Border Closure: Answering the Tariff Question

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Aside the impact on food inflation, the continued closure of Nigeria’s land borders goes against the Economic Community of West African Countries (ECOWAS) free movement between member countries and questions the government’s commitment to the AFCFTA free-trade agreement, which it reluctantly signed up to in July this year. The government may also do well to review the prohibitive tariffs that fuel smuggling, writes Eromosele Abiodun

Over two months ago, precisely on August 19, 2019, the Nigerian Customs Service (NCS) announced that it will, in collaboration with the Nigerian Immigration Service (NIS), the Nigeria Police Force (NPF) other Armed Forces as well as other security and intelligence agencies be conducting a joint border security exercise, codenamed, “EX-SWIFT RESPONSE.”

Customs Public Relations Officer, Joseph Attah, who made this known in a statement stated that the exercise was part of measures to secure Nigeria’s land and maritime borders.

The joint exercise, he stated, was being coordinated by the Office of the National Security Adviser (ONSA) and will take place in 4 geopolitical zones, namely; South-South, South-West, North-Central and North-West.

According to him, “It is expected that the exercise will promote interagency cooperation and increase preparedness to address trans-border security challenges such as terrorism, armed banditry, smuggling, proliferation of small arms and light weapons, amongst others.

“The exercise will also involve the movement of personnel, vehicles and equipment within the affected parts of the country. Therefore, we call on members of the public not to panic and should continue to engage in their normal duties. The overall objective is to ensure a peaceful and secured country in the interest of our National Security.”

However, things took a different twist a day or two after the customs announcement when President Buhari in faraway Japan during the 7th Tokyo International Conference for African Development (TICAD7), announced to the world that contrary to what the customs claimed, the borders were closed because of rice smuggling. Meanwhile, neither Buhari nor the NCS has said when the borders will be re-opened.

Unanswered Questions

This has led to many questions been asked in many quarters as to what the government want to achieve with the exercise given that if the border is re-opened today smuggling will continue even on a higher scale. Stakeholders have therefore stressed that rather than close the border indefinitely, the government should remove the incentives that encourage smuggling. Experts have argued at several forum that government was encouraging smuggling with its prohibitive tariffs. It is not only rice that attracts crazy tariff, Nigeria’s automotive policy has the unenviable record of some of the highest tariff anywhere in the world. The same thing goes for Nigerian ship-owners.

The President of Nigerian Ship-owners Association (NISA), Mallam Aminu Umar, told THISDAY last week that Nigeria’s flag administration do not exist because of the federal government punitive tariffs. According to him, “You cannot buy a vessel and flag it Nigeria because the government will go after you with all manner of tariffs. It may interest you to know that foreign vessels don’t pay these charges. So why will anyone think of carrying the Nigerian flag? It will also interest you to know that 80 per cent of the cargoes in West African ports are Nigerian cargoes. But shippers prefer to do transshipment because the government policy is such that you are charged a huge tariff when the cargoes come first to Nigeria.”

An auto dealer also told THISDAY recently that car smuggling was lucrative because of the tariff imposed on car importation.

Specifically, he said, “To clear a Land Cruiser today, you need N15 million, a Prado, N16 million and a G-wagon N21 million. Where in the world do you impose 75 per cent tariff on cars imported into your country when your next door neighbor has tariff of about 7 per cent.”

It is not just consumers that are suffering the high tariff of rice. Terminal operators are the worst hit. When the ports were concessioned in 2006, the government factored rice, cement and sugar into the charges to be paid by the concessionaires. But since the policy of ban on importation of cement, sugar and rice, items which forms bulk of cargos that come to the terminals, they are required to stick with the initial agreement. The issue of rice that the president said led to the border being shut did not start yesterday. It has been a thorny matter that was allowed to fester until it got out of hands. Like the auto, cement and others, Nigeria has the highest tariff on rice importation anywhere in the world.

As a matter of fact, rice importation through the land borders is prohibited. As against what was obtainable in the past, the Central Bank of Nigeria (CBN) no longer issue Form ‘M’ for rice importation as rice is among the 41 items that cannot access forex through the official window. To encourage local production, the government imposed 100 per cent tariff on rice imported into the country, this is what the smugglers are taking advantage of. In 2014, the government of Benin lowered its tariff on rice imports from 35 per cent to 7 per cent while Cameroon imposed zero tariff on rice imports from 10 per cent initially. Experts have also argued that the border closure goes against the Economic Community of West African Countries (ECOWAS) free movement between member countries. The federal government’s action experts say questions its commitment to the AfCFTA free-trade agreement, which it reluctantly signed up to in July this year.

 Jibia Border Question

Meanwhile, despite the closure of Nigerian land borders by the federal government in the last three months, smuggling still persists at the border between Nigeria and Niger Republic, THISDAY investigation has revealed.

THISDAY gathered that at the border between Jibia in Katsina State and Niger Republic, smugglers have resorted to the use of illegal routes to ferry in bags of foreign rice, bales of second-hand clothing and other contrabands.

