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Counting border closure’s cost
By Muyiwa Lucas
Mixed reactions have continued
to greet the closure of the nation’s borders. While some say it is part of
efforts to save the economy from collapse, others say it is an assault on the
economy and disregard for the ECOWAS Trade Protocol, MUYIWA LUCAS reports.
For over 15 years, Moussa Qasim,
a Beninoise, has been taking advantage of the trade liberalisation policy of
the Economic Community of West African States (ECOWAS).
The ECOWAS Trade Liberalisation
Scheme (ETLS) adopted in 1979 had opened the way for him to grow his business
considerably, given the freedom of movement he enjoys among the countries. And
for him, his main marketplace is Nigeria, which he says, takes up over 90 per
cent of his products, ranging from agricultural, artisanal handicrafts and
unprocessed products, including industrial products. In return, Qasim takes back
to his country beverages, and some food items believed to be easily affordable
here and more profitable in Benin Republic.
From this cross-border trading,
Qasim is able to cater for his family needs, including paying for one of his
children’s tertiary education in Europe. But the tide is changing. Since middle
of August, when the Federal Government closed the country’s borders across four
of the six geo-political zones, business has not been the same for not only for
Qasim, but also for several other traders across the sub region.
From comercial motor cyclists,
transporters, bureau de change operators, to cross-border traders, the story is
the same: biting economy. There are fears that if the border closure
continues, the Bennoise, Nigeriens and Chadians’ businesses may crumble.
ECOWAS-ETLS
The ETLS is a trade instrument
designed by the Regional Economic Community. Article (3) of the Revised Treaty
of ECOWAS stipulates the removal of trade barriers and harmonisation of trade
policies for the establishment of a Free Trade Area, a customs union, a common
market and an eventual culmination into a monetary and economic union in West
Africa.
The ECOWAS-ETLS is the main
framework for trade and market integration in ECOWAS as it addresses protocols
on the free movement of goods, persons and transportation. The ETLS main
pursuit of consolidating the free trade area is guided by the National Approval
Committees that informs the member states. It is for this reason that the
ECOWAS implemented a Customs and Connectivity programme to simplify the
movement of goods in the region. The ECOWAS Common External Tariff has thus
been operational since 2015. Moreover, member states are increasingly
implementing the ECOWAS Single Customs Declaration Form for their customs
administrations.
For all products covered under
the ETLS, they are granted with concessions like no quantitative restrictions,
total exemption from import duties and taxes, non-payment of compensation for
loss of revenue for items (i) and (ii) as a result of their importation.
To qualify for admission into the
ETLS, such products must originate from the ECOWAS region. The following are
the three criteria for admission of products into the scheme: at least 60
percent local content of products, at least 30 percent value addition for
products.
The abuse
The ECOWAS-ETLS may have been
abused by the country’s neighbours – hence the decision to keep the borders
shut. For instance, a top government official in the Seme-Krake border told
this reporter that Benin Republic, especially, has been abusing the ETLS’
provosions.
The official, who pleaded
anonymity, explained that it is a common practice for importers to bring in
goods from Europe, load same back into trucks onward to Nigeria. Such
consignment, he explained, are then left to enter under the provisions of the
ETLS since there was no way to say they were imported.
Besides, the several cries and
warnings of the Federal Government were said to have fallen on deaf ears of the
government of the neighbouring country of Benin Republic. But the reluctance of
the Franco-phone country can be understood.
Under its rice fortification
policy, four multi-national companies and about 30 other smaller importers,
including individuals, were said to have been given approval to import foreign
parboiled and white rice into the country through Benin Terminal, Cotonou, and
Bollore seaport- Benin Republic’s two seaports. The white rice, according to
sources, are consumed within the country while the foreign parboiled rice
are exported to Niger and Chad, which in turn, are smuggled into the Nigerian
market through the north and southern parts.
The Value News, an online publication,
claimed that it obtained a document showing that African Agro Foods, one of the
companies owned by Pan Lebanes Group, has a mandate to ship into Benin Republic
360,000 MT, or 30 percent of the annual parboiled rice imports; Diefezi
Fils Sarl, 300,000 MT; Sonam, a company floated by the Stallion Group based in
Dubai, Quatar, having the Presidential nod to import 240,000MT or 20 percent of
the total parboiled rice needed in the country. These are eventually
exported to land locked countries or smuggled into Nigeria.
It further claimed that another
Dubai based company, ABC Enterprises, due to its limited financial muscle was
said to have been given approval to ship into that country 10,000 MT yearly.
