The Nation Newspaper

Tag: border closure

  • Border closure: Matters arising

    BY SIMEON EBULU

    Almost two and half months after Nigeria closed its borders with neighbouring countries, namely Niger and the Republic of Benin, opposition is mounting by interest groups for the borders’ reopening, but the Federal Government is insistent that the issues that resulted in the closures must first be resolved, reports Group Business Editor, SIMEON EBULU

    So much controversy has dogged the Federal Government’s decision to shut Nigeria’s borders with her neighbours. The move, which took  effect since about mid-August, has pitched the government against some interest and professional groups, including Nigeria’s foremost private sector organisation, the Lagos Chamber of Commerce and Industry (LCCI), Manufacturers Association of Nigeria (MAN) and cross-border traders, among others, on the one hand and key government officials, among them the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmad,  the Central Bank of Nigeria (CBN) Governor,  Godwin Emefiele and farmers’ associations, on the other hand.

    The issues leading to the border closure have been festering for a long time, and it is common knowledge that several attempts to resolve them have yielded little, or no results. The Seme Border which has attained the status of being the most active, in terms of cross-border trade and which serves as a transnational national travel route along the West African Coast, has posed a unique problem for Nigeria.

    In addition to its fluidity which makes its policing, or manning difficult, if not impossible, it is inhabited by non-distinguishable nationalities, among them Nigerians, Benenois and Togolies, who over the years have fused together one with another making it a futile exercise to attempt to draw any line of demarcation. Added to this is the fact that nearly all the border settlers on both sides of the divide engage in cross and trans border businesses, both legitimate and otherwise.

    The closure of the border therefore, even for a moment, signposts economic danger, or hardship as it is bound to impact directly on the very fabric of the border settlers’ existence, or livelihood and commercial engagement. This is without prejudice to the other larger economic and security considerations which the government claimed are key and that have necessitate the border closure, as in this case, so that the affected countries will have the opportunity to address the issues holistically and in an enduring manner.

    Nigeria offered a comprehensive reason for the border closure when Mrs. Ahmed spoke in Washington DC the United States,                in response to media inquisitions during the last International Monetary Fund (IMF)/World Bank Group (WBG) Annual Meetings. She said Nigeria’s borders with neighbouring countries were not closed as a strategy to increase revenue generation following reports that over N1.5billion was realised in one day from Customs collections at the Seme border.

    She disagreed with the notion, saying an outright “No” to the insinuation and linkage of government’s decision to increased revenue generation, rather she said in her words: “ Nigeria needed to close the borders because we were not getting cooperation with our neigbouring countries. The failure of the border states to abide by bilateral agreements they reached with Nigeria was the reason the borders were closed.

    “We have over the years been committed to some alliances and bilateral agreements, but our neigbbours were not respecting those bilateral agreements and at this time when the President has signed Nigeria up to the African Continental Free Trade Agreement, it becomes more important for us to make sure everybody complies with the commitments that are made,” pointing out that “the practice our neighbors have engaged in, is hurting our economy, it’s hurting our local businesses and we have to make sure that stops.

    “That is the purpose of the border closure and not generating revenue,” she said, saying, “ if revenues are generated it’s a consequence but that’s not the purpose.”

    Mrs. Ahmed however gave assurance that the moment the neighboring countries were ready to comply with the commitments that they have signed to, at that point, there will be discussions at the level of the Presidents where we will extract strong commitments from our neighbours and the issue would be resolved, she said.

    The border closure has also found a strident defender in the person of the CBN chief, Godwin Emefiele. He is convinced that the measure was well thought out and should be followed through until all lose ends, with regards to commodities’ smuggling, especially rice, are tackled and tied.

    Emefiele said the closure of Nigeria’s land borders by the Federal Government is yielding positive economic results for the country, insisting that before the borders are opened, there must be productive engagement with Nigeria’s neighbours that are involved in using their ports and land space as landing ports for foreign goods that are then ferreted into Nigeria using clandestine routes.

    Emefiele, who spoke at the State House in reaction  to complaints against the border closure from various interest groups, said the closure was justified and inevitable if its (CBN’s) efforts in revamping the economy must be felt and appreciated by farmers and the real sector to which most of its intervention efforts are directed.

