The Federal Government’s plan to shut one of the nation’s land borders, over the incessant smuggling of foreign rice into the country, is a commendable effort. The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, who announced the plan, said the decision would help to consolidate on the gains of government’s fiscal policy, which had reduced rice importation from South-East Asia by more than 95 per cent in the past two years and increased the number of local rice farmers from 5 million to 30 million.
Although Ogbeh did not mention the land border to be shut, he may be referring to Seme border, which links Nigeria with the Benin Republic. The minister had decried the attitude of the neighbouring country, which, he said, was adversely affecting Nigeria’s economy and the investment in local rice production.
The Federal Government’s protectionist measure to check the smuggling of rice is appropriate. In fact, no responsible government opens its borders for unbridled importation and smuggling of goods such as rice that can be produced locally at comparatively less cost. Statistics show that Nigeria has an outrageous annual rice import bill of N356bn.
The nation’s rising rice import bill is an indication that local producers are contending with stiff foreign competition. Therefore, government’s decision to shut the land border is welcome. According to the Rice Millers, Importers and Distributors Association of Nigeria (RIMIDAN), over 2 million metric tonnes of parboiled rice were smuggled into Nigeria last year. The association said that the smuggled rice came through the borders with Benin Republic, Niger and Cameroon.
Without doubt, smuggling remains the biggest threat to rice production in Nigeria. Data from the Economic Community of West African States (ECOWAS) indicates that over half of the rice that Benin Republic imports is sold into the Nigerian market despite the restriction placed on rice and other items in 2016. The government’s protectionist measure of 2016 encouraged the local production of rice to the extent that some state governments, supported by the “Anchor Borrowers” policy of the Central Bank of Nigeria (CBN), embarked on massive rice production. This is part of government’s measure to make Nigeria self-sufficient in rice production by the year 2020. During the five-month period when the importation was allowed, a total of 24,992 metric tonnes of rice valued at N2, 335, 131, 093 were imported through the land borders.
The government’s directive to shut the unnamed land border may not be unconnected with recent reports from Customs and Immigration border commands, which indicate an upsurge in rice smuggling and dwindling revenue from customs duties. The recent World Bank report on smuggling in Nigeria stated that $5bn worth of different goods, including rice are smuggled into Nigeria annually through Benin Republic alone. The report further revealed that the Nigeria Customs Service (NCS) loses over 25 per cent of projected revenue yearly due to activities of smugglers.
While the decision to shut the border is a step in the right direction, strict enforcement of the order is crucial. Such enforcement will send strong signals to smugglers that it is no longer business as usual. It will also reduce the appetite of many Nigerians for foreign rice and make local rice growers work harder.
To ensure that the closure of the border achieves its objective, the government should make sure that the recent approval of N1.12bn for the purchase of operational “anti-rice smuggling” vehicles is judiciously used. Besides, government should continue to provide huge subsidies to rice farmers and processors as done by governments of South-East Asia such as Thailand and India. That will bridge the price differential between local and foreign rice and encourage its patronage by Nigerians.