Quick one on border closures
I have written quite a bit about this border closure, and I am tired. I suspect many are, but we can’t keep quiet in the face of economic self-sabotage.
Today, the NBS released figures that showed that inflation has reached its highest level in more than a year, food inflation even worse. When you consider that about 60% of Nigerians have nothing left to spend after they have paid for food, these numbers become even scarier.
Permit me to also talk about the effect on Nigerian businesses. Two FMCGs that I am aware of export to neighbouring countries. Since this border closure happened, they’ve all been, at a point or the other, forced to declare force majeure on contracts they are obligated to. This means that in all probability, their clients will start looking for alternatives.
Those alternatives are likely to be Chinese. Which means that Nigerian businesses may not be able to recover their market when the border reopens. This means that Nigerian businesses will downsize. Which means more Nigerians out of work.
That’s just one.
Now to the food, the much-vaunted reason that the border was closed. We have not sorted the basic problems of agricultural production in Nigeria.
Quality of seed.
Yields.
Storage.
Transportation.
This means that our local production cannot meet our demand.
This means that the ban will only create an artificial scarcity, and lead to a rise in prices for those who can afford it, and starvation for those who can’t. Already there are stories of Chicken Republic having supply problems. I know that some other foodstuffs are creeping upwards in price. Of course, the NBS confirmed this today. This leads to more social problems such as the newly minted jobless picking up guns at a time when more people are using cash because electronic means of payment are no longer as friendly as they used to be…
One thing this border closure shows is the inability of our government to deal effectively with a complex problem. Consider the Customs raiding people for “smuggled” cars. You have a rather ridiculous tariff on cars, it’s been on for five years. Why not crash that tariff so that importers will be happy to direct their shipments here?
Regarding rice, it is an unassailable fact that Nigeria’s rice production simply cannot meet our demand. What have we done to incentivise production, storage, and getting the rice to the market on time? Heck, have we even mapped our country properly to be certain where the rice should go?