The federal government’s plan to place a ban on the importation of food products into the country including rice, chicken and automobiles and spare-parts such as cars, buses and tyres, with effect from January, analysts have argued, is not in public interest.
BAN. This three-letter word, as simple as it sounds, is one big nightmare to businesses involved in the importation of rice, fish, chicken, sugar, salt, cars and spare-parts.
Reason: the so-called ‘structured embargo’ on the importation of fish commenced this month, just as the government-proposed 70 per cent tariff on all new or used (tokunbo) motor vehicles has already taken effect, thus resulting in a general lull in such businesses, among other dire consequences.
Take fish for instance, the ban is already taking its toll on the fish-food chain.
Last year, there was public outcry when, in some quarters, speculations were rife that importation of fish was banned, starting from 2014.
However, at the tail end of last year, Agriculture Minister, Dr. Akinwumi Adesina, clarified the matter, saying that fish importation was not banned, rather, the ministry of agriculture was embarking on ‘structured embargo’ on the importation of fish which would commence on January 2014.
Adesina said the policy was to reduce overall annual importation of fish by 25% in order to buoy up local fish production.
Late October last year, the ministry of agriculture, had, in a circular, stated that bills of ladings for imported fish must be dated on or before 30th October, 2013 while the cargo should land not later than December 31st, 2013.
Some of the reasons, apart from stimulating local production of fish, include stemming the practice of dumping unwholesome fish in the country as trade malpractices associated with fish importation.
However, investigation by The Nation revealed that since the announcement, the federal government has stopped importation of fish into the country since October 31.
A concessionaire of a leading fish terminal in Apapa Port told our correspondent in an interview that the terminal and other terminals have stopped receiving fish product cargoes, which bill of laden were dated later than October 31, as they have been directed to do so by the federal government.
The General Manager, Port Operations, ENL Consortium, Mr Mark Walsh, said the new fish policy has now added to such others as the ban on cement and rice, which had seen the terminal losing up to 800,000 tons of rice in about 10 months.
“The government banned fish importation since October 31 last year. Before, we were doing 20,000 tons of fish every month, but now, that is gone. Any bill of laden after that date cannot be brought to Nigeria. What we have coming in now are those imports with earlier bills of laden dated before October 31.
“I talked to a lot of the fish association and they have said that by the end of December, there will not be fish in the cold rooms. So it is a serious situation because it will affect everybody in the country.”
Argument supporting import ban
It may be recalled that the ban on fish came barely three months after the Agriculture Minister, Dr. Akinwumi Adesina, disclosed at the inauguration of the Special Growth Enhancement Support Scheme for fisheries and the aquaculture value chain in Ado-Ekiti last August, that the federal government would soon place a total ban on the importation of fish and other aquatic consumables.
According to figures provided by the Minister of Agriculture and Rural Development, between 2010 and 2012 Nigeria imported an average of 780,000 metric tonnes of frozen fish annually from Europe, Latin America and Eastern countries, worth about N100 billion.
With annual fish demand estimated at 2.66 million metric tons (MMT), Nigeria currently produces about 0.78MMT leaving a demand-supply gap of about 1.8MMT.
Regrettably, the shortfall of fish supply in the country had led to a low annual per capita fish consumption rate of only 7.5 kilogrammes as against 15 kilogrammes per annum recommended by the Food and Agriculture Organisation (FAO).
In the view of the government, it is expected that an increase in national fish production would not only diversify the country’s resources base, but also complement efforts aimed at achieving the Millennium Development Goals (MDGs).
The government also expects production of 4.0MMT annually from its fish production programme, which could conveniently meet the national demand of 2.66MMT, as well as generate considerable export earnings, provided adequate and effective policies were put in place to drive the industry.
The minister had said that the ban would be imposed only if arrangements being put in place by the government to that effect worked as planned.
Represented by the Federal Director of Fisheries, Mrs. Foluke Areola, the Agric Minister had stressed that the country had no business importing fish, given its huge natural and renewable resources.
