LAGOS (Reuters) - Nigeria has suspended custom duties on rice for the next six months to boost massive importation by the private sector to curb spiralling prices, its farm minister said on Wednesday.
The lifting of import tariffs came barely a week after a top official said the government planned to spend 80 billion naira ($678 million) on 500,000 tonnes of rice between May and July to force down rising food prices that have fuelled inflation in Africa's top oil producer.
But Agriculture Minister Abba Sayyadi Ruma said a cabinet meeting in the capital Abuja decided the import would be left to the private sector, while the 80 billion Naira should be used to raise local production of food crops and develop agro-based industries over the next three years.
The cabinet approved "the suspension of all levies and duties on rice imports for a period of six months ending on Oct. 31, 2008", the minister said in a statement.
Customs duty on rice imports is now 50 percent and there is a 5 percent levy to expand local production.
"The Federal Government has already secured the commitment of three of the world's major rice producing countries to guarantee the availability of rice to Nigerian commercial importers," the statement said.
Another 10 billion naira from the rice levy account would be disbursed as loans to domestic rice processors at a 4 percent interest rate with a repayment period of 15 years and a five-year moratorium, the statement said.
The price of rice, a staple in Africa's most populous nation of 140 million people, has climbed dramatically in the last four months, doubling for some varieties, lifted by soaring world prices for foodstuffs and fuel.
The statement said the cabinet meeting also approved the speedily completion of food storage projects to double Nigeria's food reserves to 600,000 tonnes by year-end.
Nigeria, once one of the world's biggest importers of parboiled rice, mainly from Thailand and India, had previously said it had cut imports to half a million tonnes thanks to a significant increase in local output in the past three years.
The government had said it was considering an outright ban on imports due to the success of an ambitious programme launched in 2003 to expand domestic rice production to 6 million toones by the end of 2007.
But the Rice Farmers Association of Nigeria, the main growers group, said Nigeria fell 800,000 tonnes short of its 5 million tonnes target for 2006 due to inconsistency in government policies.
