Importation, exportation ban grounds commercial activities
Border communities worst hit Experts condemn policy Smugglers devise other means Barely a week after the Federal Government announced a total ban on importation and exportation through its land borders, economic activities have been paralysed in and around the border communities across the country. The Federal Government, Monday announced a total ban on the […]
- Border communities worst hit
- Experts condemn policy
- Smugglers devise other means
Barely a week after the Federal Government announced a total ban on importation and exportation through its land borders, economic activities have been paralysed in and around the border communities across the country.
The Federal Government, Monday announced a total ban on the import and export of goods at the land borders nationwide in the ongoing joint border operation tagged, Exercise Swift Response.
The operation began on August 20, 2019 involving the Nigerian Customs and Immigration, with support from the Army and other security agencies.
The joint border security is being coordinated by the Office of the National Security Adviser (ONSA) and covers the four geopolitical zones, including South-South, South-West, North-Central and the North-West.
Briefing newsmen in Abuja last week, the Comptroller General of Customs (CGC), Col. Hameed Ali (retd) said: “The issue of movement of goods is not the same thing with the movement of persons. Let’s understand that all perishable items are on prohibition, whether on export or import. Therefore, nobody can carry tomato to the border to import or export. So it makes it easier for us to close and ensure that all goods, for now, are banned from being exported or imported through our land borders.
“That is to ensure that we have total control over what comes in and what we do. We are strategising on how best the goods can be handled when we get to when this operation will relax.’’
Ali, however, advised local dealers who want to export or import items to use the seaports.
On when the operation, which is nearly two months will end, Ali said, “It is as long as it will take our neighbours to come to the table and agree to execute exactly what was agreed upon during former President Olusegun Obasanjo’s time, which is simple adherence to ECOWAS transit procedure. That has not happened.”
But many residents of the border communities are groaning as the ban has further pauperised them.
In Oyo State, the Okerente border market in Saki area, where most locals transact their businesses, has been at a low ebb since the ban was announced last week.
“The market is like a ghost town,’’ said Mr. Dare Adigun, a resident of the area, adding that their movement and activities were highly restricted, and they were subjected to maximum scrutiny.
“No one is allowed to take even a grain of rice or any other imported good to Nigeria. As we speak, they are everywhere here,’’ he said.
At Sikanda township border, another resident, Mr Olusola Ailako, said commercial activities had been grounded since the closure of the border. He appealed to the Federal Government to have a rethink on the ban, saying commercial activities are the only means of survival for the people.
He further said, “There’s a heavy presence of security agencies at the border. Every human being is subjected to a thorough search. Things are very difficult for our people as the border has been shut,’’ he said.
At Idiroko border in Ipokia Local Government Area, Ogun State, the ban on importation and exportation has taken its heavy toll on the social and economic activities of locals.
The effect of the ban on importation and exportation through land borders is also hitting hard on residents of communities like Oja-Odan, Ilara, Owode-Yewa, Ajilete, Imeko-Afon and others.
However, our findings revealed that despite the ban, smuggling activities have not ceased, though it has drastically reduced.
A commercial motorcyclist, who did not want his name mentioned, told our correspondent how rice is smuggled at night. He said those involved in the act convey between seven and 10 bags of rice on a bike and navigate through some porous borders.
According to him, a motorcyclist makes between N10,000 and N15,000 per trip.
“We change our routes daily. One of us who will not carry any rice will take the lead, and after some miles, he will inform us if the road is free or not. We convey those bags of rice at night,’’ he said.
Also speaking with our correspondent, a religious leader, who preferred to be anonymous, said the situation had increased criminal activities at various borders, as youths who hitherto made ends meet through smuggling have resorted to crime as a means of survival.
“Daily, they break into houses through ceilings. And you dare not park your motorcycle and stay some metres away; they will steal it.
“Those who engage in smuggling are feeling the heat, but the government should not rescind its decision. We have to learn to eat and patronise our products,’’ the cleric said.
A youth leader in Ipokia Local Government Area, Deji Imoleayo, told Daily Trust on Sunday that the joint security task force enforcing the ban had been making life difficult for residents.