    He said but for the border closure, rice farmers  would have continuously suffered loses from unsold stocks of rice and other food crops that had been stocked in warehouses.

    Emefiele said the border closure followed complaints by rice processors and poultry farmers, saying the government had tried to close the bank accounts of those smuggling or dumping rice on the country as a way of dissuading them from engaging in such unpatriotic acts.

    However after the border closure, the CBN chief had this to say:  “Recently, and this is the absolute truth, about two weeks before the border closure, the chairman of the Rice Processors Association called me and said that all the rice millers and processors were carrying in their warehouses nothing less than 25,000 metric tons of milled rice in their warehouses.

    “That this rice had been unsold because of the smuggling and dumping of rice through the Republic of Benin and other border posts that we have in the country and that he would want us to do something about it.

    “Secondly, we also have members of the Poultry Association of Nigeria who also complained that they had thousands of crates of eggs that they could not sell with even some of the processed chickens that they could not sell also arising from the problem of smuggling and dumping of poultry products on Nigeria.”

     

    Benefits of the border closure

    Emefiele said the border closure was a means of rejuvenating the  nation’s economy and creating employment opportunities, saying a week after the borders were closed, “the same rice millers association called to tell us that all the rice that they had in their warehouses have all been sold and that a lot of the people have been depositing money in their accounts as advance payment for rice still under going processing.

    He said the poultry associations have also come to say that they have sold all their eggs, they have sold all their processed chickens and that demand is rising. Emefiele said for those who are still unsure of the benefits of the border closure on the economy of Nigeria, “I just used two products – poultry and rice. The benefit is that it has helped to create jobs for our people, it has helped to bring our integrated rice milling that we have in the country back into business again and they are making money,” he stated.

    “Our rural communities are bubbling  because rice farmers are able to sell their paddy. The poultry business is also doing well, and also maize farmers who produce maize from which feeds are produced are also doing business.

    “These are the benefits. We are not saying that the borders should be closed in perpetuity, but before the borders are reopened, there must be concrete engagements with countries that are involved in using their ports and countries as landing ports for bringing in goods that are smuggled into Nigeria,” saying that engagement must be held so that we agree on the basis under which the countries are operating.

    Emefiele, described smuggling of foreign products into the country as a major impediment to the growth of local industries and businesses, adding that rice and poultry businesses have been booming optimally since the borders were closed.

    Notwithstanding the derivable benefits there from as enunciated by the government,  MAN, LCCI and the Nigerian Employers Consultative Association (NECA), have  cautioned the government to have a rethink, saying government should not allow the closure of the Nigeria-Benin border to jeopardise the business of entrepreneurs on that corridor.

    The President MAN, Mansur Ahmed, argued tat although  government might have good intention of protecting the businesses in Nigeria, it must also ensure that the action did not affect Nigerian entrepreneurs operating genuine trans-border business

    “The Federal Government may have good intention for the partial closure of the Nigeria-Benin border, but it must be done in a way that entrepreneurs and manufacturing concerns that carry out genuine business along that corridor are not adversely affected, Ahmed said, pointing out that if this is not well managed, it may lead to prices of some items hitting the rooftops.

    LCCI Director-General, Muda Yusuf on his part, said the government should be more strategic and tactical in dealing with the problem so that Nigerians doing genuine business along that corridor would not suffer, saying, “we should develop the culture of tackling the causes of problems, not fighting the symptoms. This is the way to solve a problem sustainably. He said government agencies at the borders have not lived up to their mandates.

    Yusuf said it was  impossible for the scale of smuggling being reported to take place without the connivance of state officials at the borders, saying the starting point in dealing with this problem is to get the state institutions to do their job. He said border closure does not offer a sustainable solution but only penalises small players in the informal sector. It also disrupts the supply chains and exports transactions of many big firms that do business across the sub-region.

    He argued that the cost of this closure to businesses is phenomenal and would be in billions of naira, pointing out that it has implications on the confidence of investors in the long-run.

