The closure of land borders ordered two weeks ago by the federal government has exerted unintended consequences on the prices and availability of some food items in Nigeria.
The prices of such staples as rice, frozen chicken, frozen turkey and groundnut oil, which often find their ways into the country from neighbouring Economic Community of West African States (ECOWAS) countries via the borders have skyrocketed as they become scarce in the local market.
Following this development, especially the closure of the Nigeria-Benin Republic border at Seme by the Nigerian authorities over alleged smuggling activities along that corridor, the final consumers of the affected commodities have lamented the biting effects of the federal government’s action, which according to them, has spurred acute dearth of the items and triggered increase in the price of the food items.
Similarly, the situation with traders, particularly the middlemen in the distribution value chain of the food items, is not any better.
According to Taofeeq Adeniran, one of the traders dealing in frozen turkey and chicken at Mile 12 market in Lagos State, the closure of the borders has led to a lull in activities in the market as the commodities are not available for them to sell.
He said, “Since the closure of the border, frozen turkey and chicken have become extremely scarce commodities in the market. Without the importation of these items, Nigerian processed ones are not enough to meet the market demand, and beyond this, the prices have gone up.
“A pack of the Nigerian chicken that used to cost about N7,900 before the border was closed now sells at N11,000. Also, local processors of frozen chicken and turkey have not been able to meet demand. Since, whenever we demand for 100kg of chicken, they are only able to supply maximum of 30 percent,” he said.
Adeniran further explained that due to this difficulties, the price for one kilogramme chicken has jacked up by 50 percent from N1,000 to N1,500; adding, “this has turned customers away from us and on daily basis now, we experience declining sales as we do not have enough consignment and even the little we have comes at higher prices.”
Speaking in the same light, one Sunday, the owner of De Sun Enterprises, selling rice at the Mandela Garage, bemoaned the ripple effect of the border closure on his business.
Speaking with business a.m., he said since the importation of foreign rice had been affected in the wake of the closure of the Seme border, the prices of both local brands and the foreign ones still available in the market have skyrocketed.
As Sunday showed our reporter about two dozens of foreign brands of rice in his shop, he lamented that he had not been able to sell them because the price has increased by about 40 percent and is now beyond the reach of many Nigerians.
“Once you tell the customers, for instance, that one De Rica of the rice that used to sell at N250 is now N350, they quickly turn away and start thinking about other options they have.
In the last two weeks, I’ve just been coming to open the shop without any sales till the market closes in the evening. This has been frustrating,” Sunday lamented.
He added that effort to divert their market operation to local brands of rice has not been totally successful partly as “the customers do not go for them because they are less tasty compared with their foreign counterparts.”
Also, he said the available locally produced rice brands are not enough to serve the teeming market.
“To buy the local rice requires that traders pay upfront and wait for a week or two before you can have your goods.
This comes with so many difficulties and uncertainties. The people who have paid for more than one week now have not got their goods delivered and should things continue this way, I think I will need to start thinking about what other business I need to do to survive.
“The made-in-Nigeria rice brands have not been easy to get just like the Lake Rice once introduced. Then, you were required to pay at the bank first, then take the receipt to a local government office to collect your goods. This our business cannot be run like that. You wan to sell and buy and sell again without any delay,” Sunday explained.
Sunday beseeched the government to save their business by putting measures in place to ensure that the local production of the commodities are improved and competitive before taking actions that leads to partial or total ban of imported rice and other staple foods.
Checks by business a.m. show that Nigerian brands of rice such as Mama Gold and Labana Rice have increased in price from initial N14,500 to N16,500, reflecting a growth 13.8 percent, while the imported ones popularly referred to as Cotonou rice have also soared significantly.
According to traders, the imported brands now sell at 42.9 percent higher at N20,000 from N14,500 before the closure of the border.
The instance is the same with imported groundnut oil which is scarcely available in the market and at a higher rate. Business a.m. gathered that the 25 litre size of the item that used to sell at N8,300 before has inched up to N10,800 on the average, even with the propensity of becoming costlier as the border remains closed.
Meanwhile, a wholesaler of rice who spoke to Business a.m. on condition of anonymity challenged the pricing of the Nigerian rice brands.
According to him, “On a typical day, a bag of foreign rice brand is bought N9,000, transported with N2,500 and is cleared by the Customs Service at N2,000, you have it delivered at around N14,000. This is far less than the prices of the so-called local rice brands. I think we do not yet have what it takes to be self-sustained when it comes to a staple like rice. We need to do more locally because we still depend largely on foreign supply of the commodity.”
It will be noted that while both traders and consumers have continued to lament the closure of the borders because of its ripple impact on the prices and availability of certain food items, the borders were closed in the first place as a measure to fight pervasive insecurity in the land by the Federal Government.
This action has however made cross border transactions more difficult between Nigeria and neighbouring ECOWAS nations.
The Nigerian Customs Service had explained that the exercise was part of measures to secure Nigeria’s land and maritime borders.
Frontpage November 12, 2017
Frontpage December 5, 2017