This is in addition to 29,000 MT, or 24 percent, allegedly approved for the
other group of rice importers through the two seaports in the country. These,
it is believed, accounts for why the tiny sub-regional country is flooded with
rice. And with a small population incapable of consuming the volume of imports,
Nigeria became her ready market.
Qasim, though unable to put a
figure to the volume of rice import, nonetheless, revealed that in Benin, the
warehouses are filled to the brim with rice, including vessels on its waters
loaded with the commodity, but no patronage arising from the border closure.
The smaller shops along the Cotonou road and the ones at Seme-Krake Joint Border
between Nigeria and Republic of Benin, were also said to have been filled up
waiting for Nigerian buyers, who were nowhere to be seen close the border.
Although there are no official cost to goods tied down at the Seme-Krake
border, experts said it is not less than N750 million.
Experts and stakeholders blamed
Benin Republic for allowing countries like Taiwan to dump foreign parboiled
rice in their country and then re-bag such products and smuggle them into
Nigeria, taking advantage of the ECOWAS protocol, which allows access to free
trade within the sub region.
Last year, Nigeria’s former
Minister of State for Agriculture and Rural Development, Heineken Lokpobiri,
blamed rice smuggling on ECOWAS-ETLS protocol on free trade. He was unequivocal
that the nation’s fight against the smuggling of foreign rice has been
frustrated by her neighbours, particularly Benin Republic. He said the country
spent up about $5 million for the importation of rice daily, but that through
new policy programmes by the ministry and the intervention of partners like
IFAD, the figure had reduced drastically.
Such policies like the Anchor
Borrowers Programme and Nigerians answering the clarion call of this
administration to go back to the farms to produce what her people will eat and
eat what she produces, has made the country to be rated as the highest producer
of rice and cassava in Africa. Sadly, it is believed that Benin Republic has
undermined these policies through being a conduit for smuggling into Nigeria.
Long plan
But the plans to stop this
economic haemorrhage had been long thought of. Weeks later, Nigeria’s former
Minister of Agriculture, Audu Ogbeh, hinted of the Federal Government’s plan to
shut the land border between Nigeria and a ‘neigbouring country’ to avoid smuggling
of foreign rice into the country. He had explained that doing so had become
necessary to encourage local production and sustain the economy of the
country. He said this also denies Benin citizens the opportunity to grow
rice and benefit from the Nigerian market.
“We have engaged the government
of Benin Republic, up to the presidential level. The (Nigerian) president had
to invite the president of Benin Republic to engage him because we are
neighbours; let’s see how we can work together and curb this issue of
smuggling,” Ogbeh had said back then.
Benin Republic groans
The effect of the border closure
has taken a heavy toll on the Beninoise economy, including economies of other
West African countries. One of the very visible effect is the further crashing
of the CFA- the currency of the Franco-Phone West African countries, against
the naira. Before this period, N1,000, which exchanged for CFA 1500 before the
border closure now, exchanges at CFA1650 to N1000 in Benin Republic.
The Premium Motor Spirit (PMS),
otherwise known as petrol, sourced through smuggling across Nigerian
borders with the Franco-phone West African nation, now sells at CFA500 (N302)
per litre. This same product sold at CFA 300 (N181) just before the closure.
Qasim said life in Cotonou is
getting tougher daily, considering that all business houses related to doing
business with Nigeria closed. For now, most warehouses in Cotonu are filled and
overflowing with goods mainly rice and frozen food, meant for Nigeria.
A look across the Seme-Krake
border revealed the several hundreds of trucks parked at the borders, loaded
with goods destined to Nigeria, but they have not been able to cross the border
to Nigeria. Findings revealed that most of the trucks trapped at the border
contain goods that fall under the acceptable category of goods in the ETLS
agreement.
“Generally, business is very dull
– the closure has affected all ECOWAS countries. Most Benin warehouses are
filled up with rice and frozen chicken. Generally, business is very dull in
Benin Republic because most businesses are patronised by Nigerians-across the
border and inside the country,” he said.
He warned that should the
Nigerian government continue with the operation for up to six months, the
economies of most West African countries will collapse as most of them depend
on smuggling of foreign goods.
Niger’s sucker punch
For the Beninoise President,
Patrick Talon, these may not be the best of times. Four weeks ago, his
country’s economy, which is heavily dependent on rice import, received a deadly
blow.
