- Says negotiation ongoing with neighbours to respect Nigeria’s trade protocols
By Lawrence Olaoye
Inflationary trend recorded in the month of October could be linked to the decision to close land borders, the federal government has admitted.
Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, who fielded questions from journalists yesterday after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari added that the closure of the land borders was a temporary measure.
The minister said the government expected that the outcomes of the discussions and agreements would make each party to respect the protocols they all committed to in order to open the borders again.
Ahmed, while reacting to the question on inflation said, “On inflation, headline inflation declined every month for several months before we noticed an uprise in the last two months. And now headline inflation is at about 11:61 percent as at the end of October. The slight increase in this inflation between September and October is due to food inflation. The food inflation we are ascribing to prices of cereals, rice and fish. And part of the reason is the border closure but the border closure is very short and temporary and the increase is just about two basis point. Remember there was a time inflation was nine percent and it grew to about 18 percent in January 2017 when we were in recession.
“The relationship between inflation, interest rates and growth is managed by the monetary authorities and is a management that is tracked on a regular basis.
“So, if you reduce interest rate, you expect more borrowing for investments in the real sector. But at the same time that also has the tendency of reducing money that is used for consumption on a day to day basis.
“So, it’s a balance that we continue to watch on a regular basis, we expect that this will be moderated as border closure impact fizzles out and also as the monetary authorities continue to support the MPR rate therefore ensuring that interest rates are not on the high side.”
Also speaking, the Minister of Information and Culture, Lai Mohammed, said, “You see, the issue of border closure, and I think it will be quite misleading and will not serve the real purpose of our headlines tomorrow, that inflation is as a result of border closure.
“The border closure, frankly speaking is what we needed to do and we had to do it. We cannot continue to subsidize the rest of West Africa. And the benefits for border closure for me, I think far surpasses the very little increase in inflation. We have been able to save about 30 percent from our fuel consumption which means that over time we have been subsidizing the fuel consumption of other countries.
Within the last three months we have been able to increase by 15 percent duties collected from import. Within the same period and this is very important, we have been able to drastically reduced the volumes of arms and ammunition that have been coming into the country through smuggling, ditto with illicit drugs.
“All Nigeria is saying, please let’s respect the protocol on transit. ECOWAS set up a protocol on transit goods which is very simple. If a container meant for Nigeria is dropped in Cotonou, the authorities in Benin Republic should escort the container to Customs in Seme border, and that way proper duty will be levied and will be paid. But on the contrary, what we have seen happening… and the protocol said, you cannot break the seal, you cannot open the container. But what has been happening over the years is that our neigbours, will trans load the container, put about five containers on one truck and drive it to the border as if it is only one container that they are going to pay duties on. Worse still, less than even 50 percent of what is meant for Nigeria will come through the approved border.
“So, what we have done and it has maximum effect – ask our neigbours to respect the protocol on transit, if they do that the borders will be open. But you cannot continue to play the big brother at the expense of national security and our national economy.”
Asked whether what he was saying was that Nigeria and the neigbouring countries had not agreed on the way to go, Mohammed said, “Even yesterday (Tuesday), there was a meeting between the various actors. I know that the Comptrollers of Customs of all the three countries involved met yesterday. As we speak today, we have not reached any agreement but channels have been deployed. Everything is going on but our insistence is that we must all respect the ECOWAS protocol on transit goods.”
