- Traders, consumers lament
- We record daily loss of $1m over action – OPS
By AYOOLA OLAOLUWA
The closure of the nation’s land borders by the Federal Government has started to cause widespread disruption to economic activities in the Southern part of the country, Business Hallmark findings can reveal.
The Federal Government had on Tuesday, August 20, 2019, restricted movements of humans and goods in its borders spread across 28 states of the federation, causing serious inconvenience to citizens of both neighbouring countries.
According to the government, the joint border security, code-named ‘Ex-Swift Response’, ordered by the government was aimed at securing Nigeria’s land and maritime borders. The exercise is being jointly conducted by the customs, immigration, police and military personnel, and coordinated by the Office of the National Security Adviser (ONSA).
The government had explained that it embarked on the joint security measure to curb smuggling that is threatening the country’s attempt to boost local food production, and to forestall the influx of illegal ammunitions and undesirable elements. Businessmen and women affected by the shutdown, while expressing their anger and deep displeasure over their ordeal, had asked the government to relax the restriction.
However, BH findings indicate that the unannounced restriction has taken a heavier toll than previously expected on hapless Nigerians and the nation’s economy. Checks revealed that while prices of commodities, particularly consumables, have significantly gone up in the southern part of the country, particularly in the South West, due to the effect of the border closure, business outfits are also reeling from the effect of the closure, with many of them unable to deliver their goods to neighouring West African countries.
A survey by BH in some major markets in Lagos State last between Monday, September 2 and Thursday, September 5, showed that prices of both foreign and locally-produced goods have jumped up due to the law of demand and supply. Traders who spoke with our correspondent cited the closure of the borders as the main reason for the hike in the prices of goods such seasonings, rice, noodles, frozen foods (chicken, turkey and fish), groundnut oil, and beverages and stockfish, among others.
Before the closure of the borders, particularly the Seme (Lagos State); Idiroko (Ogun State); Saki, Sikanda, Kabo (Oyo State), food items, particularly rice, imported frozen chicken (popularly known as Orobo), turkey and gizzard, were regularly smuggled into the country through the Republic of Benin.
At the popular Agege, Ogba and Ile-Epo Markets, a 50kg bag of imported rice that used to sell for between N14, 000 and N15, 000, now sells for between N19, 500 and N21, 000 as of Thursday. The development, however, affected the price of local rice, with a 50kg bag of which used to be between N12, 000 and N13, 000 has now increased to between N17, 000 and N18, 000.
At the Oduwoye Market in Mushin, it was observed that the price of a 50kg bag of rice is slightly lower. However, there has been a N3, 000 increase in the price of the commodity, compared to what it was before the border closure. While a bag of foreign rice at the market sells for between N18, 500 and N19,000, the same size of a local goes for N16,500.
A Derica measurement that used to be between N220 and N250 is now between N280 and N320.
Also, checks show the price of vegetable oil has also gone up in Lagos markets. For example, a 5-litre keg of the Cotonou-made Shivia, which used to sell for N1, 600, is now N2,200, while a 25-litre keg of Shivia groundnut oil sold for N10,200 now sells for N12,500.
At the popular Bodija Market in Ibadan, Oyo State, a 25-litre keg of imported vegetable oil which was sold for N9, 400 before the border closure now goes for N13, 500.
Meanwhile, frozen foods appear the most affected, as a kilogramme of frozen chicken (Orobo), which sold for between N1,200 and N1,300, now costs between N1,600 and N1,800, depending on the location, while a kilogramme of frozen turkey now sells for between N1,800 and N2050, up from N1,600.
A 10kg carton of chicken which was N9, 500 before the border restriction, sold for between N14, 000 and N18, 650 last week at the Agege, Ikeja, Mushin, Ogba and Ikorodu Markets. Further findings revealed that other staple foods like spaghetti, crunches, beverages, seasonings, and pastries were affected. A small sachet (25 cubes) of Maggi, China made Chicken Flavour, Royco seasonings, with the price tag of N100, now sell for between N120 and N150.
However, it was observed that beans has not experienced a price increase unlike other staple food items, as the price remains the same, compared to the preceding weeks. While the selling price of a bag of beans remains N14, 800 at the Agege Market and N14, 000 at the Ile-Epo Market, a Derica cup measurement still goes for between N120 and N250, depending on the brand. Also, the survey revealed that the prices of salt, sugar and palm oil remain as they were
Checks at markets in the coastal town of Badagry in Lagos State indicated that the exercise which started on August 21 had resulted to restriction in the movement of some basic food items across the borders. At the Agbalata International Market, Badagry, a 50-kilogramme bag of rice, which hitherto sold for between N11, 500 and N12, 500, now attracts between N20, 000 and N22, 000.
Similarly, prices frozen chicken and turkey had increased, compared to what obtained a week ago. A carton of frozen chicken that sold for N9, 000 on August 19 now sells for between N12,000 and N14,000, while a packet of frozen turkey that sold for N8, 500 weeks ago is now being sold for between N11, 500 and N12,500.
In the same vein, a basket of small dry fish sold between N8, 000 and N10,000 last market day now goes for between N15,000 and N17,000.
A basket of big dry fish sold between N18, 000 and N20, 000 at the last fish market day now attracts between N26, 000 and N30,000, depending on the bargaining power of the buyer. A fish trader, Mrs. Funke Kuponu, attributed the increase in the price of fish to the joint border security exercise, adding that most of the dry fish were brought in from the Republic of Benin, Togo and Ghana.
“The sellers from other countries coming to sell dry fish in Badagry market are being sent back because they do not have valid travel documents to enter the country. We go to their countries to sell our own fish too; but the restriction has really affected everybody here.