Determined to persuade the
Nigerian government to reopen the borders, the Republic of Niger President,
Issoufou Mahammadou, bows to pressure from both official and unofficial
quarters to ban the export of foreign rice from Republic of Benin to the
country.
Issoufu, it is believed, may have
taken the decision, as demanded by Nigeria’s President Muhammadu Buhari, to
stop the smuggling of foreign parboiled rice into the through the northern
frontiers. Nigeria and Niger share common borders in the north west
geo-political region comprising Kano, Jigawa, Kano, Katsina, Sokoto, Zamfara
and Kebbi states.
Since June 2015, rice imports in
Benin Republic had soared, when the Central Bank of Nigerian (CBN), under
Godwin Emefiele created a list of 41 products, which were
later increased to 44 with the addition of textiles for which
importers do not have access to discounted foreign exchange.
Fruitfulness
For now, the closure seem to have
been a fruitful initiative. The Comptroller-General of the Nigerian Customs
Service (NCS), Hameed Ali, said: “When we closed the border, my fear was that
our revenue was going to drop. To be honest, our revenue kept increasing. There
was a day in September that we collected N9.2 billion in one day. It has never happened
before.
“This is after the closure of the
border and since then, we have maintained an average of about N4.7 billion to
N5.8 billion on a daily basis, which is far more than we used to collect.
“What we have discovered is that
most of those cargoes that used to go to Benin (Republic) and are then smuggled
into Nigeria now come to us.
“Now that we have closed the
border, they are forced to bring their goods to either Apapa or Tin Can Island
and we have to collect duty on them.
“If that (border closure) would
continue, to us, it is a welcome situation. Our revenue has not reduced. As a
matter of fact, it is increasing as a result of the closure of the border.
“About 10.2million litres of fuel
have been cut down from what we assume, we have been consuming,” Ali prided.
Yet, commendations has continued
to trail the closure. For instance, the President of National Council of
Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Lucky Amiwero, is
of the opinion that while the border closure is against international treaties
and protocols Nigeria entered into willingly, but the action has so far proved
to be the most potent approach to tackling the several years of massive
smuggling of goods from Nigeria’s neighbouring countries into Nigeria and smuggling
of Nigerian fuel to those countries.
Amiwero, who noted that smuggling
has been a major challenge to the Nigerian economy, submits that: “if this
operation is sustained till at least the end of the year, the Nigerian economy
will feel the impact in a very positive way while the West African countries
which over the years depended on allowing their countries to be smuggling
routes in and out Nigeria will be forced to re-strategise on ways to ensure the
survival of their economies,” he said.
According to him, there is no
need to lose sleep over the hundreds of trucks of ETLS goods trapped at the
borders because those goods attract just one per cent duty payment to the
Federal Government, and therefore do not constitute any major economic loss to
the country. “Most of those goods are ETLS goods, but in reality are not
produced in those West Africa countries purportedly exporting them to Nigeria.
They just gather the goods from different parts of the world, repackage and
re-export to Nigeria as ETLS goods. That in itself is smuggling,” he said.
For him, the closure is a
blessing to the Nigerian ports in disguise. “If the operation is sustained,
most of the people importing goods they want sell in Nigeria, but had been
patronising Benin and Togo ports will have no other option than to start to
route their import to the Nigerian seaports. They don’t have option; their
market is here,” he said.
No retreat, no surrender
The National Security Adviser
(NSA), Maj.-Gen. Mohammed Babagana Monguno (rtd), has also hinted that the
closure would not end soon.
The exercise, tagged: ‘Exercise
‘Swift Response’, he said, therefore, would be in place “until the neighbouring
countries can ensure that their countries will no longer serve as transit
routes for smuggling of goods into and or destination of smuggled Nigerian
fuel’’.
“There
is no going back on the border closure with the
neighbouring Republic of Benin and Niger. The countries share boundaries
with Nigeria in the north west, north central, southwest and south-south geo-political
regions till the countries bow to government demand to stop
smugglers from using their countries as base to turn Nigeria into a
dumping ground for prohibited goods, particular , foreign parboiled rice from
the Asian country of Thailand. Harmful products, mall and light arms including
foreign rice were smuggled into the country through unapproved routes
from the north and southern part of the country,” he added.
Spotlight: Cambodia hopes to expand market for rice
via upcoming China Int'l Import Expo
Source:
Xinhua| 2019-10-20 23:17:22|Editor: Wang Yamei
by
Nguon Sovan, Mao Pengfei
PHNOM
PENH, Oct. 20 (Xinhua) -- "Chinese dishes and Cambodian rice are best
match!" said Song Saran, president of the Cambodia Rice Federation,
"I believe that Cambodian rice will become more and more popular in
China."
