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Buhari’s Ban on Rice Importation is a Bad Economic Policy

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In August 2019, President Muhammadu Buhari announced a decision to partially close the Nigeria-Benin border due to smuggling activities, especially of rice, into the country. Later in October, the decision was made indefinite with the government arguing the policy would encourage the local production of rice.

While the government prides itself on promoting local production, rice traders are bitterly complaining about low sales as customers groan at the low quality of local rice; they often demand Indian and Thai brands instead. The Governor of the Central Bank revealed that rice farmers in Nigeria are telling consumers to ‘hold-on’ while they process orders due to power outage affecting processing machines. It is simple economics: people will avoid expensive and low-quality local rice and prefer more affordable brands. This, unfortunately, would be bad for local farmers.

But there are deeper economic consequences for the government’s poor decision.

On the one hand, local farmers cannot access government aid due to corruption. The distribution of these aids is often controlled by cronies to state officials, who sometimes sell items like fertilizers and tools to farmers rather than give them free as provided. Their problem is complicated by constant power outages facing the operation of processing machines, which prevents local farmers from reaching 6.7 million tons of local demand, as against 3.7 million tons of local production.

On the other hand, though, the purported encouragement of local production would only give individuals like Aliko Dangote, Dalhatu Abubakar, and others who own bigger shares in local rice companies, an unhealthy monopoly.

Nigeria clearly needs to address the underlying challenges like constant power outages, and corruption, in order to meet production demands before closing its borders.

The rice problem is in its early stage and further problems could still be averted. The government should allow the importation of foreign rice and support local farmers concurrently.

If the government, however, continues to insist on clamping down on all rice importation channels, Nigerians would be left with three options: to either eat the low-quality local rice and not get satisfied, to buy the expensive Dangote rice only when they can afford it, or avoid eating rice altogether, which is a staple food. Whereas, neither options are best for the Nigerian consumer.

The continued closure of borders is creating an unfair dilemma for innocent Nigerians. People should have the option to decide what they prefer to eat. It is unimaginable that the only way the government seems to see solutions to every problem is by taking the most extreme measures. An extreme economic policy, in this case, is already having extreme consequences. Nigerians deserve better.

Akinyemi Muhammed is a writing fellow at African Liberty and holds an LLB (Hons) from the University of Ilorin. He is an alumnus of the African Presidential Leadership Program, Cairo, and tweets via @theprincelyx.By: Akinyemi Muhammed

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