But the NCS has dismissed the observation, calling for either a photograph or video evidence to prove the allegation. NCS also said it would be impossible for smugglers to operate at any of the country’s borders.

The Public Relations Officer (PRO) of the Nigeria Customs Service, Joseph Attah, said it would be impossible for smugglers to move around easily in any Nigerian border because of the security presence at the borders.

He said officers manning the borders were drawn from security services, which include the police, air force, army, Customs and the Department of State Services (DSS).

Investigation revealed that while strict compliance appears to reign at the main border post between the two countries, illegal businesses still thrived at some bush paths and sundry illegal entry points where unscrupulous security operatives, work hand-in-glove with smugglers to smuggle contraband goods into the country

But when THISDAY visited the border town of Jibia, it was observed that there were some illegal routes that commercial drivers and motorcyclists were using to transport goods and passengers into the country.It was gathered that rice smugglers were also taking advantage of the lax security to bring their wares into the country, but at much higher price than before.

Some of the illegal routes the smugglers used to ferry in the contrabands from Niger Republic to Jibia Local Government Area of Katsina State include Sabon Gari, Dan-Harau, Alele, Makada and Maidabaro roads despite heavy security at the borders. The smugglers, it was learnt, go through the laborious route of offloading the contrabands few meters away from the official border security post and use J-5 buses, Gulf 4 and 5 vehicles and motorcycles to ferry the items from their hideouts into Jibia for onward transportation to their warehouses in Katsina, Kano, Kaduna, Zamfara, Jigawa States and some other parts of the country.

Residents of the border town told THISDAY that the smugglers were being aided by security personnel, including soldiers, policemen, Customs and immigration officials, who allegedly collected money from the smugglers to allow them a free passage at the 13 checkpoints between Jibia and Katsina metropolis.

A motorcyclist involved in smuggling, who pleaded anonymity, told THISDAY that those of them engaged in the business understood the risks and dangers involved, but affirmed that they would not encounter any problem unless they refused to cooperate with security operatives at the checkpoints.

“Unless one refused to pay the bribe for each category of items or when it is time for the officials to sacrifice you to prove that they are working – that is when they will arrest you in the name of smuggling,” he explained.

A commercial driver simply identified as Sule, who specialised in smuggling, said business had been booming for them because they do convey a bag of rice from Maradi (Niger Republic) to Katsina at the cost of N3,000 each.

“We used to charge rice merchants N3,000 for each bag of rice carried from Maradi to Katsina State. Although, we do follow bush paths and sometimes custom officers do arrest us. But once we give them some monies they allow us to pass even though some of them are very stubborn,” he stated. He, however, lamented that the border closure had contributed negatively to the socio-economic imbalance of the state and the country in general.

When contacted, the NCS Commander in charge of Sector 4 Command of the National Border Drill Operation, Bashir Abubakar, said about 50 suspected smugglers had so far been apprehended and 14 trucks of contrabands intercepted.

He lamented that Jibia border has always been one of their major flashpoints since the commencement of the operation two months ago because of the “mental behaviour” of the inhabitants of the area. “We have seen that people of that area are not in good terms with government security agencies and it has been a history,” he added.

On the allegation that his officers were extorting money from smugglers, Abubakar said: “I will not say yes, it is true, but at the same time I will not deny because we are all human beings and there is no Nigerian that changes name in terms of issues of integrity and character.

“Think of anywhere in the world, there are bag eggs and good eggs. The same thing applies to various agencies in Nigeria – both government and private agencies, but anyone found wanting will be punished.”

He added that lack of adequate operational vehicles and banditry has affected their ability to carry out the operation in all the villages in the state.

The Sector 4 Command of the National Border Drill Operation covers Jigawa, Kano, Katsina, Sokoto, Kebbi and Zamfara States. Officers on the joint exercise were drawn from the Nigeria Customs Service, Nigeria Army, Nigeria Immigration Service, DSS and Nigerian Air Force.

 Rising Food Prices

The action has resulted to a spike in food prices. According to the National Bureau of Statistics (NBS), the annual consumer-inflation rate rise to 11.2 per cent in September, after falling to a 3 1/2-year low in the preceding month, food-price growth accelerated for the first time in four months, rising 1.3 per cent from August.

A sample of trading activity in major market revealed that prices of some basic food items have skyrocketed, with traders and consumers complaining of limited stocks. Frozen poultry is the most affected in Lagos as a kilogramme of frozen chicken, which sold for N1,200, now costs N1,600 while a kilogramme of frozen turkey now sells at N1,700. A trader at Alaba Rago, a major market in Lagos, Tawa Ibrahim, said that the border closure was affecting his business.

She said: “Lake Rice (locally produced rice) would have been a better alternative for us, but we are not getting it to buy… Even the volume of okra needed to feed this nation cannot be produced in Nigeria. We rely so much on Cotonou for okra. That is why its price has also shot up since the border was closed. A big basket of okra, which sold for N4,000 or N5,000, is now N8,000.”

Also, in Kebbi, the closure of borders with Niger and Benin Republics is already causing economic hardship to people around the border areas of Dole Kaina, Lolo, Kamba, and Bachaka.