In
an interview with Xinhua on Friday, Saran said that Cambodia will grasp the
opportunity of the second China International Import Expo (CIIE) in Shanghai to
promote its best quality rice to the Chinese and international markets.
Thirteen
Cambodian rice exporters will showcase their finest rice at the second edition
of the CIIE, which is scheduled for Nov. 5-10 in Shanghai, said Saran, adding
that Cambodian rice exporters hope to sign more contracts during the expo.
In
his office, a variety of rice samples and awards of best rice winners are
displayed on shelves. Saran said three varieties of Cambodian rice will be
brought to exhibit at the event.
"The
first one is Malys Angkor (jasmine rice). Malys Angkor aromatic rice is the
world's best rice winner (in 2018)," he said, adding that the other two
are fragrant rice and premium white rice.
As
about 80 percent of Cambodia's population is farmers, rice has been grown
throughout the country, and almost 40 percent of the volume of milled rice
produced in the country has been shipped to China.
Saran
said the export of Cambodian rice to China has remarkably increased during the
first nine months of 2019 after the federation took part in the first CIIE in
last November.
The
kingdom exported 157,793 tons of rice to China during the January-September
period this year, up 44 percent over the same period last year, he said, adding
that the export to China accounted for 39.6 percent of the country's total rice
export.
China
has become the top buyer of Cambodian rice. Saran was strongly confident that
the volume will continue to grow in coming years. He said Cambodian rice has
been popular in China for the last five years thanks to its good quality and
delicious flavor.
"First,
it's tasty; second, it's very tender and (has) a very good aroma," he
said, emphasizing that Cambodian rice has been grown around the Tonle Sap Lake,
where the soil is fertile and farmers do not use chemical fertilizers and
insecticide, which makes consumers feel more safe and confident to consume
Cambodian rice.
Kann
Kunthy, vice president of Amru Rice (Cambodia), which will partake in the
upcoming CIIE, said the company has contracted with farmers, providing them
seeds and techniques in order to grow the best and chemical-free rice for the
Chinese market.
In
the factory on the western outskirts of Phnom Penh , as engines roared on
Friday, workers had feverishly worked based on their duties and
responsibilities. Some unloaded unprocessed rice from trucks and poured it into
an intake hopper, where the rice would go through all processes and end up in
packaging.
Then,
the quality of the processed rice will be checked and certified by a team of
Chinese experts from the CCIC (China Certification & Inspection Group)
before being permitted to be uploaded into containers destined for China.
"When
rice arrives at our factory here, we have our QC (Quality Controller) inspect
again to make sure that we buy Grade A, we get Grade A," he said.
"When it comes to packing, CCIC checks it again, just to make sure the
rice is 100 percent Grade A, so we only ship the best rice to China."
Cheng
Vuthy, a QC manager of the Amru Rice Reprocessing Factory, said quality and
safety are the top priorities and that the factory always adheres to quality
criteria required by clients.
"We
work very hard to make sure we bring our best to Chinese consumers," he
told Xinhua. "During the past years, Chinese market has been growing very
fast and we are very happy to know our rice will be exhibited in
Shanghai."
"This
container behind me will be shipped to China soon, and we hope our rice can
become more and more popular in China," he added.
Chen
Qisheng, general manager of CCIC's Cambodian branch, told Xinhua that, the
coming expo in Shanghai will be a golden chance for Cambodia to introduce its
rice to more Chinese consumers.
"I've
been working in Cambodia for two years. Cambodian rice is aromatic and
glutinous. Cambodian farms are clean, and have no chemical pollution,"
Chen said, "that's why Cambodian rice is tasty and safe."
In
addition to rice, China also imports banana, cassava and cashew-nuts from
Cambodia. Chen said that CCIC has been working with Cambodian partners to
export more kinds of agricultural products to China, including mango, dragon
fruit, coconut and etc. "With the help from Chinese partners and huge
demand of Chinese consumers, Cambodian agricultural sector is going to
boom."
Gov’t to give
P5-K cash aid to rice farmers
The DA chief also clarified that
the cash assistance is different from the earlier loan assistance of PHP15,000
offered by the government to affected rice farmers under the Expanded Survival
and Recovery Assistance Program for Rice Farmers (SURE Aid Program). (Pexels
Photo)
MANILA — In view of the declining
palay prices since the rice tariffication law took effect in March, the
government will be giving PHP5,000 cash assistance to affected farmers tilling
one hectare and below.