He alleged that men of the Nigeria Customs Service (NCS) and the task force had been seizing locally produced products. He said that recently, over 200 baskets of tomatoes were seized by the joint security force and later auctioned.
“Market women and peasant farmers are the happiest set of people because they can sell their produce. Border closure is welcomed because it has curbed smuggling, but the enforcement agents have been making lives difficult for our people. They impound locally produced goods while our people are being killed during their clashes with smugglers,’’ he said.
Last week, the Minister of Interior, Ogbeni Rauf Aregbesola, who was at the border, pledged Federal Government’s commitment to providing alternative and legitimate businesses for residents at various borders to cushion the effect of the closure and ban of importation and exportation.
“You seem not to be happy now, but I assure you that you will be happy later because the Federal Government will give you alternative businesses and legitimate engagements that would bring wealth to your pockets and happiness to your land,’’ Aregbesola said.
A trader who sells second-hand clothes in Abeokuta, Wale Taiwo, told our correspondent that prices had increased due to the situation at the borders.
According to him, a pair of jeans, which usually cost N1,000, is now N1,500 or N2,000.
“This development has affected many things. Whatever affects food will surely affect other things,’’ Taiwo, popularly called Akube said.
Michael Adesegun, who patronises second-hand cloth sellers, said, “I have not bought clothes since the border closure. A few days ago when I called a trader, he said the prices of the materials had increased.’’
Our findings showed that the recent development has also affected the prices of frozen foods, especially turkey. One kilogram of turkey, which usually cost N1,200, is now N1,600.
Mrs Margaret Fatungase confirmed that prices of imported frozen foods had increased, adding that she no longer patronised imported chicken or turkey, having been warned of the adverse effects of consuming such things. “I rather go for life chicken,’’ she said.
When our correspondent visited Lolo, Kamba and Dole Kaina borders in Bagudo and Dandi local government areas of Kebbi State, commercial activities were completely paralysed, even in their surrounding towns and villages.
The famous Kamba Sunday Market, also known as a border market, was a ghost of itself. There was no usual patronage by Niger and Benin Republic nationals who came there every Sunday to trade.
Kamba town played host to local and foreign rice buyers and sellers. Since the closure of the borders, major foreign and local rice outlets in the area were shut as their goods were seized.
When our correspondent visited the border towns, no trader was seen displaying foreign rice for sale.
A shop owner at Dole Kaina told our correspondent that many of them didn’t have foreign rice since they could no longer bring them into the country. “Even if we have them, we cannot display them because Customs people will seize them. It has been difficult for us to sell rice since the borders were closed. We can’t even get other goods to sell because we can’t bring them in. My shop used to be filled with rice, spaghetti, tomato sauce and other goods, but we can no longer get them to sell,’’ he said.
The impact of border closure has also started hitting the state capital, Birnin Kebbi. A few weeks ago, men of Customs stormed the town and clamped down on car dealers. They also went to the central market for contraband goods. After the incident, all the major supermarkets and shops in the metropolis stopped displaying foreign rice for sale.
A salesman at Gwadangwaji Supermarket in Birnin Kebbi said, “We cannot even get Labana rice, which is made in Kebbi, to buy,’’ he said.
Also speaking to our correspondent, the district head of Lolo, Alhaji Muhammed Sallah, appealed to government to look into the issue of border closure because his people are suffering.
He said, “The means of livelihood of our people depends on the borders. Even our farmers, especially those who have farms in the neighbouring Niger and Benin Republics, cannot go there. They should help us to reopen the borders.’’
In Katsina, residents of border communities also said commercial activities had been greatly affected.
A commercial driver and loader at Maiadua international border market, Abubakar Rimis said, “There is a drop in commercial activities, which also led to a drop in our earnings. Most of our youths are now idle as they are afraid of being killed in the process of smuggling things across the borders.
“Most of those who came to this market are from the Niger Republic, but not anymore.’’
For Ahmad Abubakar, the government should see how to engage the youth, otherwise, the situation at the borders is a time-bomb waiting to explode. He said about 3,000 youths had been rendered jobless as a result of the ban on importation and exportation through land borders.
