Smuggled Rice Floods Nigerian Markets, Drives Prices to N58,000 Per 50kg

The price of a 50kg bag of rice has tumbled to as low as N58,000 in parts of Nigeria, especially in border communities, following an influx of smuggled rice from the Republic of Benin.

A new report by S&P Global has confirmed that Nigeria’s staple food market has seen one of its sharpest price declines in recent years, even as regional warehouses overflow with supplies of Indian parboiled rice.

According to the report, the West African parboiled rice market has slumped to a near two-year low, triggered by India’s removal of export duties on parboiled rice, which led to a surge in exports to the region. Benin Republic, Nigeria’s neighbor and a traditional transit point for rice, has been a major beneficiary, with its warehouses filled to capacity, according to traders and participants cited by Platts, a unit of S&P Global Commodity Insights.

Between September and December 2024 alone, India exported about 2.11 million metric tonnes of parboiled rice to West Africa, up dramatically from 720,000 metric tons in the same period of 2023. Full-year figures show that India shipped 5.35 million metric tons of parboiled rice to West Africa in 2024, compared to 3.9 million metric tons the previous year, data from the Agricultural and Processed Food Products Export Development Authority (APEDA) indicated.

This surge has directly impacted Nigeria. Although rice imports are officially banned, the country remains the largest consumer of rice entering the Benin Republic, with much of it finding its way across the porous borders through smuggling networks. As a result, the price of a 50kg bag of local rice in Nigeria, previously ranging between N80,000 and N90,000, has fallen sharply to about N60,000. Imported Indian rice, meanwhile, is now being sold for as low as N80,000.

In some border towns in Ogun State, where proximity to Benin facilitates easier movement of goods, prices have fallen even further, with 50kg bags selling below N50,000.

However, despite the price crash, traders report that demand has not risen proportionally. Buyers are hesitant, preferring to wait for further price stabilization amid expectations that costs could decline even more.

“Despite the price decline, demand has not risen correspondingly. With prices continuing to slide daily, buyers are adopting a cautious approach, waiting for stabilization before making purchases,” S&P Global quoted one trader as saying.

The situation has supported calls by many economists and trade experts, urging the federal government to reconsider the ban on rice imports as a means of tackling soaring food inflation. They argue that the persistent smuggling of rice through the Benin Republic only highlights the inefficacy of the ban, while consumers continue to suffer from high prices in the official market.

Economists say lifting the import ban would not only crash prices further but also help tame inflation, which has eroded purchasing power across the country. They also argue that regulated imports could generate revenue through proper customs duties rather than fueling a black-market economy that benefits smugglers.

Nigeria is currently the largest producer of rice in Africa. Yet, despite significant efforts to boost local production through initiatives like the Anchor Borrowers’ Programme and several interventions in mechanized farming, local supply still falls short of national demand. Nigeria’s annual rice consumption stands at about 6.7 million metric tons, but local production is estimated to cover only about 57 percent of that demand, leaving a significant deficit that has traditionally been met through imports — legal or otherwise.

The gap between production and demand means that even at maximum output, Nigeria struggles to feed itself with locally grown rice. While policymakers have long championed self-sufficiency as the goal, experts argue that a mixed approach — strengthening local production while allowing strategic imports — would better serve consumers in the short to medium term.

Historical Context of Nigeria’s Rice Import Ban

Nigeria’s ban on rice imports dates back to a series of measures introduced by the federal government under former President Muhammadu Buhari beginning in 2015. The administration had sought to boost local production, conserve foreign exchange reserves, and achieve food security by heavily discouraging the importation of goods that could be produced locally.

Rice, being one of Nigeria’s most consumed staples, became a key focus of this policy. In 2015, the Central Bank of Nigeria placed rice on the list of 41 items ineligible for foreign exchange at the official market, effectively making it more expensive to import. Later, the land borders were officially closed to rice imports in 2019 in an even stricter bid to curb smuggling and protect local farmers.

The government argued that restricting rice imports would create incentives for domestic farmers and millers, drive agricultural investment, and reduce the country’s dependence on food imports. Programs such as the Anchor Borrowers’ Programme, launched by the Central Bank of Nigeria, provided loans to rice farmers to stimulate production.

However, while the policy achieved significant growth in local rice farming, it also led to unintended consequences. Production could not keep pace with surging demand, resulting in scarcity and sharp increases in local rice prices. This gave rise to a thriving smuggling economy, particularly through Nigeria’s border with the Benin Republic, where imported rice flows into the Nigerian market unchecked.

Despite increased surveillance and border patrols, the vast network of unofficial entry points along Nigeria’s land borders has made enforcement extremely difficult. The Nigerian Customs Service continues to struggle against well-organized smuggling syndicates, a development widely attributed to corruption within the institution.