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How Benin’s import policy threatens Nigeria’s economy

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Red Palm OIl

Crude palm oil producers and processors in the country have called on the Federal Government to close its borders with the Republic of Benin for allegedly sabotaging Nigeria’s economic interest.

Specifically, the local producers are accusing the Benin Republic of importing palm oil more than it needs from Malaysia and exporting the surplus to Nigeria at the expense of the latter’s socio-economic gains.

Data available from the Malaysia Board on Palm Oil and indexmundi.com indicate that Benin Republic’s consumption was 135,000 tonnes of palm oil in 2018, its production was 60,000 while its deficit was 75,000 tonnes, but its import was 640,000 and its export, ironically, was 550,000 tonnes.

When contacted on the figure, the Plantation Owners Forum of Nigeria (POFON) said imports to other African countries were either smuggled or re-exported to Nigeria under the guise of products made in ECOWAS countries, thereby avoiding 35 per cent duty.

The association called on the Federal Government to either close the Benin Republic border or talk tough to the government to prevent smuggling and its devastating consequences on the Nigerian economy.

The data on importation to Nigeria and other African countries confirmed that Nigeria imported over 350,000 metric tonnes in 2018, and that Benin Republic in particular imported far more than its deficit, indicating that its palm oil import is smuggled into Nigeria as the largest market in Africa. That is apart from the smuggling of vegetable oil (which is banned in Nigeria), rice and tomato paste, to mention a few.

Regionally, in 2018, Nigeria produced 1,015,000 tonnes while the local demand was 1,340,000. The deficit was 325,000 tonnes while its importation was 350,000 tonnes.

In the same year, Ghana’s demand was 785,000 metric tonnes, its production was 520,000 tonnes, deficit was 265,000 tonnes and import was 320,000 tonnes, while the country exported 60,000 tonnes of palm oil, assumed to be smuggled into Nigeria.

The only country producing more palm oil than it consumes is Cote D’Ivoire, with a production figure of 480,000 tonnes in 2018, its demand was 325,000 while its excess was 155,000. The country’s import was 35,000 tonnes and its export was 200,000. Despite the excess production, Cote D’Ivoire still imports from Malaysia for re-export to Nigeria as a product from ECOWAS country to avoid 35 percent duty payable on the product.

Togo’s demand was 190,000 tonnes of palm oil in 2018, its production was 9,000, its deficit was 181,000 tonnes. The country’s import was 230,000 and its export was 50,000 tonnes, also implying that it indulges in re-export to Nigeria.

The Executive Secretary of POFON, Mr. Fatai Afolabi, said: “This is a border issue. This is not an issue within the reach of you and I. If we are neighbours, you should be able to protect me; you should not be an accomplice to intruders. I think the neighbouring country that is not supporting Nigeria to enforce the Nigerian law is an accomplice, and that country cannot claim to be a friend.

“Given the brotherly role Nigeria plays in supporting the economies of its neighbours, they cannot be subverting its economy and still expect support. Why should Nigeria suffer because it wants to assist other neighbouring countries?”

Afolabi advised that the current government do what a past government did. “There was a time when car snatching was very rampant in this country and the government then had to invite the presidents of the neighbouring countries and said, ‘cars are snatched from my country and taken to your countries. If you are receiving the stolen cars you are the number one suspect and you have to stop it.’

“The country gave an ultimatum to close the borders, and the crisis became history. That was the beginning of the end of the inter-border car snatching, especially in Lagos State.

“This time too, I expect the Nigerian government to listen to the local producers, the farmers and understand their plights, support them, and talk tough to the neighbouring countries subverting our policies.”

According to him, “if that happens, there will be improvement in the economy. If the countries do not create the avenue for subverting the Nigerian economy, smuggling will reduce and the pressure on the Nigerian Customs will reduce.”

Requests for the revenue generated from the imported crude palm oil in 2018 and 2019 and responses to other allegations from the Public Relations Officer of the Nigeria Customs Service, Mr. Joseph Attah, were yet to be replied to at the time of filing this report.


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