    Also speaking on the border closure, the Director-General, NECA, Timothy Olawale, said businesses would suffer in the process, restating that the sudden closure of the borders raises concern for legitimate business owners, especially those involved in perishable goods along the border areas that need to export through the land borders. These businesses will suffer in the name of a blanket closure of the borders with further consequences being job losses, Olawale, said

  • Counting border closure’s cost

    By Muyiwa Lucas

    Mixed reactions have continued to greet the closure of the nation’s borders. While some say it is part of efforts to save the economy from collapse, others say it is an assault on the economy and disregard for the ECOWAS Trade Protocol, MUYIWA LUCAS reports.

    For over 15 years, Moussa Qasim, a Beninoise, has been taking advantage of the trade liberalisation policy of the Economic Community of West African States (ECOWAS).

    The ECOWAS Trade Liberalisation Scheme (ETLS) adopted in 1979 had opened the way for him to grow his business considerably, given the freedom of movement he enjoys among the countries. And for him, his main marketplace is Nigeria, which he says, takes up over 90 per cent of his products, ranging from agricultural, artisanal handicrafts and unprocessed products, including industrial products. In return, Qasim takes back to his country beverages, and some food items believed to be easily affordable here and more profitable in Benin Republic.

    From this cross-border trading, Qasim is able to cater for his family needs, including paying for one of his children’s tertiary education in Europe. But the tide is changing. Since middle of August, when the Federal Government closed the country’s borders across four of the six geo-political zones, business has not been the same for not only for Qasim, but also for several other traders across the sub region.

    From comercial motor cyclists, transporters, bureau de change operators, to cross-border traders, the story is the same: biting economy. There are fears that if the border  closure continues, the  Bennoise, Nigeriens and Chadians’ businesses may crumble.

    ECOWAS-ETLS

    The ETLS is a trade instrument designed by the Regional Economic Community. Article (3) of the Revised Treaty of ECOWAS stipulates the removal of trade barriers and harmonisation of trade policies for the establishment of a Free Trade Area, a customs union, a common market and an eventual culmination into a monetary and economic union in West Africa.

    The ECOWAS-ETLS is the main framework for trade and market integration in ECOWAS as it addresses protocols on the free movement of goods, persons and transportation. The ETLS main pursuit of consolidating the free trade area is guided by the National Approval Committees that informs the member states. It is for this reason that the ECOWAS implemented a Customs and Connectivity programme to simplify the movement of goods in the region. The ECOWAS Common External Tariff has thus been operational since 2015. Moreover, member states are increasingly implementing the ECOWAS Single Customs Declaration Form for their customs administrations.

    For all products covered under the ETLS, they are granted with concessions like no quantitative restrictions, total exemption from import duties and taxes, non-payment of compensation for loss of revenue for items (i) and (ii) as a result of their importation.

    To qualify for admission into the ETLS, such products must originate from the ECOWAS region. The following are the three criteria for admission of products into the scheme: at least 60 percent local content of products, at least 30 percent value addition for products.

    The abuse

    The ECOWAS-ETLS may have been abused by the country’s neighbours – hence the decision to keep the borders shut. For instance, a top government official in the Seme-Krake border told this reporter that Benin Republic, especially, has been abusing the ETLS’ provosions.

    The official, who pleaded anonymity, explained that it is a common practice for importers to bring in goods from Europe, load same back into trucks onward to Nigeria. Such consignment, he explained, are then left to enter under the provisions of the ETLS since there was no way to say they were imported.

    Besides, the several cries and warnings of the Federal Government were said to have fallen on deaf ears of the government of the neighbouring country of Benin Republic. But the reluctance of the Franco-phone country can be understood.

    Under its rice fortification policy, four multi-national companies and about 30 other smaller importers, including individuals, were said to have been given approval to import foreign parboiled and white rice into the country through Benin Terminal, Cotonou, and Bollore seaport- Benin Republic’s two seaports. The white rice, according to sources, are consumed  within the country while the foreign parboiled rice are exported to Niger and Chad, which in turn, are smuggled into the Nigerian market through the north and southern parts.

