(Business in Cameroon) - As part of the 2016 Finance bill currently under review at the Cameroonian parliament, the government is proposing that the tax on rice import be reinstated, after its removal in 2008. The decision was taken by order from the Head of State signed on 7 March 2008, following the “hunger riots” which occurred in February, and caused unrest in some of the big cities.

If this proposition from the government is endorsed by Parliament, starting from January 2016, all rice imports in Cameroon will again be subjected to a customs duty equivalent to 5% of the cargo's value.

The unveiling of this government proposal, which could be justified by the intention to put together a 2016 budget largely in increase compared to the 2015 budget (over FCfa 400 billion), raises the spectre of a price increase per kilogram of rice on the Cameroonian market.

Indeed, if the tax exemption on rice imports started in March 2008 made it possible to decrease the price for this foodstuff much appreciated in Cameroon, this decision from the Cameroonian government also contributed to the development of smuggling networks between Cameroon and Nigeria.

In 2014 for example, faced with the establishment of a tax of 110% on rice imports in Nigeria, a report from Seaport Terminal Operators Association of Nigeria (STOAN), which gathers port operators, revealed that "approximately 600,000 tons of rice have been rerouted towards neighbouring countries' ports such as Benin, Cameroon, Ghana and Togo". These cargo, the report stressed were then imported again into Nigeria through smuggling.

It is worth recalling that the national demand in rice in Cameroon is officially estimated at 300,000 tons. The national offer, supplied by SEMRY and the traditional producers from the North-Western and Western areas, barely peaks at 100,000 tons per year.

BRM