Another resident of Kongolom, Umar Bashar said, “The total shutdown has crumbled all activities in our town. What the government ought to have done is to list what should not be allowed. The total shutdown is uncalled for. “
For Lukman Abdullatif from Oyo State, who has been in Magama for 21 years, the ban will not stop him from doing business despite the sharp drop in sales.
“They come to buy, but not in large quantities. We are just bearing the brunt and making sacrifices for our country,’’ he said.
But Babangida Bako, who sells engine oil and spare parts, said the ban had reduced crime.
“I’m very happy with the closure because it has improved security at various borders. Criminals cross the borders to commit a crime, and after committing crimes, those within run across for escape, but not anymore because there’s intense security,’’ he said.
In Jigawa, the total ban on exportation and importation of goods through land borders has dealt a deadly blow on commercial activities in Maigatari, a Nigeria-Niger Republic border. Movement of livestock, which the people majorly trade-in, has been reduced to only 10 per cent.
Before the border closure, the market enjoyed high patronage by businessmen from western and eastern parts of the country, as well as people from the neighbouring Niger Republic.
Maigatari is the biggest camel market in Nigeria. Before the border closure, over 30,000 camels were displayed for sale every market day.
Speaking to our correspondent, the chairman of the Amalgamated Union of Cattle and Foodstuff Dealers in Maigatari market, Kabiru Aminu Maigatari, said there was not much to write home about on the present condition of the market as commercial activities had dropped to 20 per cent.
Traditional rulers from border communities in Kwara State said life had been difficult for them and their people since the borders were shut down.
The Emir of Gwanara , Alhaji Sabi Idris Kotokotogi said, “Every activity on the border is in comatose. People in border communities are not happy. Everybody is feeling the pain of the closure and I think there should be a way to look at it.
“All the items we use here come from Nigeria, but they are still very expensive. I have seen reasons for such development, but the government has to follow up with implementation,’’ the emir said.
But the chairman, All Farmers Association of Nigeria (AFAN), Baruten branch, Mal. Ahmed O. Aluma, expressed satisfaction over the closure.
When Daily Trust on Sunday visited some border posts, members of the task force were seen turning people back, while those moving items like charcoal, yam flour, yams, grains and other farm produce were made to offload them for checks.
In Taraba State, residents and smugglers have devised new ways to transact their businesses. As a result of this, border communities, located in three local government areas of the state: Sardauna, Takum and Kurmi, are still bubbling with economic activities.
It was gathered that communities on both sides of the boundary are not feeling the impact of the border closure as they have unofficial ways of crossing their goods.
In Gembu and Baissa , headquarters of Sardauna and Kurmi local government areas, businesses go on as usual as items from Cameroon are still being brought to Nigeria and Nigerian goods are smuggled into Cameroon through the bushes and mountains.
Items taken to Cameroon from border towns in Taraba State include petroleum products, household items and crops like maize and local rice. On the other hand, items being smuggled into Nigeria include foreign rice, shoes and clothes, mostly second-hand; building materials, cows, hide and skin and banana.
A resident of Gembu, Mr Gabriel James, told Daily Trust on Sunday that though several checkpoints were being manned by Immigration, Army, Civil Defence and Customs, residents still move their goods to the other country.
He said the border between the two countries was very porous and communities from the two sides who speak the same language know the routes very well.
He said communities on the Nigerian side had relatives in Cameroon and those in Cameroon equally have relatives in Nigeria; hence it will be difficult to stop the movement of people and goods to both countries.
According to him, motorcycles, engine boats and land rovers are the common means of transportation used to cross the border.
James said there’s no tarred road connecting Nigeria to Cameroon from the local government areas where they have boundaries with Cameroon; therefore, even before the border closure, most activities were done through the porous routes.
Fix structural, institutional, policy shortcomings, LCCI tells FG
Meanwhile, the Lagos State Chamber of Commerce and Industry (LCCI) has stressed the need for government to fix the structural, institutional and policy shortcomings that perpetuate the phenomenon of smuggling and increases vulnerabilities.
The director-general of the Chamber, Muda Yusuf, said unless the shortcomings were addressed, it would be difficult to put an end to smuggling.
