Proposed Border Closure: Symptomatic treatment for rice smuggling

Recently, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said the Federal Government will soon close Nigeria’s border with an unnamed neighbouring country which he accused of deliberate plans to ruin Nigeria’s self-sufficiency in rice production.

It was not too difficult to know that the Republic of Benin, Nigeria’s Francophone neighbour at the South West border, was the target of government frustration over the unending spate of smuggling activities going at that axis.

Nigeriamaritime360.com, just like any right -thinking Nigerian, appreciates the sentiment of government, especially given the present administration’s efforts to boost local production of rice and make the country self-sufficient.

We equally feel the pains and exasperation of government over the unabated smuggling of this staple food item through the neighbouring country which, if not checked, could make nonsense of government efforts to boost local production.

It would be stating the obvious that the Republic of Benin has been a fertile ground for unfettered smuggling into Nigeria.

The African neighbouring country has over the years been a source of worry to successive Nigerian Governments as the Francophone country has deliberately enunciated policies that encourage influx of all manner of goods, including those banned by Nigeria , into the country.

According to statistics, Nigeria’s official importation figures have dipped from 1,239,810 million metric tonnes in 2014 to 23,197metric tonnes in 2017.

Conversely, Thailand rice imports to Republic of Benin , according to statistics by Thai Exporters Association, has risen from 805,765 metric tonnes in 2015 to an all time high of 1,811,264million metric tonnes in 2017, which is 40m bags of 50kg, thus ranking the neighbouring country first in the world of net importers of rice followed by China, South Africa and Cameroon in that order while Nigeria ranks 49 on the list, down from second position it occupied few years ago.

Curiously, our West African neighbour does not have the market to consume this large quantum of rice with its about 10 million population.

But Nigeria’s huge population of about 200million provides the ready market for the commodity.

In 2003, the then President Olusegun Obasanjo was so angry at the anti-Nigeria trade policies of Benin Republic that he ordered the closure of the border between the two countries.

It took the intervention and personal apology and assurance of Mathieu Kerekou, the then President of the West African country before the border was reopened.

One can then appreciate the position of the present administration in its resolve to close the border of our recalcitrant neighbour the second time for its uncooperative attitude towards curbing this malaise.

But we dare say that is not the solution to this malignant problem of smuggling of rice.

On the contrary, we believe this measure will only aggravate the problem.

We are not unmindful of the giant strides which government has taken to boost local production of this item and the huge resources committed to the efforts.

Through its Anchor borrower scheme to boost local production of agricultural products, government, through the Central Bank of Nigeria, made available a whooping sum of N220b to be accessed by farmers.

So many farmers across the nation have benefitted and more are benefitting from this support programme.

As a result of this support programme, the country attained 3.7 million tons of milled rice in December 2017 from the 2.6 million recorded in 2015, making it among the sixteen top producers of rice in the world.

According to an Index Mundi, a global data portal that gathers facts and statistics, the country’s rice production went up by 24.49 per cent within the last four years, making the country to become the second producer of the grain in Africa after Egypt, which currently produces 4.3 million tons.

It would be recalled that the Central Bank of Nigeria (CBN)’s anchor borrower scheme has boosted the country’s production records in the last two years, when it stopped issuing form “M” or letter of credit, to rice importers in 2015 in order to encourage local production.

Also, Chief Audu Ogbeh, said the country has recorded 95 percent reduction in the importation of rice as a result of the combination of government multi-pronged measures to encourage local production.

Apart from the stoppage of issuance of Form M by the CBN to importers of rice, government equally banned importation of the commodity from the borders in March 2016.

It equally slammed high tariff of 110 percent on rice imports through the ports.

Most of the states whose farmers accessed the funds under the Anchor borrower scheme have begun production of the commodity.

The one that readily comes to mind is Lake Rice jointly produced by Lagos and Kebbi states and Mitros Rice from Ogun State.

No government will therefore fold its arms and watch such efforts rubbished and the gains of such empowerment programme filtered away without doing anything.

Yet, despite these so called gains and giant strides to stimulate local production, the commodity is still being smuggled into the country with ferocious tenacity by die hard smugglers.

This platform believes that rather than resorting to border closure, government should find out why smuggling of the commodity still thrives despite the juicy incentives to local farmers, harsh penalties for its importation and the Customs onslaught against its smuggling.

