New Telegraph

Border closure: Succour for agric sector

Exactly one year after the Federal Government shut the country’s border in its quest to achieve self-sufficiency in food production, reports have shown that the Anchor Borrowers’ Programme (ABP) of the Central Bank of Nigeria (CBN) has buoyed sales and profits for many agro-processing companies and local farmers in the country. TAIWO HASSAN reports

Indeed, how time flies; just like yesterday, it is already one year since the unexpected news broke out that the Federal Government had announced border closure with the neighbouring countries. Precisely, government has continually emphasised that the reason for the border closure is more of economic interest and security of the country. One of the fundamental reasons behind the country’s land border policy, apart from smuggling and security, can be traced to the need for agric development, considering the inputs of Central Bank of Nigeria through Anchor Borrowers’ Programme (ABP). President Muhammadu Buhari had expressed great concern over the smuggling of rice and other agric products. He said that the activities of smugglers threatened the self-sufficiency agenda of his administration’s agricultural policies, thus lauding CBN as the think-thank behind Nigeria’s agric revolution.

Recap

The road towards attaining food sufficiency in rice production in the country can be traced to 2015 when CBN unveiled ABP to boost agric and manufacturing value chains in line with the Federal Government’s economic agenda to improve revenue earnings from the country’s non-oil sector. That same year, CBN launched ABP in 14 states of Kebbi, Sokoto, Niger, Kaduna, Katsina, Jigawa, Kano, Zamfara, Adamawa, Plateau, Lagos, Ogun, Cross-Rivers and Ebonyi for rice and wheat farmers to advance their status from small holder farmers to commercial or large growers. According to the apex bank, the effort, which was part of its developmental agenda, would not only create millions of jobs but also capable of lifting thousands of small holder farmers out of poverty. During the flag-off in Birni- Kebbi, Kebbi State, CBN announced the setting aside of N40 billion out of the N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEDF) to be given to farmers at single digit interest rate of maximum nine per cent per annum under ABP. However, in the space of five years, ABP has demonstrated positives in Nigeria’s quest to boost her non-oil sector profile by empowering millions of farmers in the country’s agric sector.

BoostnL

Findings have shown that Nigerian agro-processing companies have reported a spike in sales and profits as a result of Recall that the President Buhari- led administration had on August 20, 2019, shut the country’s land borders. The president had stated that the closure was due to the smuggling of food items, particularly rice. However, government’s move has had a positive impact on one of Nigeria’s largest agro-processing companies, Okomu Oil. The company is in the business of developing oil palm plantation, palm oil milling, palm kernel processing, and the development of rubber plantation. To generate revenue, it sells processed fresh fruit bunches into crude palm oil for resale locally and via exports. Most of its customers are manufacturers of consumer goods such as soaps and cosmetics. It also generates revenue by processing rubber lumps into rubber cake for exports. In 2019, Okomu Oil reported that revenue was down seven per cent year-on-year while profits also fell 40 per cent to N5 billion, its worst year since 2016, the year Nigeria fell into its last recession. In the same year, N15.8 billion of its revenue was from local sales while the balance N2.9 billion (mostly Rubber) was from export.
Most of its local sales revenue came from crude oil palm. Despite its dominance in this sector, it faced an existential threat, which if not contained, could further erode progress made over the years. The company blamed smuggling or illegal imports as the major reason for the revenue drop experienced in 2019. But things could have gotten worse were it not for what the company described as the “timeous” intervention of the government in closing all land borders. Since then, the company has seen its profits nearly doubled to N4 billion, 20 per cent shy of profits for the whole of 2019. Revenues are also up by 5.8 per cent to N13.5 billion in the first half of 2020 compared to the same period in 2019.

Stakeholders’ reactions

Following the closure, agric stakeholders have moved for continuity in sustaining it to enhance local production. This move is to show that the country is serious in its bid to eradicate food smuggling in and out of the country, considering its multiplier effect on revenue earnings for decades. Minister of Agriculture and Rural Development, Alhaji Sabo Nanono, told this newspaper that the Buhari administration would sustain the border closure policy despite the ECOWAS protocol in place as the country has reaped huge revenue since its closure a year ago. Nanono regretted the adverse effect foreign food import is having on the country’s forex, saying that no serious nation would opt for importation of foreign foods at the detriment of local ones. In his reaction, Nigeria’s business mogul and richest man in Africa, Alhaji Aliko Dangote, supported government’s stance to continue the closure, saying the process was in good order despite the criticisms. Dangote said: “We are now sitting and setting the rules on how to operate the border because obviously we cannot allow smuggling activities to kill our industries. “Obviously, we want to create more jobs, but if we allow smuggling to wipe out our industries the way it did to the textile sector, then obviously we are in trouble.” Similarly, the Chairman and Chief Executive Officer, Coscharis Farms Limited, Cosmos Maduka, said CBN’s support for Nigerian farmers had been key towards achieving food self-sufficiency, decrying the influx of smuggling of parboiled rice into the country from neigbouring countries as a threat to repaying loans from ABP. National President of All Farmers Association of Nigeria (AFAN), Kabir Ibrahim, also said: “The closure of the border became necessary when our neighbours failed to protect us as good neighbours should. It was almost a deliberate attempt to pauperise our country in collusion with some unscrupulous Nigerians, who freely smuggled banned goods or refused to pay duties on imported items. “The length of time it has taken the customs to plug the leakages is prolonging the closure, which is beginning to have negative effects as against the envisaged protection. So it will be valid to say that some gains have indeed been recorded.”

Last line

From stakeholders’ comments, Nigeria has definitely achieved breakthrough from the border closure, and sustaining it, one year after, shows that government’s stance was in order in its quest to achieving self-sufficiency in food.

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