Rice scarcity: Nigerians groan as price skyrockets

The closure of the Nigerian borders by the federal government has continued to take its tolls on the Nigerians as the scarcity of rice hit the markets resulting in the hike in the price of the commodity. Nigerians are groaning as the price of rice skyrockets, TOPE SUNDAY writes.

Major markets in Nigeria today are experiencing scarcity of rice because of the closure of the Nigerian borders by the federal government leading to a hike in the price of the commodity which is a staple food in most Nigerian homes. The scarcity may not be connected with the fact that the quantity of locally produced rice is insufficient to meet the needs of Nigerians and was previously supplemented with the foreign brands which were imported through the now closed borders.

The situation is compounded by the fact that the locally produced rice is also not available for purchase and where it is available; the price has also been hiked. This is as marketers insist that the price of the commodity is like to the upward spiral unless the government of the day revisits its decision in the nearest future.

Why border closure

President Muhammadu Buhari in far away Yokohama, Japan, in August this year, took his time to explain that the partial closure of Nigeria’s border with Benin Republic, was due to the massive smuggling activities, especially of rice, taking place on that corridor.

President Buhari, who granted his Beninois counterpart, Patrice Talon an audience, expressed great concern over the smuggling of rice.

The President said the activities of the smugglers threatened the self-sufficiency already attained due to his administration’s agricultural policies.

“Now that our people in the rural areas are going back to their farms, and the country has saved huge sums of money which would otherwise have been expended on importing rice using our scarce foreign reserves. We cannot allow smuggling of the product at such alarming proportions to continue,” he said.

Effect on price, consumption

Since Nigeria closed its land borders, the price of rice, a major staple in the country has been on the rise. According to a report in a national daily, the price of a 50kg bag of imported rice, which was selling at N14,500 before the closure of the border, now sells for N27,000.

Also, locally produced rice has not been left out of the party as the price of Lake rice, a product of an alliance between Lagos state and Kebbi state, has increased by 22 per cent from N13,500 to N16,500.

According to data from the U.S. Department of Agriculture (USDA) for August 2019, Nigeria, with average local demand of 7.3 million metric tonnes (MT) per annum, versus average local production of 4.9 million MT, is the world’s third largest rice importer behind China and the Philippines.

Further checks by Blueprint Weekend revealed that major markets in Nigeria are experiencing the scarcity of the product.

A rice dealer in Ilorin, Kwara state, Mrs Ronke Adekunle, told this medium that despite the hike of the price of rice, it is also scarce in the market.

According to her, the imported rice which most Nigerians are used to is becoming very scarce in the market despite its new price tag due to the border closure.

She, however, expressed concerns over the availability and acceptance of the locally grown rice, which quality she said some Nigerians still doubt.

“As I am talking to you now, rice scarcity has hit major markets in Ilorin, the Kwara state capital. They have closed the border, which made it impossible for us to have foreign rice in the market.

“People are ready to buy imported rice at its new price because they preferred it to our own rice. But the product is scarce in the market. However, locally grown rice which price has soared higher is not enough for our people to consume’’, she said.

Also, a survey of some other markets in the country revealed that the same scenario is playing out in those markets.

Efforts to boost rice production

Since 2011, the government has made substantial efforts to encourage the domestic cultivation of rice and eliminate importation using incentives such as subsidised loans, cheap fertilizer, free farm lands, and tax rebates.

 The Central Bank of Nigeria (CBN) has also initiated lending schemes such as the Anchors Borrowers Programme (ABP) and Commercial Agriculture Credit Scheme (CACS) to stimulate the planting and cultivation of local crops.

Can local rice sustain the country?

With the closure of the Nigerian borders in a bid to tackle the smuggling of consumable items like rice into the country, Nigerians have been raising a lot of posers bothering on whether the locally grown rice will be enough to meet the needs of the people.

Speaking on the issue, an economist, Mr Adedayo Ademuwagun, said the local production of rice is enough for the Nigerian citizens, who he said, spend a 10th of their food budget on rice.

He said: “Local rice production is still not enough for Nigeria’s 190 million inhabitants, who spend about a tenth of their food budget on the staple.”

According to the Director of the popular Badagry market on the Nigeria-Benin border, Mr Todowede Baba Oja, prior to the border closure, some 3,000 sacks of imported rice were being smuggled into Nigeria every day by motorbike riders.

With Baba Oja’s revelation, Nigerians consumed rice in large quality than any other food on daily basis

 According to economists, though production has improved and locally-grown rice is available in many markets, supply still dwarfs local demand.

They have maintained that the decision to close the land borders has worsened the supply situation, resulting in a steep increase in price as seen in the past few weeks. Adding to the pressure of low supply, many dealers are said to be hoarding the commodity with the intention of selling at increased prices during the Christmas festivities.   

They, however, said if something drastic is not done to address the situation, hunger is looming.

Closure temporary measure

Reacting to the development, the former Central Bank of Nigeria (CBN) Deputy Governor, Dr Obadiah Mailafia, who described border closure as a welcome idea, however, cautioned that measure should be a temporary one.

“If there are contingencies that are required to temporarily close the border, then it is something that should be encouraged.

“Some traders, importers and exporters have been worried by the difficulty it has posed to their business. One trader, I heard was lamenting that he had perishable goods and a lot of them have been at borders for many weeks, and that he is at the verge of losing her business.

“Those issues should be looked into, but in a situation where there is an uncontrolled smuggling of banned items in particular into our country, we have to resolve the sovereign right to closure our borders. But like I said, it should be temporary. So, I welcome the decision to make this kind of the decision to closure the border temporarily,” the former CBN boss said.

On whether the closure would lead to hunger, Mailafia said: “There is what economists called ‘temporary shocks’. When you make a decision, the market sometimes over react and therefore, you will get price shock, just scarcity.

“These are temporary. In fact, they can act as stimulus to the economy so that rice producers next year will double their production because now they are encouraged by the price signals and incentives to produce more for the need of the market. I think this is the way we should look at it.”

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