One does not necessarily have to be a rocket scientist to know that despite the huge figures being bandied about as recorded in local production, there is still a market for the smuggled rice in the country.

It then presupposes that there is still a gap between the demand and supply of the product.

The Secretary of Rice Millers, Importers and Distributors Association of Nigeria (RIMIDAN) Shaibu Mohammed corroborated this position when he declared that it would be difficult for the country to end importation or achieve self-sufficiency in rice production by 2018 because of the importation of parboil rice from Thailand and other countries through the neighbouring countries, stressing that the gap between demand and supply was still huge.

According to statistics, Nigeria has total domestic consumption of 6.9 million metric tons as against the 3.7 million milled rice achieved in 2017, a figure that may be slightly higher this year.

From these statistics, it is obvious that our present local production capacity is slightly half of the total demand for the commodity.

It therefore goes to show that even if government seals up all the air and land borders against rice importation, the product will still find its way into the country.

Water, they say, must find its level.

To meet this supply gap, it is estimated that Nigeria will need slightly above three million tons of rice valued at (N480.6 billion) $1.33 billion this year in order to meet its total domestic consumption of 6.90 million metric tons.

We then ask, how will this gap be bridged? Is it by putting our borders under lock and key or stepping up our local production drive?

If local production capacity could not be enhanced to meet the voracious taste of Nigerians for rice, then smuggling would continue to be an attractive option.

No wonder despite the huge economic loss these illicit traders suffer as a result of frequent seizures by Customs, they seem not perturbed.

We believe that the only and credible way to discourage the smuggling of this product is for government to reassess its support programme aimed at improving local production.

This calls to question the actual success of the Anchor borrower scheme and the sincerity of the beneficiaries.

Nigerians are yet to feel the impact of the locally milled rice as they are not readily available in the open market.

It was always a tug of war to buy the Lake Rice which Lagos State government makes available during festive periods at designated local council areas.

The Mitros Rice in Ogun is still largely available in the imagination of its promoters.

Why would people not patronise the foreign parboiled rice, even at higher price, when they could hardly find the locally- milled rice to buy in the open market.

We have a strong hunch that the successes claimed by most of the local Millers are suspect which we feel was aimed at justifying the huge financial support they get from government but which was not fully utilised.

We hear that some of these farmers have not been faithful to the repayment plan of the loans.

Also the high smuggling rate of the commodity, despite the fantastic statistics being bandied about by government over the reduction in importation of rice, has given out the claim as being largely a fluke.

The rice importation may have gone down due to official obstacles placed on its importation, but it still comes in torrents through unapproved routes at the borders.

The same fate is what befell the auto policy of government when Nigerians , despite the ban on tokunbo vehicles from border and higher tariff slammed on its importation through the Ports, still prefer to buy the smuggled ones since they could not see the locally produced cars which the policy was meant to engender.

We therefore call on government to shelve its proposed plan to close the borders because that would not solve the malignant problem of smuggling.

The people will lose appetite for foreign rice, most of which are unhealthy for human consumption, if the market is flooded with locally milled rice which is more nutritious.

Gradually, the market for smuggled foreign rice will start to shrink until it dies a natural death when people can easily find our local rice in the market.

This scenario will be akin to what happened in our entertainment industry some years ago when foreign music was in vogue.

But when our local artists rejuvenated their music and offered what appeared to be a superior value, Nigerians lost taste for foreign music while its patronage considerably dwindled.

The same fate, we believe, will befall foreign rice if Nigerians get better alternative easily and at affordable prices.

We feel that closing the border will not only be unnecessary but highly ineffective measure to check smuggling.

For us, our borders have been technically closed when in March 2016, government banned rice importation through these axis.

Despite this measure, this commodity comes into the country in torrents, raising question on the moral uprightness of Customs officers at these borders.

Total closure, as being contemplated by government, will not only fail to solve the problem but also inflicts untold hardship on Nigerians whom government ironically, is trying to protect, as other trade commodities would be affected.

We therefore urge the government to bridge the yearning gap between the demand and supply chain of the essential commodity by rejigging its support programme on rice production while maintaining the existing restrictions on its importation.

With diligence ,commitment and sincerity of purpose as displayed so far by government in its efforts to grow local capacity in rice production coupled with patriotism of Nigerians, the appetite of Nigerians for foreign rice would soon fizzle out.

Resorting to closing down the border would amount to desperate measure that will only treat the symptoms of the malaise while leaving the core causes to fester.