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The Federal Government pledged policy intervention on Monday to rescue Nigeria’s rice processing industry after smuggled imports forced approximately 90 mills to shut down and pushed the remaining facilities to operate at a fraction of their capacity, a crisis that threatens over 100,000 direct jobs and the livelihoods of more than 10 million farmers across the agriculture value chain.
Minister of State for Industry, Trade and Investment John Owan Enoh convened an emergency meeting in Abuja with the Rice Processors Association of Nigeria to assess the scale of the collapse and map out a government response. Enoh said rice remains a strategic commodity due to its high consumption across Nigeria, making it essential for government policies to support sustainable production, processing, and stable supply. He warned that growing volumes of cheaper smuggled rice were undermining local investment and production. “When smuggled rice is sold at prices far below locally processed rice, it threatens domestic production. Government will take necessary policy actions to protect local industry,” he said.
RIPAN Director-General Andy Ekwelem told the meeting the damage was already severe. Smuggled rice was entering Nigerian markets at prices domestic millers could not match, because the contraband carried no import duties or levies.
“Smuggled rice enters the Nigerian market at prices that local producers simply cannot compete with. This has forced many rice mills to shut down, while the remaining mills are operating at only 30 to 70 per cent of capacity,” Ekwelem said. Nigeria currently has approximately 260 rice mills, with the highest concentration located in Kano, Kaduna, and Ebonyi states, where rice production and processing activities are most significant. The closure of 90 facilities represents roughly one-third of that total capacity eliminated in a single wave of competitive pressure.
Enoh said the engagement followed the recent unveiling of Nigeria’s industrial policy aimed at boosting value addition and strengthening the manufacturing sector’s contribution to the national economy. He added that the goal was to ensure both affordability of rice for consumers and adequate protection for domestic producers who had invested significantly in local production. He urged RIPAN and other industry stakeholders to provide credible, current data to enable the government to design targeted policies, emphasizing that transparent sector data was a prerequisite for effective intervention and that responsible industry conduct would determine how seriously government would treat the sector’s advocacy.
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The primary smuggling corridor runs between Cotonou in Benin Republic and Lagos, a few hours’ drive across Nigeria’s southwestern border. Nigeria’s official import duty structure imposes a 10 percent import duty and a 50 percent levy on foreign rice — a combined charge of 60 percent designed to protect domestic producers.
Smuggled rice bypasses these charges entirely, entering markets with no tariffs or duties, and is therefore significantly cheaper than domestically grown and milled rice. The general manager of Labana Rice Mill in Kebbi State, one of the country’s largest, said that for every 50kg bag of rice, millers were losing between N15,000 and N20,000 because paddy procurement costs had remained high while selling prices collapsed under the weight of smuggled competition.
“The worse is the fact that the rice mills are not selling because Nigerians prefer foreign rice, not knowing that most of the smuggled rice is expired but re-bagged for that purpose,” he said.
The structural vulnerabilities compounding the smuggling crisis include chronic electricity shortfalls that force mills to run on diesel generators at enormous cost, rising paddy prices driven by insecurity in farming communities across the North-West and North-East, and weak road infrastructure that inflates logistics costs between paddy production zones and processing facilities. An agricultural economist, Mamun Mallam, said Nigeria’s paddy production could fall to 4 million metric tonnes in 2026 from 10 million metric tonnes in 2018 if insecurity, flood disasters, and lack of farmer incentives continue unchecked. The combination of rising production costs and collapsing market prices had squeezed margins to the point where shutting down became more rational than continuing to operate at a loss.
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Nigeria’s rice self-sufficiency ambition has a long and turbulent policy history. The country banned rice importation through land borders in 2011, tightened restrictions in 2015, and in August 2019 closed all land borders in what President Muhammadu Buhari’s administration described as a decisive anti-smuggling move that immediately revived mill activity to near-100 percent capacity within weeks. When borders were reopened in 2022, smuggling resumed almost immediately. Official rice imports for the 2024/25 market year were estimated at 2.4 million metric tonnes — a 60 percent increase over the prior year’s projection — following a federal government waiver on import duties for essential food commodities between July and December 2024 intended to reduce consumer prices during a period of acute inflation. Industry leaders described that waiver, while offering short-term consumer relief, as having delivered a severe blow to a domestic rice sector that had spent years building competitive capacity under protection.
Enoh expressed optimism that stronger collaboration between government and industry stakeholders would help expand rice processing capacity, encourage investments, and improve value addition within the sector. He confirmed the government would also engage rice farmers through collaboration with the Federal Ministry of Agriculture to address production challenges affecting the supply of paddy to processors. No specific policy instruments — whether border enforcement operations, import duty adjustments, processor financing facilities, or paddy price support schemes — were announced at the conclusion of Monday’s meeting.
A further engagement with stakeholders was expected, with RIPAN asked to submit a comprehensive industry data package before any policy announcement could be made.
