The partial closure of Nigeria’s land borders with its western neighbours has exposed the fallacy in the federal government’s claim of self-sufficiency in rice production.
The price of rice shot up to N25, 000 per 50kg bag the week after the border was closed. The price of basic food items like tomatoes that everyone thought Nigeria was producing in large quantities started heading up as the border closure inhibited supplies.
It became obvious that tiny Benin Republic was not only feeding Nigeria with massive supply of smuggled rice but that Africa’s largest economy was equally depending on its impoverished neighbor to the west for the supply of fresh tomatoes. During the opening weeks of the border closure, the Nigeria Customs Service (NCS) impounded truck loads of fresh tomatoes purportedly smuggled into the country from Benin Republic.
Owners of the impounded tomatoes swore by Sango that they were harvested from their farms in Abeokuta. The NCS ignored their claims and promptly auctioned the seized goods. No one knows precisely who was telling the truth.
Everyone is paying the price for the border closure which is Nigeria’s way of combating uninhibited smuggling. The economy of Benin Republic is teetering on the brink as the millions of dollars it was earning daily from import duties on smuggled rice, vehicles, palm oil, sugar and sundry items have practically dried up.
Even the smugglers are counting their cost. The Nigerian National Petroleum Corporation (NNPC) boasted last week that the smuggling of refined petroleum products from Nigeria to its neighbors in the Economic Community of West African States (ECOWAS) has dropped drastically.
Perhaps the greatest losers are the corrupt men and women of the NCS. Returns from smugglers bribes have practically dried up with the closure of the borders.
NCS officials were reaping bountifully from government’s ban on vehicle imports from the land borders. The federal government placed an outright ban on vehicle imports through its land borders and hiked the tariffs on used vehicles through Nigerian ports to 35 per cent.
Importers responded to the new policy by diverting imported vehicles to Cotonou Port, while they bribe NCS officials and smuggle the vehicles into Nigeria. The federal government is the primary casualty of that policy. The number of vehicles imported through Nigerian ports has dropped drastically since the policy came into force. Government losses billions of dollars in import tariff revenue.
The federal government decision to partially close the land borders to the west is a desperate response to the cries of local farmers and manufacturers being priced out of the market by the cheap items smuggled into the country.
A Nigerian conglomerate that is venturing into ethanol production from cassava laments that ethanol smuggled from the U.S. hits the market at about N200 per litre when the production cost of the Nigerian company is N300. The Nigerian producer cannot compete. Smuggling has worsened Nigeria’s alarming unemployment rate.
However, the federal government’s decision to fight the menace of smuggling with border closure amounts to cutting the nose to spite the face. There is a limit to how long a country can close its border in the fight against smuggling. Even as Benin Republic is gasping for financial breath as a result of the border closure, Nigeria is equally paying a huge price for the unconventional fight against smuggling.
Nigerians who were doing legitimate businesses across the border have been pushed into the nation’s boisterous labour market. The situation would simply worsen an alarming unemployment rate in the land and push millions more into organized crime.
No one fights smuggling successfully with border closure. If appropriate measures are not put in place, smuggling would resume when the border is eventually opened.
The resort to border closure in a desperate bid to curb smuggling is an indictment of the NCS. The message from uninhibited smuggling is that Nigeria needs an efficient and patriotic customs service. There is none at the moment. The fact that smuggling dropped drastically when the borders were closed has exposed the fallacy of NCS claims that rice, vehicles, sugar and palm oil were smuggled into Nigeria through foot paths.
It is obvious that NCS officials opened the gates of the borders to smugglers and pocketed what should go into the coffers of the federal government. The federal government should weed out the rotten eggs in NCS and slam it with revenue targets that reflect what they collect from smugglers. If the NCS misses the ambitious target set by the federal government, the comptroller-general and his top management should be sacked. That is the only way to make the NCS carry out its statutory responsibility of tackling smuggling. We cannot achieve it by closing the borders.
Besides, the federal government must face the issue of high cost of production with the ferocity of a wounded lion. The cost of production is unacceptably high in Nigeria.
Rice from India and Thailand wade through high cost of freight and import tariff determined by a weak naira and still enters Nigeria cheaper than the ones produced locally. A 50kg bag of rice is N9, 700 at Seme border. Lake rice produced by Lagos state in collaboration with the innovative government of Kebbi state enters the market at N14, 000. That is even considered to be a subsidised rate.
Nigeria must divert funds used to subsidise consumptions like petrol and electricity to subsidise the production of rice and other food items. Production of those items is heavily subsidised in China, Thailand and India. Government can only fight smuggling with an efficient and patriotic customs service along with low cost of production. Border closure is a double-edged sword.