    The Value News, an online publication,  claimed that it obtained a document showing that African Agro Foods, one of the companies owned by Pan Lebanes Group, has a mandate to ship into Benin Republic 360,000 MT, or 30 percent of the annual  parboiled rice imports; Diefezi Fils Sarl, 300,000 MT; Sonam, a company floated by the Stallion Group based in Dubai, Quatar, having the Presidential nod to import 240,000MT or 20 percent of the total  parboiled rice needed in the country. These are eventually exported to land locked countries or smuggled  into Nigeria.

    It further claimed that another Dubai based company, ABC Enterprises, due to its limited financial muscle was said to have been given approval to ship into that country 10,000 MT yearly. This is in addition to 29,000 MT, or 24 percent, allegedly approved for the other group of rice importers through the two seaports in the country. These, it is believed, accounts for why the tiny sub-regional country is flooded with rice. And with a small population incapable of consuming the volume of imports, Nigeria became her ready market.

    Qasim, though unable to put a figure to the volume of rice import, nonetheless, revealed that in Benin, the warehouses are filled to the brim with rice, including vessels on its waters loaded with the commodity, but no patronage arising from the border closure. The smaller shops along the Cotonou road and the ones at Seme-Krake Joint Border  between Nigeria and Republic of Benin, were also said to have been filled up waiting for Nigerian buyers, who were nowhere to be seen close the border. Although there are no official cost to goods tied down at the Seme-Krake border, experts said it is not less than N750 million.

    Experts and stakeholders blamed Benin Republic for allowing countries like Taiwan to dump foreign parboiled rice in their country and then re-bag such products and smuggle them into Nigeria, taking advantage of the ECOWAS protocol, which allows access to free trade within the sub region.

    Last year, Nigeria’s former Minister of State for Agriculture and Rural Development, Heineken Lokpobiri, blamed rice smuggling on ECOWAS-ETLS protocol on free trade. He was unequivocal that the nation’s fight against the smuggling of foreign rice has been frustrated by her neighbours, particularly Benin Republic. He said the country spent up about $5 million for the importation of rice daily, but that through new policy programmes by the ministry and the intervention of partners like IFAD, the figure had reduced drastically.

    Such policies like the Anchor Borrowers Programme and Nigerians answering the clarion call of this administration to go back to the farms to produce what her people will eat and eat what she produces, has made the country to be rated as the highest producer of rice and cassava in Africa. Sadly, it is believed that Benin Republic has undermined these policies through being a conduit for smuggling into Nigeria.

    Long plan

    But the plans to stop this economic haemorrhage had been long thought of. Weeks later, Nigeria’s former Minister of Agriculture, Audu Ogbeh, hinted of the Federal Government’s plan to shut the land border between Nigeria and a ‘neigbouring country’ to avoid smuggling of foreign rice into the country. He had explained that doing so had become necessary to encourage local production and sustain the economy of the country.  He said this also denies Benin citizens the opportunity to grow rice and benefit from the Nigerian market.

    “We have engaged the government of Benin Republic, up to the presidential level. The (Nigerian) president had to invite the president of Benin Republic to engage him because we are neighbours; let’s see how we can work together and curb this issue of smuggling,” Ogbeh had said back then.

    Benin Republic groans

    The effect of the border closure has taken a heavy toll on the Beninoise economy, including economies of other West African countries. One of the very visible effect is the further crashing of the CFA- the currency of the Franco-Phone West African countries, against the naira. Before this period, N1,000, which exchanged for CFA 1500 before the border closure now, exchanges at CFA1650 to N1000 in Benin Republic.

    The Premium Motor Spirit (PMS), otherwise known as petrol, sourced through smuggling across Nigerian  borders with the Franco-phone West African nation, now sells at CFA500 (N302) per litre. This same product sold at CFA 300 (N181) just before the closure.

    Qasim said life in Cotonou is getting tougher daily, considering that all business houses related to doing business with Nigeria closed. For now, most warehouses in Cotonu are filled and overflowing with goods mainly rice and frozen food, meant for Nigeria.

    A look across the Seme-Krake border revealed the several hundreds of trucks parked at the borders, loaded with goods destined to Nigeria, but they have not been able to cross the border to Nigeria. Findings revealed that most of the trucks trapped at the border contain goods that fall under the acceptable category of goods in the ETLS agreement.

