As ministers disagree over effects of closure on inflation
Benin failed to implement agreements with Nigeria – FG
Ghana, The Gambia plead for immediate re-opening
By Victoria Ojeme & Johnbosco Agbakwuru
ABUJA — There was upro
ar on the floor of ECOWAS parliament, yesterday, over Nigeria’s border closure policy as Nigeria hinged its decision on failure of Benin Republic to implement agreements.
With Ghana and The Gambia insisting that they were implementing all bilateral agreements and urging Nigeria to re-open the borders, the Federal Government said the borders would remain shut for a while, even if it was responsible for rising inflation within the country.
The verbal exchange followed presentation of Nigeria’s country report by its delegation at the ECOWAS Parliament, led by Deputy Speaker of the House of Representatives, Ahmed Idris Wase at the 2019 Second Ordinary Session of the parliament in Abuja.
Wase told the parliament that prior to the Nigeria’s land border security drills, the Nigerian Government had in 2016 banned importation of rice through land borders.
He said that despite this measure, imported rice continued to flood the Nigerian market at rock bottom prices, thereby rendering locally produced rice unattractive to buyers.
Specifically, he said “most of the smuggled goods are not part of the legal items captured under the ECOWAS Trade Liberalization Scheme, ETLS, but rather imported by third countries, such as rice produced in Thailand and Vietnam, exported to Benin and finds its way to Nigeria through smuggling.”
He said such goods were accompanied by other illicit items such as hard drugs, which were causing so many challenges to Nigeria.
He said: “Nigeria has a lot in common with all the countries that we share borders with; there is no difference between the person living in Jibia in Katsina and the person living along the side of Niger, is it the religion or the language they speak or the culture and tradition?
“The same thing with a person living in border communities of Togo, where we have Yorubas, and in Cotonou, and I want to believe that we are one member nation. My colleagues, what has been doled out to you may not be the correct perspective.
“First we have a protocol and the protocol is very clear — no country in the ECOWAS sub-region is allowed to export into another country what it does not produce, meaning, by our own actions, we want to be self sufficient, we do not what to be dumping grounds, we want to encourage local production.
“We cannot sustain this any longer at this time, a situation where the so-called super powers of the world will produce, have it for a very long period of time, after a while, they use other African countries as conduits to bring these things to our country. This is not acceptable to Nigeria and I believe as good citizens and MPs, we should encourage our people to become productive. The population we have in this country should not just be a number by size, but a number that can be helpful to the nations of Africa and to the world.”
‘Need for understanding’
He called for understanding regarding the border closure, saying that Nigeria that has been there for her neighbours should also count on the neighbours to secure her economy, as well territorial integrity, just as she won’t fold her arms and watch her efforts sabotaged.
“Mr. Speaker, my respected colleagues, I want to beg of you to bring understanding to this matter. Nigeria has paid its dues and it is still paying its dues. We have always been there for our neighbours in times of need, and I’m saddened by the comments of some of our colleagues here. We have been helping in virtually every country in Africa, even by contributions.
“You can’t compare the contribution of Nigeria with any other country. I think the reason why we are lagging has to do with our budgetary system, which we are now battling to change the narrative regarding the cycle from the period of un-determined time, to January to December. And the presenter did mention why the contribution was not paid.
“Mr. Speaker, my respected colleagues, Nigeria have started seeing some changes in terms of security. These borders have not just been used for the purpose of conduit and I’m happy one of the MPs from the countries that are complaining said they are packaging beer using our people. Should you use our people for crime, should that be allowed, are we not supposed to be our brothers’ keepers?
“We have started developing agriculture in our country; we also want to be self-sufficient. Help us to stop these Illegalities, because we will not allow people to cross our borders with the things that we can produce. Take advantage of this and use vehicles to patrol. The MP from our neighbour has confirmed to us that they are the ones using Nigerians to make money to the detriment of our own country.
“By confirmation, we have had public hearings at the National Assembly; we were almost taking the same position you are taking. After the public hearing, we came to know that some of the rice that were being imported to Nigeria have an expiration period of more than five days, will you give these to your dogs in your country?, I don’t think this is allowed.
