Report: Smugglers Stranded with Nigeria’s Border Closure
The decision by the federal government to close all its land borders two months ago to tackle smuggling is affecting trade across the region, a report has stated.
The bbc.com report noted that bustling borders have come to a standstill, with goods rotting and queues of lorries waiting at checkpoints in the hope the crossings will reopen.
According to the report, following the closure of the borders imposed without warning on 21 August, Nigeria’s neighbours are angry. It pointed out that the smuggling of rice mainly prompted the federal government’s action.
“It seems Nigeria was fed up about the flouting of its ban on the importation of rice over its land borders. Smugglers bringing in rice from Benin appeared to be making a killing. The biggest contraband route was between Cotonou, Benin’s biggest city, and Nigeria’s commercial hub Lagos, which is just a few hours’ drive away,” it added.
According to the World Bank, Benin’s economy is heavily reliant on the informal re-export and transit trade with Nigeria, which accounts for about 20 per cent of its GDP, or national income.
And about 80 per cent of imports into Benin are destined for Nigeria, the Bank says.
“Nigeria is only allowing in foreign rice through its ports - where since 2013 it has imposed a tax of 70 per cent. The move is intended not only to raise revenue but also to encourage the local production of rice. But smugglers have been taking advantage of the fact that it is cheaper to import rice to Nigeria’s neighbours,” it added.
It further cited a report by Ships and Ports, a maritime newswire, to have disclosed that in 2014, Benin lowered its tariffs on rice imports from 35 per cent to seven per cent while Cameroon erased it completely from 10 per cent.
“And Nigerians’ appetite for rice is almost insatiable in a country where the grain is a staple. There was a time was when it was considered an elitist meal consumed only on Sundays. But now its affordability - plus the love for jollof rice - has made it a national dish,” it added.
It, however, pointed out that the Nigerian government’s action was not just about rice, saying, “Benin is also a major corridor for second-hand cars to Nigeria, where there is a ban on importing cars that are more than 15 years old.”
Official figures are difficult to come by, but Luxembourgbased shipping company BIM e-solutions says an average of 10,000 cars arrive at the Cotonou port from Europe monthly.
According to the Nigeria Customs Service, many are smuggled across the border.
The authorities also want to tackle smugglers going the other way. Many sell cheap subsidised Nigerian petrol in neighbouring countries.
Ghana’s Foreign Minister Shirley Ayorkor Botchwey said the country’s traders had incurred huge losses because their goods had been detained for weeks at the Nigeria-Benin border.
She advised the Nigerian government to “find ways of isolating the issues and the countries that it has problems with, so that Ghana’s exports can enter Nigeria’s market without being lumped up with all these issues that have emerged”.
Benin’s Agriculture Minister Gaston Dossouhoui described it as “a distressing sight” when he visited markets in the town of Grand Popo.
“It’s very difficult for our producers. It’s a disaster,” he was quoted by the AFP news agency as saying.
In an effort to mollify its powerful neighbour, Niger has since imposed its own ban on the exportation of rice to Nigeria.
But it is the border communities, where traders often criss-cross for market days, that are suffering.
BBC Hausa reporter Tchima Illa Issoufou in Niger said traders in two border towns she visited were unable to do business as most were not able to cross the border.
And a long line of lorries, most heavy with goods, stands at Maradi close to the border with Nigeria.
“The border closure goes against an agreement that guarantees free movement between the 15 members of the West African regional bloc – ECOWAS. However, it is legal for an ECOWAS member state to restrict the importation of certain food and agricultural products - and in 2004 Benin and Nigeria agreed to ban 29 foreign products from being imported into Nigeria.
“Yet Nigeria’s actions have many questioning its commitment to the historic AfCFTA free-trade agreement, which it signed up to in July that lays the foundation for the creation of the world’s largest free trade area and is intended to boost trade between African countries.
There are those who describe Nigerian President Muhammadu Buhari’s protectionist attitude as “Trumpian”.
But Kalu Aja, a financial analyst in Lagos, says the very fact that Mr Buhari signed AfCTA is proof that he is different from his US counterpart Donald Trump.
“Buhari is not being protectionist but seeking to protect the gains made in local agriculture, in rice especially,” he told the BBC.