    “Generally, business is very dull – the closure has affected all ECOWAS countries. Most Benin warehouses are filled up with rice and frozen chicken. Generally, business is very dull in Benin Republic because most businesses are patronised by Nigerians-across the border and inside the country,” he said.

    He warned that should the Nigerian government continue with the operation for up to six months, the economies of most West African countries will collapse as most of them depend on smuggling of foreign goods.

    Niger’s sucker punch

    For the Beninoise President, Patrick Talon, these may not be the best of times. Four weeks ago, his country’s economy, which is heavily dependent on rice import, received a deadly blow.

    Determined to persuade the Nigerian government to reopen the borders, the Republic of Niger President, Issoufou Mahammadou, bows to pressure  from both official and unofficial quarters  to ban the export of foreign rice from Republic of Benin to the country.

    Issoufu, it is believed, may have taken the decision, as demanded by Nigeria’s President Muhammadu Buhari, to stop the smuggling of foreign parboiled rice into the through the northern frontiers. Nigeria and Niger share common borders in the north west geo-political region comprising Kano, Jigawa, Kano, Katsina, Sokoto, Zamfara and Kebbi states.

    Since June 2015, rice imports in Benin Republic had soared, when the Central Bank of Nigerian (CBN), under Godwin Emefiele   created a list  of 41 products, which were later increased to 44 with the addition of textiles  for which importers  do not have access  to discounted foreign exchange.

    Fruitfulness

    For now, the closure seem to have been a fruitful initiative. The Comptroller-General of the Nigerian Customs Service (NCS), Hameed Ali, said: “When we closed the border, my fear was that our revenue was going to drop. To be honest, our revenue kept increasing. There was a day in September that we collected N9.2 billion in one day. It has never happened before.

    “This is after the closure of the border and since then, we have maintained an average of about N4.7 billion to N5.8 billion on a daily basis, which is far more than we used to collect.

    “What we have discovered is that most of those cargoes that used to go to Benin (Republic) and are then smuggled into Nigeria now come to us.

    “Now that we have closed the border, they are forced to bring their goods to either Apapa or Tin Can Island and we have to collect duty on them.

    “If that (border closure) would continue, to us, it is a welcome situation. Our revenue has not reduced. As a matter of fact, it is increasing as a result of the closure of the border.

    “About 10.2million litres of fuel have been cut down from what we assume, we have been consuming,” Ali prided.

    Yet, commendations has continued to trail the closure. For instance, the President of National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero, is of the opinion that while the border closure is against international treaties and protocols Nigeria entered into willingly, but the action has so far proved to be the most potent approach to tackling the several years of massive smuggling of goods from Nigeria’s neighbouring countries into Nigeria and smuggling of Nigerian fuel to those countries.

    Amiwero, who noted that smuggling has been a major challenge to the Nigerian economy, submits that: “if this operation is sustained till at least the end of the year, the Nigerian economy will feel the impact in a very positive way while the West African countries which over the years depended on allowing their countries to be smuggling routes in and out Nigeria will be forced to re-strategise on ways to ensure the survival of their economies,” he said.

    According to him, there is no need to lose sleep over the hundreds of trucks of ETLS goods trapped at the borders because those goods attract just one per cent duty payment to the Federal Government, and therefore do not constitute any major economic loss to the country. “Most of those goods are ETLS goods, but in reality are not produced in those West Africa countries purportedly exporting them to Nigeria. They just gather the goods from different parts of the world, repackage and re-export to Nigeria as ETLS goods. That in itself is smuggling,” he said.

    For him, the closure is a blessing to the Nigerian ports in disguise. “If the operation is sustained, most of the people importing goods they want sell in Nigeria, but had been patronising Benin and Togo ports will have no other option than to start to route their import to the Nigerian seaports. They don’t have option; their market is here,” he said.

    No retreat, no surrender

    The National Security Adviser (NSA), Maj.-Gen. Mohammed Babagana Monguno (rtd), has also hinted that the closure would not end soon.

    The exercise, tagged: ‘Exercise ‘Swift Response’, he said, therefore, would be in place “until the neighbouring countries can ensure that their countries will no longer serve as transit routes for smuggling of goods into and or destination of smuggled Nigerian fuel’’.