“I don’t think we are here to encourage corruption, rather to encourage what we have agreed to do collectively, that is, to say no to all these. From the day we closed these borders, I want to say and confirm to the world that even the so called insurgents have now been extinct. Because it is the same border that the massive arms are coming through, yes we have customs, but they will package rice on the top, inside it they will put arms and bring into our country. No country will support that.”
‘Pacts with Benin, Niger not working’
The Nigeria delegation explained that Nigeria signed three Memorandums of Understanding, MoUs, on border security with Benin Republic at different times and these have not yielded the needed results.
“Nigeria also assisted Benin Republic with donation of ten (10) Hilux vehicles to deal with smuggling activities on 2nd May, 2017. Recently, Nigeria further donated five (5) Hilux vehicles to Benin Republic to combat smuggling activities. Unfortunately, all the MoU signed were not implemented by Benin Republic and the donations did not yield positive result,” he said.
He said Nigeria’s land borders security drills with the Republics of Benin and Niger commenced on August 20, 2019 explaining that the borders’ security drills were due to the prevailing massive smuggling activities taking place in that corridor, especially the smuggling of rice into Nigeria.
“Bilaterally, Nigeria has engaged with the Republic of Benin and Niger many times on this matter without positive result. The dumping of imported rice into Nigeria has adversely affected the local production of rice vis-a-vis Nigerian economy,” he said.
“As a result of the border drills, Nigeria has suffered some loss of its export to the sub-region. For instance, in the first quarter of 2019, Nigeria’s export reached $17,047,978.85 while in the second quarter of 2019, it was $12,868,042.21. However, as a result of the land border closure in the third quarter, it dropped to $2,429,886,741.55,” he added.
We’re suffering collateral damage — Ghana MPs
The Nigerian delegation had hardly finished its presentation when lawmakers from different ECOWAS countries voiced their dismay at the border closure, arguing that it goes against the spirit of the ECOWAS Protocol on free movement of persons and goods.
Ghanaian lawmakers, led by Kwasi Ameyaw Cheremeh, said the closure of the borders since September this year was a major issue affecting Ghana’s trade with its neighbours in the region, noting that several trucks from Ghana sending goods to Nigeria had been stranded at the Seme-Krake side of the border for over two months now.
The Ghanaian delegation also said trucks returning from Nigeria with goods could not also cross the border.
He said while Nigeria claimed that the border closure was not targeted at Ghana but to control some security issues emanating between them and the Republic of Benin, Ghana indicated to its Nigeria colleagues that the border closure had collateral damage on Ghana’s export and imports to and from Nigeria.
Also, leader of the delegation from The Gambia, Kebba Barrow, said The Gambia has continued to comply with the ECOWAS Protocol on Free Movement of people and the right to reside and establish, urging Nigeria to do same.
Speaker of the ECOWAS Parliament, Moustapha Cisse Lo, condemned the closure of the border between Nigeria and Benin and between Niger and Nigeria, and urged immediate re-opening.
“I reiterate my call for the opening of the borders among our states and the observance of the protocol on the free movement of persons and goods in the ECOWAS region, which aims to facilitate trade liberalisation and the removal of trade barriers between our states and our peoples,” he said.
Border closure contributing to inflation – FG
Meanwhile, Nigeria admitted yesterday that border closure was hurting its economy but noted that the advantages outweigh the pains
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said closure of the borders contributed to the rising inflation in the country.
She, however, assured that the closure was temporary, saying government expected the neighbouring countries to respect the ECOWAS protocols to enable the reopening of the borders.
The nation’s annual inflation rate was said to have increased to 11.61 percent in October 2019 from 11.24 percent in the previous month, reaching the highest since May of 2018.
It was also reported that prices rose mainly for food.
The Minister of Information and Culture, Alhaji Lai Mohammed, also said the benefits of border closure far surpassed the very little increase in inflation.
Both ministers spoke while fielding questions from State House correspondents after the weekly Federal Executive Council, FEC, meeting presided over by President Muhammadu Buhari at the Council Chamber, Presidential Villa, Abuja.