“The value chains are to create an enabling environment for increased and sustainable production of over one million tonnes of fish within the next four years, generate employment and pursue gradual reduction of fish imports,” the minister said.
Echoing similar sentiments, the Chairman of Nigeria Ship Owners Association (NISA), Dr Isaac Jolopamo, said the new fish policy would help save a large chunk of about N2 trillion which the country loses in freight as capital flight to other countries from where Nigeria imports fish.
Groundswell of
opposition against ban
Most Nigerians are of the opinion that the steps are good ones taken before the right time.
“It may not be totally ideal to stop fish for now, but placing a ban on some kinds of fish such as croaker will be fine because croaker is a tropical fish and we have enough of them in our waters,” said a fish vessel controller at Apapa, who would not be named.
“From the ban on cement to the increase in the tariffs on rice and now fish no longer coming in, it has been very difficult. We have lost up to 800,000 tons since January this year. But you see rice in the market. All the vessels bringing rice are going to Cotonou and the rice is somehow making its way across the border.
“So, you can still go the market, whether in Apapa or any other place in Nigeria, and still find rice, why? So you can see there is a problem. Cotonou does not make rice. They are Thai rice, Indian rice getting into Nigeria somehow. So the government increasing the duty only affects the government itself because all the duty on that rice is going to the government of the Benin Republic,” Walsh said.
Fish and rice: same side of a coin
Another product that Nigerians should expect a price hike on is rice. The price of rice, which is a staple for many Nigerian households, is also set to go up.
As far back as October 2011, the Minister of Industry Trade, and Investment, Olusegun Aganga, had announced that rice importation will end in 2014.
However, as the date came, Segun Akinleye, who lives in Lagos, believes that the government move would just bring untold hardship to ordinary citizens.
“We cannot produce enough to feed ourselves,” he said. “And what will happen is that price of rice will just skyrocket. And it is the poor people that will suffer most.”
However, it seems the worry is on the side of the citizenry.
According to the acting Director-General of the National Agricultural Seeds Council, Olusegun Olatokun, it is political speak that Nigeria cannot provide the rice it consumes.
“The total consumption in Nigeria is in the region of about six million tonnes of paddy,” Olatokun said in a recent declaration. “What we are producing is in the region of 3.5 million tonnes. What was left for us to meet up was about 2.5 million tonnes.”
Same old story
But these comments highlight some ironies of previous attempts to control demand of rice in the past.
Between October 1978 and April 1979, the military government, under General Olusegun Obasanjo, banned rice imports in containers under 50kg.
In December 1980, Shagari created a Presidential Task Force (PTF) on rice to issue allocations to customers and traders. In January 1984, the military regime of General Muhammadu Buhari disbanded PTF on rice and importation was placed under general license restrictions. In October 1985, Major General Ibrahim Babangida imposed a ban on the importation of rice (and maize).
However, during this period, rice was illegally imported into Nigeria through the country’s borders.
In 1995, the import ban on rice was removed by the then Nigerian head of state, General Sani Abacha, because local suppliers failed to meet demand.
But Olatokun said, in 2014, Nigeria will be exporting rice, stating, “It is a good thing that they (government) should ban it, if they don’t, the competition that will come may discourage the rice producers.”
Stakeholders’ appeal
Peeved by what he described as a defective policy, the Chairman, Rice Farmers Association of Nigeria (RIFAN), South-West zone, Mr Olusegun Atho, has advised government to put in place proactive measures to meet the country’s rice demand before banning imported rice.
Atho, who addressed newsmen in Lagos recently, noted that government needed to provide incentives to farmers to become self-sufficient in rice production.
“I don’t see any reality in this 2014 deadline. Not until when necessary machinery is put in place should government ban imported rice.
“Government should equip farmers with the necessary tools, including tractors, organic fertilisers and give adequate training to farmers.”
The RIFAN chairman also advised the government to provide adequate funding by way of grants or loans to farmers.
“These factors are very important and must be put into consideration, before the proposed ban.
