The FG has admitted that the border closure may be behind the growing inflation in Nigeria.
The FG-led land border closure came like a thief in the middle of the night, to a massive population of Nigerians and has since left it’s mark of despair on several faces. On August 20th, ten days to the commencement of the popular “Ember” period which is a precursor to the yuletide season, the Nigerian government announced a total closure of all its land borders.
To put this in clearer perspective Nigeria shares land borders with Benin republic to the West, Niger republic to the North, Chad and Cameroon to the East. These borders are purported to be notorious hotbeds for smuggling of various products into the country like rice, frozen poultry, various classes of alcoholic beverages, automobiles (fairly used and brand new), illicit drugs, prohibited weapons etc.
Also, subsidized petroleum products are likely smuggled out via Nigeria’s borders to neighboring countries where they are sold for profits to the benefit of the racketeers and to the detriment of the national economy. In order to stem the tide, the Nigerian government the drastic measure of closing down the land borders.
Nigeria has been bedeviled with multifaceted problems ranging from corruption in both high and low places, severe infrastructure deficit, a struggling economy, insurgency and banditry in the north. Most of these problems particularly from an economic and security perspective have been attributed to the nation’s porous borders.
The government blames its neighbors for breaching ECOWAS protocols on free trade and movement by not doing enough to stop dumping of goods imported via their ports in Nigeria. Government officials particularly the President, Muhammadu Buhari, Minister Of Finance and Budget Zainab Shamshudeen, Government Spokesman Alhaji Lai Mohammed and Custom’s Strongman Colonel Hammed Ali have all spoken in glowing terms of the positives of border closure not just for the economy but also for national security.
Even support has come from some very unlikely quarters as former Head of State and a virulent critic of the President Muhammadu Buhari Administration, General Olusegun Obasanjo has lent his voice in support of the border closure.
Some of the positives that they associate with the border closure include the reduction in the influx of prohibited firearms into the country, which hitherto had been a source of concern due to the increasing security challenges facing the nation. However, one is forced to ask, for likely seasoned arm smugglers, are the land borders the only route they know?
Another is the supposed drop in consumption of imported rice, which finds its way into the country via the land borders after presumably landing in the ports of Cotonou in the Benin Republic and Douala in Cameroun. Some imported rice also gets allegedly smuggled in through the frontier with the Niger Republic and Chad.
Arguably, most of the imported rice consumed in Nigeria is received at the aforementioned ports (Cotonou and Douala) due to the efficiency of their ports as well as lower tariffs. They are then seemingly smuggled into Nigeria in compliance with compromised customs officers and find their way into Nigerian markets.
According to the government, the period after the announcement of the closure of Nigeria’s land borders marked a sharp surge in the amount of local rice being consumed in the country. The government has been promoting local consumption of Nigerian rice as a way of encouraging rice farmers who before now had been reluctant to cultivate rice due to competition from the more popular imported variant.
Another benefit is the increased patronage of locally groomed poultry products. Just like imported rice, imported frozen poultry is a favourite on Nigerian dining tables. With the border closure, most poultry farms according to the government are witnessing a boom and these means more money for the farmers, more locally made jobs and increased foreign exchange savings as a result of importing poultry from elsewhere. They also opine that the “drop” in banditry and Boko-Haram attacks was as a result of the border closure as logistics that used to freely get to the bandits and insurgents have been cut off, and they are now in short of supplies.
Laudable as these benefits may seem, the border closure has had some excruciating effects on the Nigerian masses particularly as Christmas is approaching. In Nigeria, just as it is the case in other climes, Christmas is a period of increased spending as people shop in bulk for items that will make the Christmas holidays worth their while. Price of staple food items which are mainly one of the prime objects of these shopping sprees have increased as evidenced in the increasing levels of food inflation in figures presented to the public by the Nigerian Bureau of Statistics (NBS).
The food inflation rate rose from 13.5% in September to an 8-month high of 14.09%, while general inflation rate, rose from 11.24% in September to 11.61% in October. Government officials have labored to downplay the sudden increase in inflation and not link it to the border closure. Nevertheless even an elementary economist knows that this sharp rise can only be attributed to the border closure. Nigeria has a large population and lack of incremental spending in the agricultural sector over the years has placed the country in a position where she can barely feed herself with food grown within her borders.
Most of the food imported to augment what is produced locally comes from her Western African neighbors. With the closure of the nation’s borders, there is now a lacuna, which is now creating shortages leading to the sharp rise in the price of staples like wheat, rice, sorghum, cowpea, millet and maize.
What this means is that the average Nigerian family will now have to spend more in spite of the fact that there is no significant increase in their earnings. The purchasing power of the average Nigerian citizen will be adversely affected during this yuletide period because they will now have to settle for less or consume less of the qualitative products they consumed before.
Presently the price of a 50 kg bag of local rice is between N15, 000 and 23000 naira depending on location. The imported variant that makes its way into the country goes for between 26000-30000 naira. This is a sharp increase from the pre-border closure prices and if not contained may rise further.
From all indications, if the government does not intervene, then this yuletide holidays for Nigerians will indeed be a gloomy one notwithstanding any long or short term benefits accruable from the prolonged closure of the Nation’s land borders.
Nnamdi Gabriel, the author of this post is a Public and Policy analyst with a burning passion for the restoration of Nigeria as the Giant of Africa.