    “There is no going back on the border closure  with  the  neighbouring  Republic of Benin and Niger. The countries share boundaries with Nigeria in the north west, north central, southwest and south-south geo-political regions till the  countries bow to government demand to stop  smugglers from using their countries as base to turn Nigeria  into  a dumping ground for prohibited goods, particular , foreign parboiled rice from the Asian country of Thailand. Harmful products, mall and light arms including foreign rice were smuggled into the country through unapproved routes  from the north and  southern part of the country,” he added.

  • Border closure: The pains, the gains

    As the closure of borders enters the second week, traders, shoppers and other stakeholders recount their ordeals. Stakeholders are, however, confident of good tidings when the exercise is over, JANE CHIJIOKE reports.

    Her forlorn looks say it all. With barely a week to school resumption in Lagos State, Mrs. Stella Chukwu, a mother of four, is unhappy. For over one week, she has been unable to stock her shop at the Iddo market with rice.

    Mrs Chukwu, a trader in local and foreign rice, has been dealt a blow with the restriction of movement across the country’s borders with her neighbours – Benin Republic, Chad Republic, Cameroon, among others.

    The restriction, code named “Exercise Swift Response”, a joint border patrol by the Nigerian Customs Service (NCS), Nigerian Immigration Service (NIS), and the Armed Forces, aimed at ensuring security of the country, has  affected trade between Nigeria and her neighbours.

    Before the closure, Mrs Chukwu  got supplies of foreign rice with little or no capital. She paid back after selling the commodity. Her involvement in foreign rice sales is to augment the small quantity of local rice she sells.  But since the partial closure of the border, she barely has goods to sell. With her trade in doldrums, she has remained concerned about her children’s chances of returning to school due to lack of finance.

    With the borders shut against trade, primary distributors of rice have resorted to the cash and-carry, jettisoning the previous arrangement of selling on credit.

    “Before the closure of the border, Nigerian rice was sold at between N12, 000 and N13,500. I was able to buy 10 bags of Nigerian Rice; now that it has increased to N14,500, how many can I  buy because I don’t have the funds? Some of us here get this foreign rice on credit and pay after selling. That way, we are able to stock up our shops which also attract customers,” Mrs Chukwu explained.

    Now, with barely five bags of local rice and four gallons of 25kg groundnut oil in her shop, she fears the unknown.

    Indeed, the soaring prices of the local and foreign rice have been a devastating reality  for some sellers.  The ripple effect of the closure, this reporter observed, has been unbearable. They complained of hike cost of the goods, paucity of funds and no affordable credit facility to boost their trade.

    Customs smile

    The above captures the mood of most traders and shoppers across the several markets visited in Lagos earlier in the week. Many traders have continued to rue the pains the continued closure of the borders is taking on market activities.

    For instance, last Monday, the Seme Customs Command of the NCS said its revenue in the last two weeks has increased by over N40 million, coming from seizures recorded in the ongoing exercise. The command said its officers seized 269 baskets of fresh tomatoes, fresh pepper and sacks of cucumber and 16 baskets of fresh okro, all perishable products with DPV of N367,471,  imported from the Benin Republic.

    Also seized were 875×50 bags of foreign parboiled rice with Duty Paid Value (DPV) of N15,023,750; 12×25 litres of vegetable oil with DPV of N131,625.90; 6x50kg of refined sugar with DPV of N147,640.50; 535 bales of used clothes with DPV of N17,259,769; 20 parcels of cannabis Sativa with street value of N516,180; 16 sacks of used shoes, belt and ladies bag with DPV of N541,989; 57 pieces of textile wrappers with DPV of N367,778; 65 cartons of poultry products with DPV of N948,333.75; 137×25 litre jerry cans of Petrol with DPV of N287,700; 16 buckets of car paint with DPV of N144,530.40; 11 cartons of galvanised nails with DPV of N99,364.65; 2,566 pieces of currency (in coins) and other foreign currencies; seven cartons of condensed milk with DPV of N78,534.75; four cartons of spaghetti noodles with DPV of N15,678.97; two cartons of tin tomato with DPV of N14,589; and two sacks of coconuts with DPV of N38,714.

