The Nigerian Government aims to
have 3 million hectares under rice cultivation by 2007. Nigeria
is the largest producer of rice in West Africa, but the country
with a population of 125 million people still relies on a massive
The production and consumption levels of rice in the sub
Saharan region remain to be substantial. The region is projected
to import 6.7 million tonnes in 2006, down 10% from the 2005 which
was a record performance. According to industry sources, the reduction
is because of increased rice production in the region at 8.53 million
tonnes (9% up on the previous year).
Apart from Nigeria and South Africa, the region
mainly imports low quality rice. Nigeria accounts for 20% of sub-Saharan
Africa’s rice imports. South Africa accounts for 11% of imports
into the region, mainly high-quality parboiled rice from India and
Thailand. Senegal also accounts for around 11% of imports, mainly
broken rice, with imports rising substantially after 1995, as consumption
growth has outpaced production
Ghana with 5% of the region’s imports is
increasing production by raising yields. Guinea and Mozambique have
similar levels of imports, while Madagascar imports 100,000 tonnes,
despite being the region’s second largest rice producer.
As far as Nigeria is concerned, rice consumption
has dramatically increased since the 1970s and creating a substantial
surge in rice imports since then, making rice a political commodity
in the country. On one side rice became a critical component
of the Nigerian diet and the other side, a major consumer of the
country’s foreign exchange. The Nigerian government imposed
a ban on rice imports in 1985 with the objective of increasing domestic
production in meeting the increasing demand for the product. However
in 1995 the import ban was removed as the local supplies, although
showing improvement, failed to meet the demand. The lifting of the
ban resulted in rapid increase in imports, inspite of repeated hikes
on duty levels. Nigeria has continued to be an attractive market
as compared to other West African markets as it imports parboiled
rice which of relatively higher value unlike other regional countries.
Rice Milling - Nigeria
Nigeria in the meanwhile is making visible
efforts under the government’s stated policies to increase
local production and eliminate need for imports in the medium term.
President Obasanjo is spearheading an aggressive pursuit for self
sufficiency that includes subsidy on basic farm inputs and improved
The government is promoting the adoption of the
new hybrid rice varieties to help boost rice production. These new
varieties are high yielding, early maturing, disease resistant,
and high in protein content. The government aims to have 3 million
hectares under rice cultivation by 2007. Nigeria is the largest
producer of rice in West Africa, but the country with an estimated
population of 125 million people still relies on a massive rice
The total domestic rice demand is estimated at
about 5 million metric tonnes. However it is anticipated that Nigeria
would continue to depend on imports for some time to come given
the fact that Nigeria imports a third of its total rice supplies.
Imported parboiled rice meets the consumer demand in urban areas
where incomes are higher. Locally milled rice is of poor quality
and is consumed mainly in the rural areas.
Government sources said recently that 6 million
tonnes of milled rice was to be produced from over 10 million tonnes
of paddy rice by 2005, while 3 million hectares were expected to
be put under cultivation in 2007 to produce 15 million tonnes of
paddy rice, resulting in 9 million tonnes of the milled product.
The government is also planning to procure rice milling machines
designated for rural areas and provide irrigation access to farmers
for rice cultivation.
Milling in Nigeria has witnessed a fairly
basic processing technology on the both the aspects of parboiling
and milling. Typical issues faced are lack of access to improved
technologies, high costs of energy for parboiling, lower output
quality (post processing), limited government incentives etc.
Other issues relate to irrigation systems, research
& development, pests and disease management, soil fertility
management, effective farm implements, access to institutional and
infrastructural support credit facilities, unorganized delivery
of inputs and sales & distribution channels.
However, opportunities exist in the rice milling
sector if there is an inclination to invest in better processing
technologies. The returns would be attractive given the large price
spread between clean imported rice and the lower quality local rice,
justifying investments into latest technologies on areas like destoning.
However the imported product supply/marketing chain is well established
unlike the local rice market structure which typically involves
many different agents across the production, processing and sales
functions. This area needs significant improvement to be able to
encourage more risk taking by large investors in the industry. Otherwise
this market structure would not be able to achieve the economies
of scale necessary to meet government objectives of self-sufficiency
Progress on Rice Milling Projects
The government is said to be discussing with a
Japanese company for the supply of rice milling machines to farmers
at an affordable price to improve rice processing.
Given the large demand-local supply gap, it is
likely that the government may issue more licenses to local rice
mills to import bran or paddy rice. Two such companies with annual
milling capacities of 120,000 tonnes of bran rice each have been
issued licenses and have already commenced production. Trade sources
forecast imports of bran rice in 2006 to be around 250,000 tonnes.
The importers of bran rice with licenses (renewable) are assessed
at a lower duty of 50%. Due to concerns on environmental effect,
the government decided against allowing import of paddy rice for
which the duty could have been as low as 20%
The industry is also witnessing major restructuring
by major importers to prepare for a possible government ban on rice
importation. Highly established industry heavy weights like the
Stallion group (Number One market leaders in rice with well established
branded products like Caprice) have already embarked on large scale
agriculture/ rice milling ventures throughout the country. It is
learnt that Stallion (owned by the Vaswani
Brothers Sunil Vaswani, Haresh Vaswani and Mahesh Vaswani) has
collaborated with world leaders in rice industry like Buhler to
make a major impact on local farming/rice milling in the coming
Given Stallion’s financial power
and well entrenched distribution system, Stallion’s entry
into Agriculture/rice milling might propel Nigeria to meeting local
production targets sooner than anticipated. This may also attract
other business houses jumping into the fray.
The ChurchGate group in Nigeria is also foraying
into rice milling and is reportedly setting up farms in five states
in the country in addition to their importation of rice from India
The government’s initiatives seem to be working
reasonably well in its hugely challenging task of minimizing dependence
on rice imports.