Borders’ Closure: Customs, Manufacturing exporters, Nigerians count their losses

   BY GODWIN OBI

 Irked by the activities of unrepentant smugglers who ply their illicit trade from different border towns, including Seme, a major border crossing between Nigeria and Benin Republic, the federal government ordered the closure of the border about a fortnight ago. Expectedly, Nigerians and others doing businesses in West Africa's main commerce corridor have continued to count their losses. GODWIN OBI reports.

Hitherto lively with activities, the Seme border, the busiest land crossing from Nigeria to the rest of West Africa, including Benin Republic, is currently a ghost town, no thanks to the presidential order on cross-border movements.

Our City Editor’s visit to the Seme Krake border community revealed total disappearance of an environ usually overexcited with activities .

The Nigeria Customs Service admitted losing over N500million revenue to the border closure while Truckloads of manufacturing items belonging to Dangote, Cadbury and Uni-Lever have remained trapped at the border, incurring demurrage. Nigerians in commerce lamented that the border closure has further impoverished the trading public.

The borders were shut on August 21, following the interception of some truckloads of prohibited tramadol and codeine in Lagos on August 16.

Observers have noted that with the tighter border surveillance nationwide, business people and travellers have continued to count their losses just as the unwholesome security measures being taken by the government has stalled business deals with other neighbouring countries.

Nigeria's manufacturing exporters are also counting their losses as the ill-advised closure of Seme border between Nigeria and Benin Republic has done more damage than good to their businesses.

Many of them told National Light that their raw materials were stuck at the border, incurring demurrages and crippling production at factories.

They added that it crippled their export transactions, thereby hurting projections and putting them in more jeopardy.

Ede Dafinone, chairman, Manufacturers Association of Nigeria Export Group (MANEG), said the losses that will be incurred by genuine exporters will further cut Nigeria's non-oil export projections.

 'I understand that the government has closed the borders in order to catch those who are smuggling various goods, especially rice into Nigeria.

“If this is indeed true then it is unimaginable that a solution could not be found to this problem that did not penalise all genuine traders (importers and exporters alike) for the sake of catching those smugglers operating through the land borders,” he said.

“Who will be responsible for the additional demurrage to be paid or on the perishables that have now spoilt? The government would not be closing all banks because of the discovery of bank fraud and similarly should not close all land borders to catch those that are smuggling,” he reasoned.

President Muhamadu Buhari, on Wednesday, August 21, ordered the closure of the Seme border between Nigeria and Benin Republic to check smuggling of rice and wheat.

Analysts wonder why such an ill-advised step could be taken without paying attention to its hazardous implication.

Muda Yusuf, director general of Lagos Chamber of Commerce and Industry (LCCI), said the action does not address the lapses in state institutions that should check smuggling, leaving innocent citizens to suffer.

“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,” Yusuf said.

A manufacturing exporter, who did not want her name in print, said the closure will likely erode her margins at the end of the financial year.

“When you close borders, you prevent inputs or raw materials from coming in. They stay there for 'no-one-knows-when' and incur demurrages. All these are costs,” she said.

“Those that are exporting goods through the land borders will also have problems. So, where is this taking us to as a nation, especially when all businesses are facing challenges due to economic mismanagement?” she asked.

Buhari's policies to force home-grown production of food without the right conditions continue to fuel poverty and strain economic growth, analysts say.

The border closure is constraining trade which contributed about a fifth of Nigeria's GDP at 17.16 percent in 2018 and breeding untold hardship to small businesses who depend on cross-border trade to survive.

“The closure of the border without any formal notice to businesses and companies who use the corridors further imperils Nigeria's ease of doing business ranking,” said Vincent Nwani, an investment and business consultant based in Lagos.

Nwani said that Nigerian borders cannot be closed by a mere order without any protocol and despite a subsisting West Africa Trade Protocol Agreement that allows for mutually opened borders. It poses both economic and reputational risks for the country.

Our investigations revealed that prices of rice and other commodities like groundnut oil have jacked up just as perishable items worth millions of naira are currently rotting away as fully armed security agents on constant patrol halt all sorts of movement across borders.

At the Idiroko border in Ogun State while some of the security operatives were seen strictly enforcing the presidential order on cross-border movement, hundreds of traders and immigrants were seen stranded at the border.

