Border closure:Why FG’s decision is in Nigeria’s best interest -Stakeholders
In August this year, the Federal Government shut down the country’s land borders in a bid to check smuggling of goods, especially rice, light arms, automobiles and other contraband cargoes from neighbouring West African countries into the country. This, it said, was aimed at facilitating the growth of local investment in rice production as well as checking the consumption of unhealthy food products by the citizenry.
Government’s plan initially was for the borders to be closed for just one month to enable its agencies to streamline certain tariff and import policies based on existing agreement with its neighbours.
But nearly three months after, all of the nation’s main borders are still remain shut, a situation which has received commendation from some quarters and condemnation from others.
However according to the Comptroller General of the Nigeria Customs Service (NCS), Hameed Ali, there is no definitive end to the border closure even as the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has stressed that the nation’s land borders will remain closed until neighbouring countries meet the requirements for them to be reopened.
Among those commending the government decision and calling for the continued closure of the borders are the nation’s rice farmers. Last week, Gombe State chapter of Rice Farmers Association of Nigeria (RIFAN), represented by its Secretary, Kalagar Lubo, said, “if the borders are opened, the farmer will not have it good,” implying that the borders should remain shut. He insisted that the country’s rice farmers can produce enough rice to feed Nigerians and to export.
In a phone conversation with Daily Sun on the implications of the continued closure of the borders for the rice industry in the country, a rice consultant and General Manager, Project, Elephant Group, Dr. Oluwarotimi Fashola, agrees 100 per cent with the decision of government to keep the borders shut, stressing that smuggled rice is not needed in the country with the exploits that the Central Bank of Nigeria(CBN) on the Anchor Borrower Scheme
Fashola is of the opinion that, local production and processing have to be developed and that the continued smuggling of rice would not allow the development of the sector to take place.
According to him, “the massive importation through smuggling through the land borders is detrimental to the development of the rice industry in Nigeria.”
He called for tighter regulations at the borders to enhance the growth of Nigeria’s local rice industry, insisting that whoever wants to bring in rice should do so through the nation’s ports.
For Dr. Fashola, bridging the demand-supply gap created by the ban on smuggled foreign rice into the country as well as bringing down the cost of locally produced rice will require increased investment and consistency on the part of farmers and patience on the part of consumers, as according to him, the situation would soon witness a huge turn around for the better for every stakeholder.
He explained that, “the actual rice planted comes as paddy. At the current status, the paddy being produced in Nigeria is about 10 million metric tonnes per year. From paddy you get the head rice. Head rice to paddy conversion is between 60 and 50 per cent. There are two sets of milling systems in Nigeria, the local milling and the integrated mills. The local mills are located mainly at Abakaliki, Lafia, Bida, among others. They are conglomerates of small millers with less sophisticated equipment, no colour sorting and small de-stoning machines. They account for 60 to 70 per cent of processing currently going on in the country.
On the other hand, the integrated mills are more sophisticated and come in different capacities. They have de-stoning facilities, colour sorting facilities and capacity to produce different brands and standards of rice. They account for the balance of about 30 per cent. But up until now, that capacity that you and I in Lagos, Kaduna and Abuja want is struggling to keep abreast of pricing because of smuggling. Since the shut down of land borders and the advent of advocacy for Nigerian rice, that capacity has started increasing.
“In 2016, what we had was just about 25 of that (integrated mills). Now, that has increased to almost 35-40. By next year, because more mills are coming in (it takes about nine months to one year for a mill to be constructed), we should be hitting about 50 and its increasing. And as that is increasing, the quality of rice will get better and more affordable to the majority. But if they are struggling with the imported rice, it will be difficult to have these good processing plants installed.
“In 2014 and 2015, the cost of smuggled imported rice was lower than their (local producers) cost so it was not an economic of scale for any investor to come in. But now, more investors are coming in because the prices are good. With time, this artificial price we have now, about N22,000 (per 50kg bag), will drop but it requires time and consistency. The cost of buying local paddy and milling at local mills is between N15,000 and N16,000 but because of scarcity created by supply and demand forces, that’s why it’s sitting between N20,000 and N22,000 but as more production takes place, the supply-demand gap will start shrinking and the price will start adjusting itself. So the price will not continue to grow but will continue to diminish because more farmers will go into production. We are projecting that by next year we should be hitting about 14 million metric tonnes of paddy. There will be increase in cultivated land area and yield. It’s a systematic way of making what we produce to be what we eat.”
Another respondent, Mr. Francis Toromade, the Director General, Premier Agribusiness Academy, is all for the continued closure of the borders. For him, “if closing the borders will make our local production grow, it’s better for us. When the borders are porous, some individuals are enriched and not the economy. Why must we continue to buy foreign rice? Rice is produced in Kebbi and Ebonyi states; we should encourage that.”
According to Toromade, the country’s population is projected to hit 400 million by 2050 and “if we don’t plan to feed ourselves internally, America cannot continue to feed us. If you’re dependent on anybody, you’re not in control of your life and the children yet unborn are not safe.”
He said, “for now, I’m for the borders remaining closed but with a clause, which is that if the borders should be opened, there should be sanity but if there’s no proper control, there’s no need to open it.”
He, however, warned against giving opportunity to local rice producers who would want to take advantage of the situation to unduly enrich themselves at the expense of the citizenry. To ensure this does not happen, he called for the standardisation of price of the product through the establishment of price control boards across the country to monitor pricing.
The Agribusiness Academy DG said, “there must be checks and balances. In order for Nigerian producers not to capitalise on it, there should be price control. It should be ensured that the prices they are selling aren’t too high. They shouldn’t sell beyond a certain price and anyone that defaults should be prosecuted and their companies sealed up. And in the markets, there should be whistleblowers to inform government about any rice seller who’s trying to exploit Nigerians and he/she should be prosecuted and his/her shop sealed up.”
A rice farmer and the South West Vice President of RIFAN, Mr. Victor Korede, who added his voice to the call for continued closure of the borders, said it will encourage farmers to do more to meet the rice demands of the country.
Korede stated that he, “will always be in support of the continued closure of the borders because I’m a farmer and a Nigerian and I know the good it will do for the country. It will ginger us because farmers will know they have a market and in that sector there will be progress owing to increased production.”
He said, “we know production now is slow but we know we have to rise to the occasion and develop our market. When you’re producing and there’s a market, you keep improving and expanding.”
Korede who emphasised the need to mechanise the sector to enhance production, lamented: “We cannot continue to produce with cutlasses and hoes. The countries bringing rice to us are not planting with hoes and cutlasses so there should be mechanisation of agriculture generally.”
Assuring that unavailability and high cost of locally produced rice would soon be a thing of the past, Korede said, “things have changed. Initially, we were doing one season planting but with what we have now, most farmers are planting more than once a year; there’s consistent planting now. As we are rounding off wet season planting, a lot of farmers are preparing for dry season planting.
“The scarcity that was witnessed following the border closure was artificial because immediately the borders were closed, some people mopped what was available in the market and hoarded it. And by the law of demand and supply, it created increase in price. But I can assure you that before the end of this month (November), harvest will start and there will be a release in the market, so there will definitely be a reduction in price of the product.”
On a final note, Korede assured that Nigerian farmers are up to the task of meeting the rice need of the country as there has been increased production owing to more people venturing into the sector and a continued return of those who had abandoned the sector in its bad days.