    Others include four cartons of body cream, One bag of detergent soap with DPV of N58,913; 20 pieces of sandpaper with DPV of N12,778.50; four television sets; two pieces of television stands with DPV of N187,115.25; four cartons of fuel filter with DPV of N11,669; one carton of motor spare parts with DPV of N134,631; and one piece of gas burner with DPV of N2,137.

    RIFAN gains?

    For local rice growers, stakeholders were convinced that this period provides them the opportunity to increase their output and convince the world that they could meet, if not surpass, the local rice demands. And the association seem to be ready. Obviously in support of the initiative, the Rice Farmers Association of Nigeria (RIFAN) said that over one million metric tons of rice worth $400 million (N145 billion) was smuggled into  the country since the beginning of the year. The body views this as detrimental to local industry.

    RIFAN National Chairman Mr. Mohammed Abubakar said when the partial closure of the borders was viewed either from the trade or security point, the action being coordinated by military and paramilitary forces was commendable.

    He accused neighbouring countries and some multinational companies of conniving to sabotage food security and economic prospects of Nigeria with smuggling through Benin Republic.

    “Only Nigerians eat parboiled in West Africa as others, including Beninois, eat white rice. And so, any parboiled rice imported into Benin Republic is only on transit to Nigeria,” he said.

    Abubakar expressed the delight of members that mills that were producing below installed capacity have started revving up production.

    “Rice paddy that have been lying idle in stores are being milled because distributors are increasing their demand. We are also assuring Nigerians that we, and other rice producers, have the capacity to fill the loophole that absence of smuggled rice would create.

    “We have also committed ourselves in writing to government that we will not take advantage of the situation to increase prices. A bag of 50 kilogramme rice will sell for a minimum of N13,300 and maximum of N14,000,” he stated.

    Biting harder

    At a rice market in Lagos, there were scanty goods in most shops. At Iddo Rice Market, for example, some shops were locked while other shops had few goods.

    Also, at Daleko market, Mushin, Lagos, some shops had few goods. However, the local rice had more prominence than the foreign rice.

    According to Mr Yemi Olowo-Ido, at Iddo Market, the hike in the price of the rice and unavailability of the foreign rice, have put some traders out of business. He explained that traders could not access credit because of the high interest rate; as such, they could only buy few goods.

    His words: “Traders don’t have goods to sell in their shops. That is why their shops are empty. They don’t have money to buy the Nigerian rice at N14, 500 per bag. How many can they buy to sell? Will you rent a shop of over N600, 000 and just have four to six bags of rice in it. They need loans, but the interest rate on collateral is quite high. They can’t afford it.Things are hard. To eat is difficult.

    “Commercial banks used to give us overdraft, but not anymore. To get a loan now is a task; the interest rate is a barrier. We are pleading with these rice companies and distributors to understand our plight. Let there be a win-win agreement because for now, if you don’t have money at hand, you can’t sell Nigerian rice,” he said.

    Corroborating him, a trader at Daleko Market, who preferred anonymity, said since the closure, some traders have been out of stock, because they can’t buy large quantities due to paucity of funds and no business agreement with rice dealers that favour them.

    “We barely make a profit of between N200 and N400. For some of us, who sell foreign rice, most times we collect the goods and pay them back after sales. We do not enjoy local rice dealers.  That is how we have been surviving in the business. Some of us cannot buy from the rice companies because they won’t sell in little quantities nor on credit.  Those who have the money, especially the distributors, buy in large quantities from them and resell to us.  The distributors, in turn, don’t sell on credit to us so we can only buy few bags,” the trader said.

    The Iyaloja of Daleko Rice Market,  Mrs Jumlar Solaja, explained that  as return on investment is important to business, rice millers would not engage in such informal trade of leasing out their goods on credit as they have invested  a lot in  processing  the rice, including buying of rice paddy.

    She urged rice vendors to apply for loans in banks and also take advantage of the Rice Distributors loans, which has seven percent interest rate to boost their trade. As part of reasons for the hike in price of rice, she said they pay N500 as transport per bag.

    She said there was the need for the Federal Government to subsidise the rice paddy for the millers, adding that more rice farmers were needed.