The Finance Minister during the briefing, explained that despite the closure of borders and the complaints by some Nigerians on the negative effects, its benefits outweighed any hardship people might be complaining about.
She said: “I need to remind us that the border closure is temporary. We have really advanced in our discussions between ourselves and our neighbours. We expect that the outcome of those discussions and agreements is that each party will respect the protocols that we all committed to and then the borders will be open again.
“What we are doing is important for our economy. We signed up to the African Continental Free Trade Area, ACFTA, agreement, we have to make sure that we put in place checks to make sure that our economy will not be overrun as a result of the coming into effect of the ACFTA.
“That is why we have this border closure to return to the discipline of respecting the protocols that we all committed to.”
“On inflation, headline inflation declined every month for several months before we noticed an optic in the last two months. And now headline inflation is at about 11:61 percent as at the end of October. The slight increase in this inflation between September and October is due to food inflation.
“The food inflation we are ascribing to prices of cereals, rice and fish. And part of the reason is the border closure but the border closure is very very short and temporary and the increase is just about two basis point.
“Remember there was a time inflation was nine percent and it grew to about 18 percent in January 2017 when we were in recession.
“The relationship between inflation, interest rates and growth is managed by the monetary authorities and is a management that is tracked on a regular basis.
“So if you reduce interest rate you expect more borrowing for investments in the real sector. But at the same time that also has the tendency of reducing money that is used for consumption on a day to day basis.
“So it’s a balance that we continue to watch on a regular basis, we expect that this will be moderated as border closure impact fizzles out and also as the monetary authorities continue to support the MPR rate therefore ensuring that interest rates are not on the high side.”
On his part, the Minister of Information and Culture, Alhaji Lai Mohammed, disagreed with the Finance Minister that border closure played a major role in the rising inflation in the country.
He said: “You see, the issue of border closure and I think it will be quite misleading and will not serve the real purpose of our headlines tomorrow (today) is that inflation is as a result of border closure.
“The border closure, frankly speaking, is what we needed to do and we had to do it. We cannot continue to subsidize the rest of West Africa. And the benefit of border closure for me, I think far surpasses the very little increase in inflation.
“We have been able to save about 30 percent from our fuel consumption which means that over time we have been subsidizing the fuel consumption of other countries.
“Within the last three months, we have been able to increase by 15 percent duties collected from import. Within the same period and this is very important, we have been able to drastically reduce the volumes of arms and ammunition that have been coming into the country through smuggling, ditto with illicit drugs.
“All Nigeria is saying, please let’s respect the protocol on transit. ECOWAS set up a protocol on transit goods which is very simple, if a container meant for Nigeria is dropped in Cotonou, the authorities in Benin Republic should escort the container to customs in Seme border, and that way proper duty will be levied and will be paid.
“But on the contrary, what we have seen happening… and the protocol said, you cannot break the seal, you cannot open the container. But what has been happening over the years is that our neighbours will transport the container, put about five containers on one truck and drive it to the border as if it is only one container they are going to pay duties on.
“Worse still, less than even 50 per cent of what is meant for Nigeria will come through the approved border. So, what we have done and it has maximum effect is to ask our neighbours to respect the protocol on transit, if they do that the borders will be open. But you cannot continue to play the big brother at the expense of national security and national economy.”
Asked whether Nigeria and the neighbouring countries have agreed on the way to go, he said: “Even yesterday (Tuesday), there was a meeting between the various actors. I know that the Comptrollers of Customs of all the three countries involved met yesterday.
“As we speak today (Wednesday), we have not reached any agreement but channels have been deployed, everything is going on but our insistence is that we must all respect the ECOWAS protocol on transit goods, we must respect the various MOUs we entered into, so that there will be freedom of movement of goods from one country to the other provided those goods are manufactured in the states that are exporting it.”
“But what we have seen is that goods are imported from everywhere and re-packaged to look as if they are manufactured in an ECOWAS country and they are brought into Nigeria. This is discouraging local manufacturers, local industry.”