Between challenges and effect of smuggling
AT the mention of smuggling, a picture of thriving illegal enterprise is visualised. It entails the use of unapproved routes, importation of prohibited or restricted products, evasion of duties, forging of official documents among others.
For several years, the activities of smugglers has featured prominently on the yearly programme of the Nigerian Customs Service (NCS), compelling the management of the strategic government agency to set aside resources for training and purchase of equipment including arms and ammunition to tackle the menace.
The Guardian enquiry from the Federal Operations Units (FOU) of the NCS, at the weekend, revealed that not less than 3,313 seizures with duty paid value of over N1.2 billion were made between January and December, 2012.
But, members of the business community are of the opinion that the government is not doing enough as the nefarious activities of smugglers has over the years contributed in no small measure to the dwindling state of Nigeria’s economy.
Though The Guardian investigation revealed that most of the products are not on the prohibition list, they are however being allegedly smuggled repeatedly through some porous border points by businessmen in order to evade payment of required duties.
Prominent among products allegedly smuggled into the country in large quantities are textiles, rice, all types of drinks, cars, vegetable oil, lubricants, tyre, foot wears, poultry products among others.
Members of Rice Millers, Importers & Distributors Association of Nigeria (RiMIDAM) alleged recently that the government loses over N1.7 billion worth of revenue every month to smuggling activities, pointing out that about 50 per cent of imported rice consumed in Nigeria come into the country through illegal routes.
Not restricted to Nigeria alone, the illegal trade, according to experts has assumed a disturbing dimension because of its health, economic and social implications on consumers and the larger economy.
In a chat with The Guardian on Monday, Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said the impact of smuggling is having adverse effect on the economy especially the manufacturing sector.
According to him, smuggling is one of the factors responsible for the low level of production, adding that there is no level playing field.
He said, “smuggling is partly responsible for the low level of production. Some importers bring in goods legitimately. Others don’t. Those complying with the law suffer great loss because of the activities of others. Government should make strict policies and put effective machinery in place to enforce them.”
Also in a chat with The Guardian, a member of the Presidential Task Force on Reforms of Customs, Lucky Amiwero explained that apart from the western zone, anti smuggling activities should be intensified in other locations especially in the core north.
Speaking further, Amiwero, who is also the president, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), explained that as part of measures to discourage smuggling, local producers and manufacturers should carry out comprehensive research on how to make their products and services competitive with imported ones.
Members of Rice Millers, Importers & Distributors Association of Nigeria, described smuggling activities as worrisome, adding that it has a total of about 4.5 million Nigerians employed in its value chain, emphasising that the figure excludes the not less than 2.7 million jobs created in areas of logistics, handling & sundry services in other sub-sectors of the industry.
Chairman of the Association, Mr. Tunji Owoeye said, “rice occupies an important place being the staple food of Nigerians. According to government statistics, yearly consumption of rice is about 5.5million tonnes. It is also a known fact that local production accounts for about 1.8million tonnes, thus necessitating the need for importation to bridge the gap.
“Unfortunately, 50 per cent of these imports are smuggled into the country. This is why the nation cringes under the effect of any negative or adverse development that affects the agricultural sector. We complained severally in the recent past about the activities of smugglers of rice and its devastating effect on the Nigerian economy.
“From records available to us, the total loss of revenue to the government from this unwholesome activity for the period commencing January 2012 till date (November 2012) is over $200 million (N32 billion).
“We also worked out the simple summation, 30,000 metric tonnes every month as smuggled commodity means that the Nigerian government would be losing over N1.7 worth of revenue every month. This is in addition to the problems it is causing for the local development initiatives of the Federal Government of Nigeria.”
RIMIDAN argued that for the Federal Government’s policies and initiatives aimed at making the nation to become self-sufficient in rice production, through local cultivation and the plan for the country to become a food exporting nation in 2020 would not materialised except the activities of smugglers are successfully curtailed.
The group explained that since land borders have become the main avenue for smugglers to flood the Nigerian market with rice, without regard for other concerns of the economy and the government, what was done in the case of frozen foods would be appropriate and effective in curbing the economic malaise.
It argued that none of Nigeria’s neighbours is a rice producing nation, adding that its strange for any importer to prefer to import parboiled rice first to Contonu before bringing it into Nigeria, with its attendant cost of double duty and tariff.
“What the smugglers are riding on is the increase in levy on imported rice and also the porous land borders. Thus there is a situation whereby thousands of bags of rice are being smuggled into the country on a regular basis especially through the rivers linking Nigeria with the Republic of Benin, while genuine processors are left in a lurch.
“The association’s call is for the federal government to strengthen its mechanisms for policing the land borders especially the Seme Border flank, as well as, other related areas, where much of these acts are being perpetrated.”
Also recently, the Senate expressed its commitment to checkmate activities of smugglers in the country in order to prevent a situation whereby genuine millers would be making huge investments in the economy, generating employment and supporting the country’s economic growth only for the smugglers to jeopardise it.
Speaking in a similar vein recently, Lubricant Producers Association of Nigeria (LUPAN) said that Nigeria loses billions of Naira to adulterated base oil, adding that there is an urgent need for the government to control the influx of fake and adulterated lubricants in the country.
Nigeria is said to be losing over N200 billion annually due to illegal importations and consumption of substandard lubricants by Nigerians.
The Guardian enquiry also revealed that in December 2012, several trucks were intercepted by men of the NCS while attempting to smuggle rice into the country.
While calling on importers to desist from smuggling activities, spokes person of the Federal Operation Units of NCS, Uche Ejesieme told The Guardian at the weekend that the NCS has assembled “experienced and fearless” officers to tackle the menace, adding that “we are not leaving any stone unturned. We are a step ahead of the smugglers”.
Ejesieme explained recently that poultry product was placed on the prohibition list by the Federal Government based on its negative effect on the health of Nigerians and the economy.
He explained that between June and September, 2012, 14,000 cartons valued at N42 million were confiscated and destroyed, adding that investigation revealed that the chemicals used preserved the products by importers were harmful to consumers.