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AfCFTA: Taming rice smuggling for economic growth

Importation of rice is still on the prohibitive list notwithstanding the take-off of African Continental Free Trade Agreement (AfCFTA) on January 1, 2021. Smuggling of this commodity through porous borders could deny Nigeria becoming a self-sufficient rice producing nation, Abdulwahab ISA reports

After a long lull, which delayed its initial take off, the African Continental Free Trade Area (AfCFTA) agreement finally commenced on January 1, 2021. Unarguably, AfCFTA is the largest trading bloc for Africa countries. No fewer than 54 Africa countries signed the Af- CFTA trade treaty signaling trading among countries in the continents.

Experts’ evaluation of the economic potential of AfCTA shows the continent will reap bountifully in terms of employment opportunities and economic growth. The agreement, experts said, could turn Africa into world’s largest free trade area by the number of participating countries and a 1.3-billion-person market if African countries fully operationalize trade agreement.

AfTCA has the potential to lift 30 million people out of extreme poverty and could help accelerate policies and trade reforms necessary to enhance long-term growth and create more jobs across the continent.

AfCFTA agreement requires members to remove tariffs from 90 per cent of goods traded, allowing free access to commodities, goods and services across the continent. According to the International Monetary Fund (IMF), the elimination of tariffs could boost trade in Africa by 15-25 per cent in the medium-term. The agreement is expected to create a $3.4 trillion economic bloc, connecting 1.3 billion people across Africa, which would make it the largest trading bloc since the World Trade Organisation (WTO) was formed in 1994. On November 11, 2020, the Federal Executive Council approved the ratification of the agreement establishing the African Continental Free Trade Area, ahead of the take-off in January.

AfCFTA and inherent opportunities for Nigeria

By her gifted population size of over 200 million, Nigeria holds the ace for having the largest market in African continent. The huge population size ought to be to her advantages. Regrettably, while the country is blessed with fertile and arable land for agriculture adorned with natural resources, the country imports sizeable items for her consumption from less endowed counties.

The importation of finished items has, over the years, turned the country into a dumping ground for assorted food items until current administration slammed closed the borders. Restriction on influx of items (food items and light weapons) from neighboring countries is to contain rising cases of insecurity and protect economic growth.

The borders were ordered shut in August 2019. After much persuasion from other Africa countries and in line with AfTCA agreement, the Nigeria government in December ordered immediate reopening of Seme crossing to Republic of Benin, Magatari and Illela crossings to Niger Republic and the Mfun crossing to Cameroun with a promise that all other borders to be reopened by December 31, 2020. The decision was taken in preparation for the take-off of AfTCA agreement take off.

Items on prohibition list

The Nigerian government has flung open her land borders after nearly a year. Notwithstanding AfTCA agreement, government said some items won’t be allowed through Nigeria borders. Federal Government insists last week that items like parboiled rice, frozen chicken, illicit drugs remain banned through Nigeria land borders. In effect, AfCTA agreement does not validate the restriction placed on such items. Chief Public Relations Officer, Nigeria Customs Service, Joseph Attah, affirmed government’s position in a statement. The statement quoted National Security Adviser (NSA), Major General Babagana Monguno (rtd), in a goodwill message to the transformed Operation SWIFT RESPONSE. Customs’ statement gave an overview of some seized of items. For instance, as at January 5, 2021, 1,401 irregular migrants were arrested, total seizures included 159,506.7-(50kg) bags of parboiled foreign rice; 10,447 bags of NPK fertiliser used for making explosives; 1,974 Vehicles; 895 motorcycles and 18,690.3Jerricans of Vegetable Oil, among other seized items.

The total monetary value of the apprehended items is put at N12.5 billion.

The current administration has committed huge resources through the Central Bank of Nigeria’s Anchor Borrowers’ Programme (ABP) in financing rice across product value chain. Prior to cutting inflow of foreign rice from less endowed countries into Nigeria, substantial portion of foreign exchange went into importation of rice, frozen chicken and assorted food other food items. Unfortunately, these were items Nigeria has comparative advantage to produce.

In furtherance of its support to making Nigeria sufficient in rice production and export left overs, CBN, in December 2020, set a target of one million hectares for rice cultivation 2020 dry season. The figure surpassed 5000,00 hectarage achieved in 2019 under ABP.

In addition to rice as focal value chain, the apex bank has expanded Commodity Association Window to cover more commodities like maize, cassava, sorghum, soy bean, ginger etc with the hope to achieve economic diversification drive.

The Governor, CBN, Mr. Godwin Emefiele, gave the target in Minna, Niger state at the flag off 2020 input distribution to rice farmers and loan recovery drive under Rice Farmers Association of Nigeria (RIFAN)- CBN Anchor Borrowers’ Programme. Emefiele expressed satisfaction with modest achievements recorded under ABP. National President, Rice Farmers Association of Nigeria (RIFAN), Alhaji Muhammad Aminu Goronyo, captured it succinctly in an interview with New Telegraph recently. Goronyo insists Nigeria had the capacity to feed her rice consuming population. RIFAN leader was reacting to insinuation of Nigeria’s limited capacity with respect to rice production.

“I don’t need to mention it; you can see display of these rice pyramids here. We did it deliberately so Nigerians don’t panic again with regards to availability of rice. There is panic deliberately instituted to portray scarcity of rice in Nigeria. But we, the farmers knew there is sufficient rice in Nigeria. More than enough rice is out there for consumption and left overs for export to Africa and neighboring countries.

“We portray this Egyptian pyramid and also Nigerian pyramid. You can see for yourself. The paddy you are seeing here is just a scratch of surface. If you know the quantity, we cultivated in Niger state, they are over 100 times of what is on display here. This is in Niger state alone, we have same thing in Rivers State, Ebonyi, Sokoto, in Kano and Kaduna and other states, Kogi and virtually all the states across the country,”Goronyo.

Rice trafficking syndicate still active

Government’s ban policy on importation of foreign rice and frozen chicken is still in force, notwithstanding commencement of AfTCA agreement. Regrettably, the county is still grappling with challenge of rice smuggling and other items. A popular online news medium last week reported that smuggling of foreign rice was still a booming business.

The medium reported that about 10 vessels of not less than an estimated 142,488 metric tonnes of rice from India and Thailand headed to Benin and expected to arrive not later than January 31,2021, after which most of the goods will find their way through various smuggling routes into Nigeria.

“The markets for these goods, mostly across the North are numerous. At Kano’s Singa Market, Ado Bayero road, a popular market that deals in selling food items tonnes of locally produced and processed rice such as Mafa, Tiamin, Optimum, Majestic among others, are immediately visible in 25 – 50kg sizes, but behind this display are warehouses containing foodstuff and essential commodities most of which are mostly smuggled foreign rice sometimes packaged in bags that portray them as homegrown,” the report said.

Last line

For Nigeria to reap benefits of her huge investments committed into financing rice cultivation and its value chain via CBN’s Anchor Borrowers’ Programme (ABP), every loose route through which rice is smuggled to Nigeria must be blocked.

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