All the checkpoints on the road leading to the border were fully manned by the security agents with zero tolerance for smuggling. At the Ihunbo checkpoint, there was strict checking of vehicles, leading to the seizure of goods.

A trader, who simply gave her name as Chidera and who deals in hand-me-downs, otherwise known as second-hand clothes, said since the closure, survival has been tough.

“This is what I feed my family with. I sell in Cotonou but live in Nigeria. I go there every day because they also like to buy Nigeria-made products, but I don't understand this sudden closure,” she lamented.

Before now, a bag of rice was sold for about N11,000 at the border area and N15,000 in the metropolis. Investigation revealed that the commodity now sells for N17,000 at the border area.

 President Buhari had told his Beninoise counterpart, President Talon,  “Now that our people in rural areas are going back to their farms, the country has saved huge sums of money, which would otherwise have been expended on importing rice using our scarce foreign reserves, we cannot allow smuggling of the product at such alarming proportions to continue,”

Reacting to closure, the Association of Registered Freight Forwarders of Nigeria (AREFFN) said that closing the borders just for some time cannot achieve any meaningful result.

 In a statement, Mr. Ejike Metu and Mr. Innocent Elum, Chairman and Secretary respectively of the association's Board of Trustees (BOT) recalled that the clarification on why the borders were partially closed was to come in faraway Japan recently when President Muhammadu Buhari, while in a meeting with his Benin Republic counterpart, President Patrice Talon  over the issue disclosed that the Border closure was basically aimed at stemming the tide of rice smuggling into the country through the border post.

The statement observed that the action begs the question of why bags of rice have continued to find their way into the country illegally despite measures by government to contain the trend.

“We think that government should do a more thorough thinking to ascertain the fundamental causative factors and provide lasting solution”, it added.

The statement said,” AREFFN appreciates and commends the passion of the President Muhammadu Buhari-led administration in encouraging national self-reliance in rice production and general food security. We support and identify with government's strategic policies and programmes geared towards achieving the laudable objective.

“Thus we condemn in strongest terms possible the nefarious activities of the smugglers capable of stymieing the government laudable policy and align with any credible actions government might take to rein in the economic saboteurs.

“However, we believe that closing the border just for a month or more cann ot achieve any meaningful result. Indeed, the action begs the question of why the grains have continued to find their way into the country illegally despite measures by government to contain the trend. We think that government should do a more thorough thinking to ascertain the fundamental causative factors and provide lasting solution.”

On why rice smuggling had refused to stop, the statement read as follows; “The quantity produced locally at present is hardly sufficient to complement the imports and satisfy the demand of over 120 million Nigerians, not even with the smuggled ones. This explains its exorbitant price of between N17,000 and N18,000 before the border closure, and currently between N19,000 and N20,000 apparently beyond the reach of the poor.

“Instructively, the local ones appear nonexistent in the market and even if you are lucky to find it, it is almost the same price as the foreign one. We recommend that government adopts a gradual approach in implementing the rice policy to avoid creating more problems than it seeks to solve.

“Ban on importation of automobiles through the land borders:  Our investigation has revealed that a good number of the rice smugglers are inhabitants of the border communities who hitherto engaged in legitimate clearing of used vehicles, with many of them graduates of many years standing but with no jobs. We recommend that government should revisit and reconsider the policy.

“Porousness of the land borders: It is common knowledge that the nation's land borders, from North through South are very porous with over 1,400 illegal and ineffectively manned routes and waterways.  Very often customs officials and the smugglers clash on these routes, sometimes with casualties on one or both sides. This is usually reported by the media.

“It requires no deep imagination, therefore, to understand that the smugglers carry out their illegal activities through the unapproved routes and certainly not the official border that plays host to heavy and ubiquitous security presence.  Importers and other legitimate trans-border traders are those you find here processing their documentations with Customs, Immigration, etc. We recommend that government draft more security personnel to man the unapproved  routes, but should also bear in mind that smuggling is a global phenomenon that can be checkmated but perhaps impossible to do away with totally all at once.”

The statement further recommended that government should in future engage freight forwarders or non-government actors operating at the borders for information, advice and proper guidance before taking certain actions to avoid mistakes.