Wednesday, September 21Inside Business Africa

Nigeria sustains border closure amid inflation, diverse sentiments

• Neighbouring countries yet to comply with trade protocols
Expectations that the land borders may be reopened anytime soon should be shelved, as Federal Government, through the Nigeria Customs Service (NCS), has said it will sustain the ongoing drill till the desired goals are achieved, despite prayers by some manufacturers and businesses for concessions over goods stuck at the borders.

While farmers craved that the borders remained shut for as long as possible to continue to enjoy the monopoly in the local markets despite supply gaps, the Manufacturers Association of Nigeria (MAN), said the negative effect of the closure is far-reaching, and would linger even after the borders are reopened.

Similarly, the operators raised concerns about the continued border closure for the implementation of the African Continental Free Trade Area (AfCFTA), expected to kick off in July.

Besides, data from the National Bureau of Statistics (NBS), showed that the nation’s inflation rate increased from 11.98% recorded in December 2019 to 12.13% in January 2020. This is the highest rate recorded in the country since May 2018, which was 11.61%.

According to the NBS report, month on month, inflation rose by 12.13% in January, higher than the rate (11.98%) recorded in December, and 11.85% in November 2019.

Food inflation, a closely-watched component of the inflation index rose by 14.85% in January 2020, compared to 14.67% recorded a month earlier. On a month-on-month basis, the food sub-index rose by 0.99% in January 2020, up by 0.02% points from 0.97% recorded in December 2019.

Comptroller-General, NCS, Hameed Ali, while speaking at a stakeholders’ forum on border closure organised by the Lagos Chamber of Commerce and Industry (LCCI), in Lagos, yesterday, said Nigeria’s neighbours do not want to comply with the ECOWAS protocols on the transit of goods, adding that most of the goods imported into the countries were destined for Nigeria.

Ali, who was represented by the Assistant Comptroller-General of Customs, Mrs Kaycee Ekekezie, said the country has been able to record some gains since the closure of the borders. She explained, “Experience has shown that our neighbours do not comply with the ECOWAS protocols. The protocols on transit of goods demands that when a transit container berths at the seaport, the receiving country is mandated to escort same without tampering with the seal to the border of the destination country and hand over to the Customs officials of the destination country.

“Rather, they break the seals of containers on transit to Nigeria at their ports, and trans-load the goods on open trucks which belong to their country from where same is trams-loaded on to Nigerian trucks. Unfortunately, all previous efforts including provision of nine escort vehicles to them yielded no positive change.” She noted that Nigeria will continue to engage with neighbouring countries through diplomatic channels to ensure compliance on transit trade.

LCCI President, Mrs Toki Mabogunje, said the policy has had positive and negative implications for the economy with the trade sector currently feeling the backlash.

According to official statistics, the trade sector fell into recession in the third quarter of 2019, even as its contributions to the Gross Domestic Product (GDP) dropped by one per cent in the same period.

Mabogunje added, “On positives, we have seen appreciable increase in domestic rice and poultry product production. Fuel smuggling to neighbouring countries has reduced. The directive paid off for the Nigerian Customs Service, as revenue generated by the agency increased to ₦1.34trillion in 2019 from ₦1.2trillion in 2018.

“On the flipside, the closure of the land borders has triggered inflationary pressure through rising food prices. Food inflation continues to uptrend, hitting a record 14.7% in December 2019, which is the highest in 20 months. This policy pronouncement has also led to unplanned losses for manufacturers, especially those who export their products to neighbouring countries by road.”

The Director-General of MAN, Segun Ajayi-Kadir, represented by Director, Corporate Affairs, Ambrose Oruche, urged the Federal Government to revisit the policy and deploy scanners at the borders as well as other technology to ensure that genuine businesses do not close down as a result of the closure.

He cited some of the sectoral groups affected by the policy and how the effects are already being felt in the companies’ capacity utilisation levels and operations. Chairman, Lagos Chapter, All Farmers Association of Nigeria, Shakin Agbayewa, advocated indefinite closure of the borders for farmers to develop their local capacity.

Source: Guardian

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