mikap Rice" as reported here, but I know he owns "Miva Rice" and they have their mill close to the BBL along Gboko road.

Indeed, Magu has his job cut out for him.

One simply can't believe how the brains of some PDP supporters function- it defies natural order seriously. How could one bring themselves to think this is a "witch hunt" or "media whatever" after such a painstaking investigation which deserves nothing but accolades??

These guys bear the brunt of the malfeasance of those criminals yet they simply can't stand seeing them held to account.

This is indeed an acute case of mass Stockholm Syndrome.

omohayek:


No, the problem is that import substitution schemes are not good policy, even if they look good to laymen without economic literacy. Putting aside the fact that even a corruption-free scheme would still hurt consumers more than it would benefit rice growers, any time politicians are given an opportunity to tamper with trade, they are also provided with a new means to enrich themselves through corrupt practices. Under a free-trade regime, there would be no room for subsidies, import licenses and other such invitations to corruption.

The strange thing about political interference with markets in Nigeria is that the Nigerian masses never learn that these interventions are never to their benefit. One would think most Nigerians would be aware by now that the only parts of the economy that work properly are exactly those bits where the politicians have least influence.

With all due respect, it is a good policy. In saner climes, fraud still occurs but on a very reduced scale.

Maybe you did not understand the policy. But the government sought to favor those that invest in local rice production with reduced import duty to encourage them to build Nigeria's rice production capacity, while those that did not invest got high import duty to discourage them from importing without investing in local rice production. What would you rather the GEJ administration did?

-Lord

omohayek:


No, the problem is that import substitution schemes are not good policy, even if they look good to laymen without economic literacy. Putting aside the fact that even a corruption-free scheme would still hurt consumers more than it would benefit rice growers, any time politicians are given an opportunity to tamper with trade, they are also provided with a new means to enrich themselves through corrupt practices. Under a free-trade regime, there would be no room for subsidies, import licenses and other such invitations to corruption.

The strange thing about political interference with markets in Nigeria is that the Nigerian masses never learn that these interventions are never to their benefit. One would think most Nigerians would be aware by now that the only parts of the economy that work properly are exactly those bits where the politicians have least influence.

To understand the scheme!
I would ask you how did Nigeria solved its cement stock problems!

LordAdam:


With all due respect, it is a good policy. In saner climes, fraud still occurs but on a very reduced scale.

Maybe you did not understand the policy. But the government sought to favor those that invest in local rice production with reduced import duty to encourage them to build Nigeria's rice production capacity, while those that did not invest got high import duty to discourage them from importing without investing in local rice production. What would you rather the GEJ administration did?

-Lord

It is a terrible policy, as it attempts to give politicians the power to choose winners and losers, distorting market signals while providing opportunities for theft. Taken to its logical conclusion, policies that try to favor domestic producers over foreign ones lead to autarky, which is not working so well for the North Koreans last I heard.

A better policy (irrespective of administration) is to have a low and uniform tariff across all goods and services, without giving politicians any discretionary power whatsoever over who gets to sell what at which price, or any scope to provide subsidies of any sort.

This is just the reason Nigeria is not developing as Government does have good programmes but the implementation is always poor.

LordAdam:


I am Another IDIOT spotted. Did I read the article?

Read my earlier reply. https://www.nairaland.com/2815372/massive-fraud-nigeria-n117billion-rice#41212484.

I am a NONSENSE!!!

-Lord Morr.on

omohayek:


It is a terrible policy, as it attempts to give politicians the power to choose winners and losers, distorting market signals while providing opportunities for theft. Taken to its logical conclusion, policies that try to favor domestic producers over foreign ones lead to autarky, which is not working so well for the North Koreans last I heard.

A better policy (irrespective of administration) is to have a low and uniform tariff across all goods and services, without giving politicians any discretionary power whatsoever over who gets to sell what at which price, or any scope to provide subsidies of any sort.

This is like awarding contracts, unless you believe awarding contracts is a terrible policy too. The government has its terms, if the prospective contractor meets the terms, he or she gets the contracts.

You fail to see that a similar policy was enforced in the local auto industry and it has been working fine (pending any untoward revelations). In the auto industry, the import duty of used cars was increased to 70% and the import duty of imported new cars also got a raise. However, the importation of knocked parts was reduced to encourage car manufacturers to set-up assembly plants here.

Now we have Nissan, Hyundai and a host of others including Peugeot (that has been around) making giant strides. At the moment, tens of manufacturers including Toyota and Mercedes and registered interest in entering the Nigerian auto market.

Every nation enforces policies to discourage foreign imports for goods that can be produced in the country. Rice can be produced in Nigeria, but we are not self-sufficient now. There may be other policies that could be used to achieve the end-point of reduced rice import and increased domestic production, I am no economist, but do not suggest that the policy by the GEJ administration is even remotely terrible.

Your suggestion also has a loop hole. You cannot have a uniform tariff across all goods. It defies reason. Politicians will always have discretionary power, there is no way to avoid that. After all, it is the business men that fund the campaigns of the politicians, so the politicians have to return the favor when they get to power.

What Nigeria needs is accountability. The question is not that politicians awarded the quota to their businessmen friends, the problem is that they did so with total disregard of the rules they themselves had set. That is the fraud and a major accountability problem. If you make rules, then follow them.

-Lord