“If these things are not in place, the ban cannot be realistic. Until when government begins to do something about it, that is when we can see the seriousness.”
He identified smuggling as the major factor that would hinder any ban on the imported commodity, just as it had adverse effects on local rice production.
“Government needs to come out and deal with the issue of smuggling, in order to encourage local growers.”
Atho also appealed to government to construct more dams and provide mini-pumping machines for farmers to prepare them for irrigation farming as well as introduce modern rice production technology.
“If government can provide all these to farmers, that is when government can boast of self-sustainability.”
Tariff on new and tokunbo cars
The Nation can authoritatively report that the government-proposed 70% tariff on all new or used motor vehicles began this month.
Accordingly, this tariff includes a 35 per cent duty and another levy of 35 per cent of the cost of the vehicle, which is an increase from a 20 per cent duty and two per cent levy.
Besides, tyres will attract 20 per cent duty and five per cent value added tax.
This increase is a result of approval by the Federal Executive Council of a new national automotive policy aimed at encouraging local production and assembly of vehicles in Nigeria.
A fait accompli
For most Nigerians, who still nursed the feeling that the new automotive policy may yet become fully operational until a later date, a document from the Office of the Minister of Finance, Dr. Ngozi Okonjo-Iweala, in a manner of speaking, literally sealed the deal.
The document shows that local assembly plants are expected to import completely knocked down (CKD) vehicles at zero per cent duty, semi-knocked down vehicles at five per cent duty.
Also, the plants can import fully built unit cars at 35 per cent duty and 20 per cent for commercial vehicles without levy, respectively in numbers equal to twice their CKD/SKD kits.
According to the government, this move was to discourage wanton importation of motor vehicles and tyres which stifles the country’s economy as well as promote the indigenisation of the local automotive industry.
By implication, the prices of imported cars will skyrocket.
Not at ease with high car tariff
But even before the kick off, there have been complaints not only by some players in the automotive but in different strata of the economy. Already, this move has been given knocks.
According to Abubakar Bello who is based in Kano, the government’s desire to encourage local assembly of motor vehicles is not sincere.
“If not, why give room to importation of fully built vehicles by the assembly plants at a lower duty of 35% without levy as against the punitive rate of 35% duty and levy of 35% for other importers of especially used vehicles,” he said.
“The bases for the policy and the speed with which it is being implemented without a thorough ground work give room for suspicion that government is only creating a new set of super monopolist car importers. What the government failed to realise is that it cannot stop the importation of especially used cars with our porous borders and highly corrupt custom officials. The sea ports of Nigeria’s neighbouring countries will soon witness a huge surge in activities with corresponding increase in revenue from tariffs.”
Because of this, Bello believes: “The local assembly plants will not be able to sell their vehicles whether imported or locally assembled as their prices will be prohibitive. They will put back their machines into the crates to take them to somewhere or back to their home countries as soon as they set up the plants.”
According to Oluwole Betiku, an auto-mechanic who runs an automobile training school and workshop, the policy was not well thought-out.
Making oblique reference to a statement credited to former President Obasanjo during his outing as a civilian president when he said, ‘Tokunbo car is better than no car at all,’ Betiku asked, “how many companies and government agencies give their staff car loans to buy new cars?”
Betiku also said those who purchased cheap cars usually pay back in terms of ‘spare parts.’
“The car makers lack technical back-ups,” he said. “There is no control over their spare-parts and consumables such as oil filters, fuel filters, and plugs which should be available everywhere.”
Betiku also urged that the policy be revisited and more stakeholders’ view be accommodated.
However, Aganga is optimistic about the policy, even going as far as saying that arrangements were in place to manufacture new cars that would sell for between N1.2m and N1.5m.
He said, “With our current population and economy, our potential vehicle market is about one million vehicles a year. This is more than sufficient to support an automotive industry.”
As the groundswell of opposition mounts against the ban on importation of food products and other essential commodities, Nigerians must wait to know whether the government or the sceptics are proved right.
examine the issue