Some of the shortcomings, according to him, include weak institutional capacity to police the country’s vast borders; the porous nature of the borders, stretching over 4,000 kilometers of land and 853 kilometers of coastline; failure to deploy technology to manage the borders and international trade processes; weak productivity in the domestic economy, which aggravates production and operating costs, thus impacting adversely on domestic prices and competitiveness; high transportation costs and weak domestic connectivity, which affects domestic prices; high poverty incidence, which makes majority of citizens crave for cheap products, including food items.
Other shortcomings are high and prohibitive import tariffs, which create daunting compliance and enforcement challenges for the Nigerian Customs Service and perpetuates corruption; foreign exchange policy, which incentivizes imports and penalises domestic production and exports; unsustainable subsidy regime on petroleum products; high transaction costs, high charges, corruption and inadequate equipment at the nation’s ports, making the cost of clearing cargo very prohibitive.
While he appreciated the fact that there’s a drastic reduction in rice smuggling, poultry products and sugar, as well as petroleum products since the closure of land borders, he stressed the need to reckon with the costs, supply chain disruptions and losses that businesses and individuals have suffered.
“A large number of informal sector players and individuals doing legitimate businesses across the borders have become victims of the closure. This poses a dilemma. The government means well, but there are many innocent casualties. As we celebrate the benefits, we should also count the costs. Jobs have been lost, prices have skyrocketed, legitimate exports to the sub-region have been halted, intermediate products for some manufacturers have been cut off, some multinational companies have been de-linked from their sister companies in the sub-region,’’ he said.
He further noted that the economies of border communities had been paralysed, with consequences for unemployment and poverty. “Over 90 per cent of Nigeria’s trade with the West African sub-region is by road. We export manufactured and agricultural products – detergents, toothpaste, plastic products, steel products, kitchen utensils, grains, ginger, onions, among others. We also undertake many re-exports to the sub-region.
“These are sources of livelihood of Nigerians doing legitimate businesses. There are also thousands of transporters who make a living from these legitimate trading activities. These are costs that would run into hundreds of billions of naira. We must weigh the costs and benefits. Most often, we do not count the cost of government policies on citizens and businesses. We should not underestimate the contribution of trade and commerce to the economy of the country,’’ he said.
He said the distributive trade sector accounted for about 15 per cent of the nation’s gross domestic product, which is estimated at N20trillion. He added that traders played a major role in the value chain of the real sector activities in the economy, stating that the trade sector is perhaps the largest employer of labour in the Nigerian economy.
Customs intercepts bags of rice concealed in petrol tanker in Kano
The Nigerian Customs Service, Kano/Jigawa command, has impounded foreign rice concealed in a fuel tanker, along Daura-Kano road.
Displaying the seized tanker and the rice, the comptroller of the command, Nasir Ahmed, said the new method of concealing goods by smugglers was challenging.
“What we saw today is a little bit new, something that is challenging to our thinking. If somebody can load rice in a compartment that is supposed to be containing diesel, petrol or kerosene, then we should assume that they can conceal anything in the tank.
“It can contain Tramadol, arms and ammunition, or any other prohibited good. And they loaded it in such a way that it would be very difficult to detect. But through the intelligence and diligence of our men, they were able to perceive it,” he said.
Ahmed added that keeping rice or any other consumable in such condition had some serious health implications, in addition to the security threats the new method of smuggling was posing to the nation.
He called on the general public to support and complement the efforts of the Federal Government by desisting from patronising such smuggled goods and giving useful information to the relevant security agencies.
Reacting to the incident, the president of the Kano Chamber of Commerce, Alhaji Dalhatu Abubakar, said dealers of locally milled rice were not helping matters by hiking their prices. As a result, foreign rice is still patronised. He called on the Federal Government and the Central Bank of Nigeria to intervene by giving capital in the form of soft loans to the dealers so that the price of a commodity could be controlled.
Ban will further increase inflation – Experts
Experts have complained that the closure of land borders could increase the inflation rate in the country.
A professor of Economics in the University of Abuja, Dr Yelwa Mohammed, said it was not good for the Federal Government to close down the land borders without taking measures to alleviate the sufferings of the masses.
He said stopping the importation of essential commodities like rice and spaghetti was a good idea only if proper orientation was carried out.
