Rice Production in Nigeria Now Competitive


Thursday, December 31, 2020 / 10:45 AM / by CSL Research / Header Image Credit: Daiji World

According to news reports, Kebbi State Governor, Abubakar Bagudu, speaking during an interview on Wednesday gave a high rating to the quality of rice being produced in the country, noting that Nigeria is now competitive in the production of the commodity. He expressed optimism that the country has the prospect to dominate the rice market in West Africa and on the continent with the right investment in critical infrastructure and capital.


Nigeria with average local consumption of c.6.8million metric tonnes (MT) per annum versus average local production of 5.0 million MT was the second highest importer of rice. The Buhari administration had in 2016 set 2018 as a target period to end importation of rice and become self sufficient. Since 2011, the government has been making substantial efforts to encourage the domestic cultivation of rice and to completely eliminate imports using incentives such as subsidised loans, cheap fertilizers, free farm land, and, tax rebates. Other strategies to discourage imports were also put in place such as stopping rice importers from buying foreign exchange from the official market and raising tariffs to as high as 60%.


These restrictions led to a gradual decline in imports and resulted to an increase in the price of imported rice. Consequently, the price gap that made cheaper imported rice more attractive began to narrow. The most effective measure against rice imports however was the closure of the land borders in August 2019. Since Nigeria closed its land borders, the price of rice, a major staple in the country has been on the rise. The price of a 50kg bag of imported rice, which was selling at N14,500 before the closure of the border, now sells for c.N33,000 while locally produced rice have also seen an increase in price of between 25-50%.


Data from the U.S. Department of Agriculture (USDA) shows that milled rice production grew 11% in 2020 from 2019 while imports have been showing a steady decline but expected to rise in December possibly due to increased demand amid the Christmas festivities. Though production has improved and locally-grown rice is now widely available, however, supply still falls short of local demand. To dominate the rice market in Africa, stem the rising local production needs to be ramped up as fast as possible and quality still needs to improve.


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