Border Closure: Prices Soar Amid Shortages

bags of rice
  • Border Closure: Prices Soar Amid Shortages

Prices of goods have gone up in the Nigerian market as lack of supply due to border closure bolstered prices.

Traders in the local market said the shortage of imported food items are fueling the surge in prices of goods across key local markets as sellers are said to be hoarding available goods to sell at a projected higher price around December when prices of Chicken, Rice, etc are expected to skyrocket.

A trader at Ile Epo Market in Lagos, Isa Mohammed, said prices of imported parboiled rice have increased by 100 percent. He said a 50kg bag of rice that was sold between N13,000 and N14,500 in July is now being sold between N24,000 and N30,000.

“Prices of other measures of the same variant have also increased.”

Another rice seller at Isheri Market said rice dealers now sell at a much higher price, forcing them retailers to increase the price they sell to final consumers.

He said, “The 50kg bag of imported rice that we used to sell for about N21, 000 now costs N30, 000. The 50kg bag of local rice that was sold at N16, 000 now costs between N22, 500 and N23, 500.”

“We learnt that the government has closed the borders so the goods cannot come in again.”

Surprisingly, he said the price of local rice has also gone up, suggesting that imported rice has been sustaining the local market, hence why its scarcity impacted price.

Similarly, a woman who sells frozen chicken said the price of Chicken has gone up because of the border closure.

According to her, before the border was closed in August a kilogram of frozen chicken and turkey were N1,300 and N1,400, respectively. That same kg now costs N1,500 and N1,700.

The surge in prices pointed to the fact that Nigeria is still not self-sufficient in rice production as claimed by some lawmakers a few months ago.

It should be recalled that Dangote also closed his Tomato Processing Factory due to insufficient raw materials.

Consumer Price Index, which measures the inflation rate, could surge above the current level of 11.02 percent in the final quarter if the Federal Government refused to open the border.

This would hurt Nigeria’s monetary policy as the Central Bank of Nigeria would have to adjust its monetary policy to regular price increase and at the same time ensure Naira stability.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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