Agriculture
Secretary William Dar, on the sidelines of the ongoing Philippines-India Trade
Consultations held at Shangri-la Makati on Friday, said the cash assistance is
a one-time cash-out and this will be taken from the tariff being collected out
of the Rice Tariffication Law (RTL).
Around
PHP3 billion will be needed for the 600,000 rice farmer-beneficiaries in the
country.
“I’m
hoping that this (cash assistance) will be given before Christmas,” Dar said.
At
present, he said about PHP11 billion have been collected from RTL.
The
DA chief also clarified that the cash assistance is different from the earlier
loan assistance of PHP15,000 offered by the government to affected rice farmers
under the Expanded Survival and Recovery Assistance Program for Rice Farmers
(SURE Aid Program).
The
PHP1.5-billion SURE Aid Program is the government’s initial relief response to
rice farmers who are tilling one hectare of land and below and are affected by
the initial impact of lower palay prices. The one-time, zero-interest, no
collateral loan of PHP15,000 is payable up to eight years.
Meanwhile,
Dar said the government has decided to defer the implementation of safeguard
duties on rice imports.
“I
presented the proposal to the Cabinet and their decision (is that) there might
be an inflationary effect,” he said.
Dar
said there will be a meeting of the Economic Development Cluster (EDC) on
October 24 to include discussion on the proposed general safeguard duty on rice
import.
Cambodia hopes to expand
market for rice via upcoming China Int'l Import Expo
Source:Xinhua Published: 2019/10/21 13:49:23
Cambodian rice is displayed
during a product fair in Phnom Penh, Cambodia on June 22, 2015.
(Xinhua/Phearum)
"Chinese dishes and Cambodian rice are best match!" said Song Saran, president of the Cambodia Rice Federation, "I believe that Cambodian rice will become more and more popular in China."
In an interview with Xinhua on Friday, Saran said that Cambodia will grasp the opportunity of the second China International Import Expo (CIIE) in Shanghai to promote its best quality rice to the Chinese and international markets.
Thirteen Cambodian rice exporters will showcase their finest rice at the second edition of the CIIE, which is scheduled for Nov. 5-10 in Shanghai, said Saran, adding that Cambodian rice exporters hope to sign more contracts during the expo.
In his office, a variety of rice samples and awards of best rice winners are displayed on shelves. Saran said three varieties of Cambodian rice will be brought to exhibit at the event.
"The first one is Malys Angkor (jasmine rice). Malys Angkor aromatic rice is the world's best rice winner (in 2018)," he said, adding that the other two are fragrant rice and premium white rice.
Farmers load sacks of paddy rice
onto the cart in Kandal province, Cambodia, Sept. 16, 2016. (Xinhua/Sovannara)
As about 80 percent of Cambodia's population is farmers, rice has been grown throughout the country, and almost 40 percent of the volume of milled rice produced in the country has been shipped to China.
Saran said the export of Cambodian rice to China has remarkably increased during the first nine months of 2019 after the federation took part in the first CIIE in last November.
The kingdom exported 157,793 tons of rice to China during the January-September period this year, up 44 percent over the same period last year, he said, adding that the export to China accounted for 39.6 percent of the country's total rice export.
China has become the top buyer of Cambodian rice. Saran was strongly confident that the volume will continue to grow in coming years. He said Cambodian rice has been popular in China for the last five years thanks to its good quality and delicious flavor.
"First, it's tasty; second, it's very tender and (has) a very good aroma," he said, emphasizing that Cambodian rice has been grown around the Tonle Sap Lake, where the soil is fertile and farmers do not use chemical fertilizers and insecticide, which makes consumers feel more safe and confident to consume Cambodian rice.
Kann Kunthy, vice president of Amru Rice (Cambodia), which will partake in the upcoming CIIE, said the company has contracted with farmers, providing them seeds and techniques in ord
er
to grow the best and chemical-free rice for the Chinese market.
A Cambodian farmer removes rice
seedlings in Dangkor district on the outskirts of Phnom Penh, Cambodia, Aug.
20, 2014. (Xinhua/Sovannara)
In the factory on the western outskirts of Phnom Penh , as engines roared on Friday, workers had feverishly worked based on their duties and responsibilities. Some unloaded unprocessed rice from trucks and poured it into an intake hopper, where the rice would go through all processes and end up in packaging.
