MONROVIA — Rice importers in Liberia are facing a serious threat after importing almost three vessels of rice based on a government commitment that the price would increase by $1.50 per bag. Contrary to this expectation, the price has instead decreased by $0.25 following the Indian government’s imposition of a 24% export tax on Indian parboiled rice, which is primarily consumed in Liberia.
Importers’ Predicament
Based on the government’s commitment, rice importers took the initiative and risked loading a large quantity of rice to Monrovia port. Despite this effort, the current stock is projected to last no more than two months, especially during the rainy season when consumption is higher and the offloading process is more challenging due to heavy rain. In these conditions, rice vessels can take almost two months to be offloaded.
Economic Impact
The existing rice importers have invested millions of dollars in building a modern storage facility at the Freeport of Monrovia and have employed thousands of Liberian nationals. Despite this, the government perceives that rice importers are making substantial profits. When a bag of rice lands in Liberia, it incurs a landing cost of around $17.75 but is sold for $16.75. Retailers, who purchase the rice for $16.75 per bag, sell it for $19-$20, making a profit of nearly $2 per bag without investing in infrastructure or employing personnel.
The government’s focus tends to be on the importers and investors who add value to the economy rather than on small retailers who benefit from this trade without contributing significantly to the Liberian economy. These retailers do not employ Liberian nationals, do not have registered businesses, and do not engage with the banking system. Importers, on the other hand, bear significant losses and face reputational damage. These retailers do not even contribute up to 5% to the Liberian economy, yet the government is not enforcing price control on them, rather on the importers.
Regional Comparison
In neighboring ECOWAS countries such as Sierra Leone, Guinea, and Ivory Coast, the price of Indian parboiled rice is around $20 per bag, and the market is open to all. Liberia is unique in its continuous criticism of foreign investment, unlike other West African nations that support and encourage foreign investment to enhance their economies.
Call to Action
Given that nearly 70% of the Liberian population is unemployed and facing severe poverty, the government should engage with the rice importers who have contributed to this sector for more than 17 years. These importers have made substantial investments to ensure food security. The government should consider providing farmland for rice cultivation in parallel with imports, offering support to create additional employment, and ensuring food security for future generations through modern farming skills.
Instead of focusing solely on importers, the government should address the main problem: local retailers who are benefiting without contributing. Importers have unofficially informed the government that they will halt importation until a decision is made to increase prices and mitigate their losses.
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