Few powerful foreign rice importers in Liberia with the aid of officials have earned huge fortune in decades via a scheme that beats away competitors mainly Liberians leaving them as the sole lords in a multimillion-dollar market.
Rice is Liberia staple food. About 300,000 metric tons or 12,000,000 (twelve million) bags are consumed yearly, according to the Ministry of Commerce and Industry. This means if a bag is sold at the minimum price of $20 United States dollars, the cartel (a group of four foreign importers) will be reaping a massive $240,000,000 (two hundred and forty million United States dollars in 12 months.
The cartel’s flourishing state is credited to a system wherein these Lebanese merchants control all warehousing facilities at the Free Port of Monrovia through lease agreements with port officials. Why? Owning a warehouse is a precondition for obtaining a rice importation license or Import Permit Declaration (IPD) from the Ministry of Commerce.
Once the warehouses are captured, no importer will be allowed in the rice market, hence the oligopoly.
An oligopoly is a structure wherein a market or industry is dominated by a small number of large sellers or producers resulting from various forms of collusion that reduce competition and impose higher prices.
New Democrat understands a certain individual in the erstwhile Johnson Sirleaf administration was receiving one United States dollars on every bag of rice imported into the country. It is not clear who in the Weah’s government is benefiting from such deal.
Breaking the cartel
Commerce and Industry Minister Wilson Tarpeh told New Democrat the George Weah administration is working to eliminate the practice. New warehousing lease agreements with the National Port Authority will not permit complete takeover by a select group of people, according to Tarpeh.
“The structure is wired against Liberians,” he said.
“To unwire that, you have to go to where the major problem is and the major problem is the warehousing and the financing. On the issue of the financing we have tried to have a loan program to assist them [Liberians].
He explained ‘When we took over the importation of rice was limited to effectively four companies and we decided as a government to open the market up just as we did with frozen food and other markets.
‘We [Liberians] consume on an annual basis 240, 000 metric tons to 300,000mt. That’s anywhere between 9,600,000 bags of rice to 12,000,000 bags a year.
‘Bringing the rice is not as simple as it should be. You must have the financing and the warehouse. The warehousing structure is usually at the port. Almost all the warehousing at the port are own by non-Liberians.
‘What we are doing now is to work with the National Port Authority to restructure the entire warehousing arrangement. Meaning that warehousing must now be available or enter a specific arrangement where when a Liberian brings in rice he/she can have a warehouse.’
The National Port Authority (NPA) established in the 1970s after the Americans built and surrendered the facility controls a multi million dollar landed properties occupying an estimated 100 acres.
Writes Festus Poquie