Food smuggling: Nigeria's new challenge amid soaring inflation A surge in smuggling of Nigerian produce to neighbouring countries has heightened the challenge of food inflation in the country as the g

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The increase in smuggling of Nigerian goods to neighboring nations has exacerbated the issue of food inflation within the country, prompting the government to address the situation by tightening border security.

Reports indicate that significant quantities of grain and various commodities are being illicitly transported out of Nigeria to neighboring countries via clandestine routes spanning across states, exacerbating the challenges faced by citizens dealing with both hoarding and surging food inflation.

The severity of the issue was underscored by Vice President Kashim Shettima during a wealth management conference in Abuja on February 20. Shettima openly acknowledged the occurrence of food smuggling, citing a recent incident where 45 truckloads of maize were intercepted en route to a neighboring country. He emphasized the immediate impact of this interception, noting a subsequent decrease in maize prices by N10,000.

Shettima warned of disruptive forces aimed at undermining the stability of the nation.

Prior to the Vice President's address at the event, Nigerian customs had announced the interception of truckloads of food items that smuggling syndicates were trying to transport through various routes, including those passing through Jigawa State in the northwestern region of the country.

The Nigerian Customs Services typically isn't in the spotlight for intercepting foodstuff being smuggled across borders. Its primary mandate is to prevent the illegal importation of staple foods like rice to support the government's import substitution policies.

A few years back, Nigeria faced the challenge of curbing racketeers smuggling subsidized fuel to neighboring countries. When efforts to halt this illicit flow proved futile, the Nigeria-Benin border (Seme) was shut down in 2019. This move aimed to safeguard local rice farmers and millers from the influx of cheaper foreign rice imported through Benin Republic.

According to authorities, this action was among the reasons behind the removal of fuel subsidies, despite the potential for new challenges it might bring.

Nigeria currently grapples with alarmingly high food inflation, reaching a year-on-year peak of 35.41% in January, as reported by the National Bureau of Statistics.

The nation is implementing stringent measures to address food inflation, but it's a formidable challenge with no easy solutions in sight.

Nigeria has transitioned from pegging the value of the naira to adopting a floating exchange rate system, aimed at allowing the currency to find its "real value." This, along with the removal of fuel subsidies, constitutes significant reforms announced by President Bola Ahmed Tinubu upon assuming office last May.

The floatation of the naira led to a decline in the local currency's value, dropping from approximately 450 naira to a US dollar to about 1,500 in the country's foreign exchange market.

As a result of the depreciation of the Nigerian currency following the policy shift, the West African CFA franc and the Central African CFA franc used by Nigeria’s neighboring countries now hold more value than the naira. This renders it more costly to smuggle food items from other countries into Nigeria, while making it profitable for food producers to sell their produce abroad.

Experts highlight this as one of the factors contributing to the frequent interception of truckloads of smuggled food items by customs officials.

While the government's efforts to conserve Nigeria's hard-earned forex are yielding results, the flip side is the significant rise in the cost of living, causing hardship for many Nigerian households.

President Tinubu acknowledges that these reforms are causing pain to ordinary Nigerians but assures that it will be temporary. "There is light at the end of the tunnel. I requested the job, and I am not complaining about it. I take full responsibility," Tinubu states.

To address the challenges, Tinubu has instructed the release of grain from the country's national reserves and implemented other measures to curb runaway food inflation.

Customs authorities have initiated the sale of seized rice to Nigerians at a discounted price of N10,000 for 25 kg to alleviate their burden. Additionally, sub-national governments are rolling out various palliatives to ease the citizens' hardships.

During the Abuja conference, Vice President Shettima disclosed that 32 smuggling routes had been identified specifically in the Illela Local Government area of Sokoto State.

The magnitude of the issue becomes evident considering that the Illela border represents only a small fraction of the approximately 1,600-kilometer porous boundary between Nigeria and Niger alone. Nigeria also shares extensive borders with Chad and Cameroon, further complicating the situation.

Some estimates suggest that there are over 1,000 illegal smuggling routes, making it nearly impossible to seal all these gaps.

While there are theoretical arguments for restricted trade and the option of border closure, such measures are considered archaic economic policies in today's modern, interconnected world.

Engaging in strategic free trade agreements offers more benefits. Failing to open up to competition can result in underdeveloped and inefficient local industries, leading to high production costs that undermine the welfare of the populace.

Nigeria could potentially lower food prices by increasing supply through strategic trade, reversing policies that inflate production costs, and investing significantly in agriculture while welcoming strategic foreign direct investment into the sector.

Controlling forex to curb the export of food is another option to consider. Export is beneficial, but not in its current form, where it exacerbates domestic food shortages.

Following the actions of an anti-corruption agency in northwestern Kano State targeting alleged food hoarders, President Tinubu urged security agents nationwide to pursue similar offenders.

"This is a time for us to unite as one force, supporting our President, our government, and each other. We possess the resources and the intellect to overcome. We've reached a turning point and are on a path towards improved economic performance," stated Governor Babajide Sanwo-Olu of Lagos State.

Sanwo-Olu highlighted his government's initiative to promote urban farming as a starting point. "Let's cultivate what we eat and eat what we grow. Let's embrace this challenge and utilize available spaces to cultivate food," urged Sanwo-Olu to Lagosians.