Yelwa said what the country produced could not meet the demand of the masses, adding that Nigeria has still not started producing rice in commercial quantities.
“In the local markets now, they repackage local rice and sell at exorbitant prices because borders have been closed. What we have as locally produced rice cannot meet up with the demand of people,’’ he said.
Also, a professor of Economics from the same university, Dr David Okoroafor, warned that the closure would lead to inflation because of the reduction in supply and increase in demand for these essential commodities. He said there would be less supply of those goods and an increase in demand.
An economist and onetime chief executive officer of a commercial bank, who wouldn’t want his name mentioned, said he did not understand the economics of the ban on importation and exportation of goods through the land borders.
“I don’t understand these economics. Our borders are indeed porous and there are lots of illegal importation without payment of duties etc, but there is inter African trade that predates those borders,’’ he said.
The president of the Manufacturers Association of Nigeria, Mansur Ahmed, an engineer, while speaking on the border closure said: “I understand that it is supposed to be a short-term arrangement to at least stop the massive haemorrhage of smuggled goods, particularly things like rice and so on, into the country while the government is looking for a more long term solution to the problem.
“I believe that manufacturers would be willing to work with this arrangement for a time, but it shouldn’t be an indefinite thing because if you close the borders, there are manufacturers who are genuine exporters whose businesses would be seriously hurt.
“There are also manufacturers who are bringing either raw materials or some of their inputs into the country and doing so legitimately. I think those people should not be penalised for too long.
“I think the arrangement should be held sufficiently long enough to be able to put in place a long term more sustainable solution. Closing the borders is not a sustainable solution, I am sure we all know.”
Land import, export ban will gravely injure economy – ACCI
The Abuja Chamber of Commerce and Industry (ACCI) has said the ban on imports and exports through land borders will cause grave injury to the economy.
The vice president of the ACCI, Dr. Johnson Somadina Anene, said it’s not proper for the authorities to insist on the policy because it hurts businesses.
“Most of the businessmen operating as Small and Medium Enterprises (SMEs) may not be able to effectively trade under such cost, and air and waterway travels are relatively more expensive than the land,” he said.
The industrialist said what is needed is a policy that would ensure strengthened security and adequate manning of land borders.
Experts attribute September inflation rate rise to border closure
Financial experts have attributed the rise in inflation rate for September to border closure and the new minimum wage.
Sheriffdeen Tella, a professor of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said the rise in inflation was not a surprise due to the border closure, which led to an increase in prices of food.
Tella noted that the closure resulted in an initial increase in the price of rice, a major staple food in the country
“We should not be surprised with the rise in inflation rate as the closure of land borders resulted in an initial increase in the price of rice, a staple food, and subsequent increase in other food items,” he said.
Tella said the announcement of minimum wage increase also contributed to the increase in prices of goods and services and attendant hike in the inflation rate.
He, however, described the government’s action as a welcome development, saying it would lead to increased local production of goods.
“I support the border closure so long as it can be sustained and force increased production of goods locally.
“The initial pain is what we are suffering, but in the medium term, we will witness an increase in local production and subsequent fall in prices of goods like rice and other annual products,” Tella said.
He said the current high price of local rice was due to hoarding of available imported rice to avoid being seized by Customs and the inability to meet up with local demand.
According to him, the price will soon reduce because the policy will force many farmers to plant more rice.
“Our taste buds will soon be changed to consuming local rice as it is currently with for imported rice and other imported food items.
“Customs should prevent smuggling of rice out of the country, particularly through the northern states,” Tella added.
Mr Ambrose Omordion, the chief operating officer of InvestData Ltd, said the inflation figure hike was traceable to the closure of border without adequate preparation.
Omordion said that insecurity in the country had contributed to inflation rise within the period as fewer farmers were in the farms.
He said the Federal Government needed to address the security challenges to stem inflation in the remaining months of 2019.
Omordion , who said that the closure of land borders was a welcome development, however, said its implementation was wrongly timed.
He said the government should have worked with farmers to ensure adequate supply and storage of locally made goods to mitigate artificial price increase. He said some domestic producers would take advantage of the policy to hike prices due to high demand.