Border closure fails to curb smuggling as food prices soar

The border closure policy implemented by the Nigerian government for over two years failed to stop the smuggling of imported rice and other key commodities into the country while the land borders were locked, BusinessDay findings have shown.

The Federal Government had in August 2019 closed its eight major land borders with neighbouring West African countries to stem the smuggling of agricultural commodities, particularly rice, and to encourage local production.

In December 2020, the government approved the immediate reopening of four of the borders, namely the Seme border in the South-West, Illela and Maigatari borders in the North-West, and Mound in the South-South.

Zainab Ahmed, minister of finance, budget and national planning, who made the announcement, said “the ban on importation of rice, poultry and other banned products still subsists and will be implemented by border patrol team”.

Last month, the government directed the Nigeria Customs Service to reopen four more borders: Idiroko, Ogun State; Jibiya, Katsina State; Kamba, Kebbi State and Ikon, Cross River State.

BusinessDay findings revealed that despite the closure of the borders, foreign rice and other key staples were smuggled into the Nigerian markets through new routes at higher costs, thus resulting in higher food prices and raising questions about the effectiveness of the policy.

“The border closure did not tackle the issue of smuggling but it boosted local production of agricultural commodities, and farmers made more money,” Abiodun Olorundenro, operations manager at AquaShoots, said in a telephone response to questions.

“The government did not do what it was meant to do after shutting down the borders as we are yet to bridge our huge demand-supply gaps in most staples; so, when we introduced the border closure policy, prices started escalating because of these gaps,” he said.

According to him, the demand-supply gaps and cheaper imported products fuel the smuggling of agricultural produce.

“What we need to do is to make our agricultural commodities competitive,” Olorundenro added.

The demand for staple foods in Nigeria has continued to rise over the years, with the country’s population growing faster (at 2.5 percent per annum) than food production.

Experts said the shortfall in the food supply resulted in surging prices during the border closure.

“The policy brought hardship to Nigerians which we are still experiencing despite the reopening of the borders. It was the policy that triggered an upsurge in food prices,” said a CEO who does not want his name mentioned in print.

“The policy did not increase local production but only enriched a few who benefitted at the expense of the majority of Nigerians,” he said.

Read also: Nigerians forgo staple food items as inflation bites

Food prices in Nigeria have been rising since August 2019, when the policy was introduced, and have shown no sign of declining, despite the reopening of the land borders, as farmers are grappling with more challenges.

Nigeria’s food inflation, which was 13.17 percent in August 2019 when the policy was introduced, stood at 17.2 percent in March 2022, indicating that Nigerians are now worse off than they were before the borders were closed.

A 2021 report by the Institute for Security Studies says the border closure policy only resulted in creating new smuggling routes as illicit dealers were determined to move their goods across borders.

However, the border closure policy spurs investments in the agricultural sector, especially in rice as farmers and millers ramped up production.

“The policy was good for the country because it ensured that we started producing more locally,” said Ibrahim Kabiru, former national president of All Farmers Association of Nigeria. “Farming became a profitable business during the period when the borders were fully shut down.”

This is evident in the country’s GDP report as growth in the sector grew from 2.28 percent in the third quarter of 2019 to 2.31 percent in the fourth quarter of 2019, data from Nigeria’s statistics office show.

“We need to be able to protect our borders to tame smuggling and not to shut down our borders. Local production is increasing but there is still a demand-supply gap in most of our commodities,” said Fatai Afolabi, managing consultant of Foremost Development Services Limited.