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Nigeria’s Border Closure: Government deserves support of Nigerians (1)

By Afe Babalola

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Seme Border

IN August 2019, Nigeria announced and enforced the closure of its border with the Republic of Benin. The operation under the codename ‘Ex-Swift Response’ was a collaborative security operation involving the Nigeria Immigration Service and Nigeria Customs Service together with Nigeria Police Force and the Armed Forces. As with virtually all governmental policies and actions, the continued closure of the border continues to divide Nigerians. While the government claims to have acted in the best interests of the economy and Nigerians, some Nigerians and citizens of neighbouring countries most affected by the closure, continue to condemn it and called for an immediate reopening of the borders.

 

Prior warnings from Nigeria

Prior to the announcement of closure of the Nigerian border in 2019, President Muhammadu Buhari had, in July 2018, during a sideline meeting with President Patrice Talon of the Republic of Benin at the Seventh Tokyo International Conference for African Development held in Yokohama, Japan, discussed the issue of cross-border smuggling of goods, particularly rice, and the vitiating effect of such smuggling activities on the efforts of the Nigerian government to achieve a milestone development in local rice production by Nigerian farmers. President Muhammadu Buhari was reported to have noted thus:

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“Now that our people in the rural areas are going back to their farms, and the country has saved huge sums of money which would otherwise have been expended on importing rice using our scarce foreign reserves, we cannot allow smuggling of the product at such alarming proportions to continue”.

Despite this, smuggling of all kinds of products into Nigeria from neighbouring countries continued unabated. This not only earmarked Nigeria as a dumping ground for all kinds of goods, it also occasioned the proliferation of our markets with products which are otherwise produced by local manufacturers. The overflooded presence of these ‘imported’ goods undoubtedly has had profound effect on the growth of the local economy as resident manufacturers would have to compete with these goods in terms of sale, sometimes resulting into financial loss. Despite its low population compared to Nigeria, Benin Republic became one of the largest importers of rice in the world. Its ports also strangely became prime destinations for the export of used vehicles from North America to Africa.

The Enforcement, Investigation and Inspection Department of the Nigerian Customs Service is a department responsible for coordinating all anti-smuggling activities, including drug trafficking interdiction, money laundering and other financial crimes in collaboration with the National Drug Law Enforcement Agency, NDLEA. One of its reports revealed that the Customs in 2016 seized smuggled items valued at N8.056 billion. In 2017 the figure was N9.812 billion, while that of 2018 was N56.258 billion. As at June 2019 the value of smuggled items for the year stood at N1.806 billion. As alarming as these figures are, it is even more shocking that the smuggled items include virtually everything under the sun from bicycles, spaghetti, noodles, bags, suitcases, vegetable oil, tomato paste and most ridiculously, scrap metal! That no economy can survive under such circumstances is hardly debatable.

I have personally felt the unsavoury effect of dumping of goods. As a fish farmer, I invested several hundreds of millions of Naira in developing an ultramodern fish farm in Afe Babalola University, Ado Ekiti. My farm is well-equipped to cater for the local populace. However, when the fish were ready for harvest, the fish market was already heavily saturated with ‘imported’ fish from some of our neighbouring countries. I was therefore forced to sell off all the harvest at a huge loss.

I was not alone. I recall the case of a client who borrowed over N2 billion to establish a huge rice farm in Kogi, the luxurious rice farm was a beauty to behold; there was hope for huge harvest and reasonable profit. However, when the rice was harvested, the selling price of price had gone down to about 60% of what he expected. The poor man did not only suffered severe loss but he went bankrupt.

Indeed, prior to the closure of Nigeria’s borders, local production of food items in Nigeria had suffered low patronage, resulting in loss of investments and unemployment generally. The Governor of Central Bank, Mr. Godwin Emefiele, noted during a meeting with State House correspondents in Abuja that:

Recently, and this is the absolute truth. About two weeks before the border closure, the chairman of the Rice Processors Association, incidentally, he owns Umza Rice in Kano, called me and said that all the rice millers and processors were carrying in their warehouses nothing less than 25,000 metric tonnes of milled rice in their warehouses; that this rice had been unsold because of 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 have thousands of crates of eggs that they could not sell together with even some of the processed chickens that they could not sell, also arising from the problem of smuggling and dumping of poultry products into Nigeria.

Given the above, it is difficult to blame this administration for the decision to close the borders. Coming soon after signing the African Continental Free Trade Agreement, the government was obviously caught between the proverbial rock and a hard place. Faced between meeting its trade obligations under the Agreement and permitting the continued dumping of goods in its territory and the attendant damage to the local economy, the government has in my view, taken the better option or lesser evil of shutting its borders and protecting the Nigerian economy. It therefore deserves the support of Nigerians in this regard and happily there has been approval of its actions. Chief Emeka Anyaoku, in a speech titled “Nigeria’s New Emerging Economy: Opportunities, Challenges and Prospects” stated that:

We should support our foreign border closure by President Muhammadu Buhari and his ultimate importance to the homegrown policy. If it will be the government’s concentration in a demonstrable manner on measures for enhancing the country’s development of agriculture and agro-industry; and also for enhancing the country’s manufacturing capacity to be able to serve our internal consumption and export. It is clear that the abundant variety of Nigeria’s natural resources and our large population constitute adequate phases for the country’s economic prosperity, if the federal and state governments can show a determination to provide the necessary policy and practical support. And also if our citizens can be persuaded or even coerced through regulation into curbing their appetite for imported, rather than locally produced goods, there will be a tremendous turn around in the economy.

Next week I will discuss not only the immediate gains of the border closure but also steps that can be taken to prevent a reoccurrence of the factors which brought it about.

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