“Many people coming from other states to buy dry fish in Badagry were disappointed when they saw few sellers displaying their fish. The few sellers that came through the water have doubled their prices; things are very hard now; the presence of the task force has affected our means of livelihood here in Badagry.
“We appeal to the task force to allow the fish sellers and other petty traders to come to the market to sell their goods because fish is not contraband,” the woman said.
At the Ajara New Market, the prices of fruits such as apples, cucumber, oranges and plantain had increased, compared to the prices they attracted some days back. Chairman, Community Development Committee (CDC), Badagry Local Government Area, Mr. Ebenezer Kuponu, appealed to the residents to patronise local fruits.
Kuponu said that the non-availability of fruits from the Republic of Benin had resulted in hike in the prices of the commodity in the market in Badagry.
According to him, the fruits produced in Nigeria are more nutritious than the ones being smuggled into the country from Benin Republic. A visit to the Nigerian side of the Seme border revealed that many travelers and vehicles were stranded for hours at the border post as a result of the exercise. It was observed that the travelers were being thoroughly searched by the security personnel drafted to the area.
At the Sango Market in Ogun State, a bag of 50kg of rice now cost N19, 000 as against N14,500 that it was sold before the closure of the borders. Similarly, price of other foodstuffs increased in the market, the price of 25kg of vegetable oil increased by just N400 from N10, 500 to N10,900.
Some economic experts, who spoke on the possible effects of the border closure, warned that the nation might soon witness a food crisis. The Director, Turgot Centre for Economic Policy Research, Nonso Obikili, said the restriction is certainly counterproductive.
“Nigeria currently does not grow many of the key food products we consume and such a restriction will likely have the dual effect of higher food prices and increased smuggling,” he said.
Another respondent, Dr. Tunji Onibonoje, said the Federal Government should have put in enough mechanism to produce food on a large scale before condemning Nigerians to imminent hunger by restricting access to foreign exchange and border closure.
According to Onibonoje, who is a lecturer at the Osun State University, Osogbo;
“We can’t produce enough food, yet the government is closing our borders to food imports and restricting access to forex to buy food items for Nigerians to feed on. The closure of our borders and banning access to foreign exchange at official rates to import food without supporting farmers and creating an enabling environment to produce food on a large scale is condemning Nigerians to hunger.”
Members of the Organised Private Sector (OPS), including manufacturers and the Lagos Chamber of Commerce and Industry (LCCI), however decried the continued closure of the nation’s border for a drill, citing that goods meant for export to other regional markets were trapped on the corridor.
The Director General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, in his reaction, stated that the government ought to be more strategic and tactical in dealing with problems of this nature. He disclosed that goods belonging to some members of the food, beverage and tobacco sub-sector of the Manufacturers Association of Nigeria (MAN), who are involved in export, are currently trapped at the Seme Border.
He lamented the weekly loss of at least $1million from the export business per operator, noting that a minimum of five trucks from each of the manufacturers are currently stuck at either side of the border.
“The border closure is a simplistic solution to a complicated, broader and multidimensional problem. We should develop the culture of tackling the causes of problems, not fighting the symptoms. This is the way to solve a problem sustainably.
“One of the critical challenges we face as a nation is that of weak state institutions. This is what has manifested in the escalation of the phenomenon of smuggling. It is regrettable that innocent citizens that are struggling to make a living are now being made to pay the price for lapses of ineffectual institutions of the state.
“The truth is that government agencies at our borders have not lived up to their mandates. It is impossible for the scale of smuggling being reported to take place without the connivance of state officials at the borders. The starting point in dealing with this problem is to get the state institutions to do their job.
“Border closure does not offer a sustainable solution. It only penalizes small players in the informal sector. It also disrupts the supply chains and exports transactions of many big firms that do business across the sub-region. The cost of this closure to businesses is evidently phenomenal and would be in billions of naira. It also has implications for the confidence of investors as well.
“Scanners at the nation’s borders and seaports have not functioned for over a year. We should deploy drone technology and strengthen intelligence. Above all, we need to deal with people’s issues. The system should hold relevant institutions and their leaders accountable for lapses in the discharge of their duties”, Yusuf added.
Also speaking, the President, Manufacturers Association of Nigeria (MAN), Dr. Mansur Ahmed, said although the government might have good intention of protecting businesses in Nigeria, it must also ensure that the action did not affect Nigerian entrepreneurs operating genuine business on along the nation’s borders.
“The Federal Government may have good intention for the partial closure of the Nigeria-Benin border, but it must be done in a way that entrepreneurs and manufacturing concerns that carry out genuine business along that corridor are not adversely affected.
“If this is not well managed, it may lead to prices of some items hitting the rooftops, as we are currently witnessing. So, the exercise must be carried out with the necessary caution,” Ahmed said.
Speaking to BH, Public Relations Officer (PRO) of the Nigeria Customs Service (NCS), Deputy Comptroller Mr. Joseph Attah, said the exercise was not targeted at anybody or any region in the country, but to right the wrongs of the past.
‘The truth of the matter is that the border is not closed. What is happening is that people are seeing a higher security screening. People, who feel they should be free to move in and out, and who may probably have been taking advantage of the porous borders, are now seeing security agencies, the manpower is boosted and every nook and cranny is definitely being policed.
“What we are doing has blocked the chances of smugglers who are supplying substandard items at reduced prices which may not conform to the approved standard and quality.
“The exercise has led to the arrest of several illegal migrants while over 4,000 bags of substandard rice and thousands of bails of fairly used clothes have been impounded by the Joint Task Force.
“Nigerians should be happy at the exercise and support the fight as we can no longer condone illegalities. The team is working in synergy with the people regardless of their civic responsibilities.”