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20 hours ago, 41 tweets, 7 min read

INVESTIGATION: Inside d massive fraud in Nigeria’s N117Billion rice import quota scheme

Investigations by PREMIUM TIMES revealed that d 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 & industry.

Ashi Foods is owned by d 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,d 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 d 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 d said metric tonnes of rice & 25,000 metric tonnes of cooking oil described in a letter from d Budget Office of d 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 d release of quota allocations and Umza was named one of d 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 d 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, Pulkit Jain was quoted in a recent media report that his company “has been a major
importer of rice in d country with imports of 350,000 metric tonnes of rice annually in d past”

Given that Nigeria is d only country that consumes parboiled rice, any cargo of parboiled rice going to Cotonou is in d 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.

Phoney milling capacities

There are also discrepancies in milling capacities and d local rice production capacity. Under Minister Akinwunmi, the agric ministry claimed Nigeria was
producing 2.2 million MT of paddy.

However,investigations by this reporter revealed that all the rice mills in Nigeria have a combined annual capacity to mill only 600,000 MT of paddy. The question that naturally arises is: where are the remaining 1.6 million MT milled if indeed
domestic production was 2.2 million MT? Yet, allocations of rice import quota were based on these phoney capacities of rice millers and investors, many of whom at the end sold off their quotas to d detriment of the rice subsidy goals.

Investigations revealed that some of d rice
merchants that benefited from government subsidy through proxies are known for patronising the Cotonou Port.

The story of smuggling of rice & other items from Cotonou is almost hackneyed and indeed is d mainstay of that country’s economy. In 2013 the government of Benin Republic
slashed its tariff on rice the moment Nigeria hiked its to keep alive transhipment, which actually is a fancy name for smuggling. Cameroon joined the rice smuggling business into Nigeria by crashing its tariff to zero percent.

In April and May 2014 a frightening dimension was
recorded in the rice import business. Eleven ships, all carrying rice, sailed into Nigeria’s territorial waters but instead of berthing at Apapa Port, they all chose to stop nearby and wait. Their positions were so close they could be sighted from the Lagos Bar Beach. There were
no engine failures, no congestion at the destination port and no internal crisis in the host country to warrant the sudden refusals of the ship captains and crew to complete their journeys. The names of the ships were MV Hector, MV Star Capella, MV Wariya Naree, MV Aqua Runner,
MV Silvretta and MV Eternity. C. Others were MV Aeolos, MV Lake Hakone, MV Mraki, MV Atlantic Trade and MV Quest.

But why would 11 ships sail all the way from Thailand into Lagos but refuse to berth at the port? Port workers knowledgeable about official corruption proffered that
the ships were negotiating tariffs before they could enter Apapa.

In d complex & dodgy multi-billion dollars rice import racket that employs top figures in d Nigeria Customs Service, the Nigeria Navy, officials of the Ministry of Finance and the Nigerian Maritime Administration
and Safety Agency (NIMASA), calculations had suddenly gone wrong somewhere, hence the ships were told to halt sail. Had they sailed further into Apapa port, then the rice merchants must pay the 110 per cent tariff on rice import imposed early 2013 by the Federal Government to
discourage import dependency and support local production.

The 11 ships were expected to pay a total tariff of N16.5 billion to the Nigerian government. This, the rice mafia were determined to evade. Should negotiations fail to go their way in such a situation, the ships would
proceed to Cotonou from where the cargoes would one way or the other find their way into the Nigerian market.

A maritime security expert, Patrick Keku, asked the question: “Can a ship sail into Ghana, South Africa, USA, or even Benin Republic and that ship is allowed to loiter
around while it perfect ways of breaking the laws of the host country? It can only happen in Nigeria.”

Senate committee and conflict of interests

Like the fuel subsidy scam of 2012, the scale of economic sabotage arising from the sale of rice import quota is such that it has
attracted the attention of the National Assembly.

Stakeholders and ordinary Nigerians alike desirous of seeing the President Buhari administration transform the national economy using agriculture, must have expected to see another season of name and shame.

If the purpose of the
National Assembly inquiry was to ensure that, like in Brazil and Malaysia, agriculture was turned into a high revenue earner, confidence level soon dropped the moment the committees’ chairmen were named.

On Thursday, July 30, d Senate announced membership of the ad-hoc committee
on waivers, concessions & grants.

The committee’s mandate was populist: to investigate d indiscriminate use & abuse of waivers for rice importation. The committee was to carry out a holistic review to determine d full recovery of all government revenue related to the rice policy
But the inquiry was abinitio tainted with conflict of interest. The Chairman of the Senate Committee is Senator Muhammad Adamu Aliero, the former governor of Kebbi State who himself is the Chairman of Labana, one of the rice subsidy beneficiaries.

Where is journalism in Nigeria?




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