Benin Republic looks to Nigeria as Sahel upheaval upends trade routes – APIEx CEO

Benin Republic is aggressively doubling down on its trade and investment ties with Nigeria amid a wave of military takeovers that left the country economically isolated from its traditional northern trade partners in West Africa.

With borders closed and sanctions up, revenue at the Port of Cotonou fell as Niger, Mali, and Burkina Faso began rerouting their trade to Togo and Guinea, who were more sympathetic to their military governments.

In this interview conducted one month after Benin’s own coup scare, Eric Akouche, chief executive officer of the country’s Agency for the Promotion of Investments and Exports (APIEx), sits with Bethel Olujobi to explain why Benin is doubling down on Nigeria and how it wants to achieve its trade goals, including the signing of a Memorandum of Understanding (MoU) and plans to establish direct flight routes.

Excerpts…

Benin has intensified trade engagements with Nigeria in the past year. Why now? And what specifically has changed in Benin’s calculus?

We know that Benin and Nigeria share a common border. We share history. We share families. We share people. And we share territory. So we need to do something together. The Nigerian market is a big market and we have been targeting that market for a long time. So you say why now? Today we are trying to understand how Nigerian businesses react and act. How we can gather Nigerian businesses and Benin businesses. So we found a way to partner.

For example, yesterday we signed a memorandum of understanding with the National Investment Promotion Commission (NIPC) to help APIEx to connect Nigerian businesses and Benin businesses.

Why now? Because now Benin has put a lot of reform, business reform in place that no one knows here in Nigeria. We have dedicated a special economic zone for manufacturing products. So we want people to know that Benin is a safe place.

Benin is a place where people can do business and live profitably. We have an industrial zone, we have textiles. We have cash processing in Syria. We have a lot of things. But now we want to target more and more Nigerian markets.

You talked about signing a memorandum of understanding yesterday. I recall that in June last year, there was an agreement that was signed between Nigeria and Benin. President Talon, in that same meeting, complained of logistical obstacles along the Lagos-Abidjan corridor, including unnecessary border checks and inspections. That was seven months ago. Since then, what progress has been made?

Many things are happening on the ground. In the agreement, both countries are setting up a joint committee where we will fight for every constraint, every difficulty. That committee is going to be in place right now. There is an agenda in the MOU. We have to fight for free circulation of goods and free communication. It takes time on a state level to set up a committee. On a business level, it is very short. But on a state level, it takes time to set up that committee. The committee is ongoing. We will see some positive action in the coming months.

What kind of things should we expect?

For example, yesterday, when we discussed with the NIPC, we discussed how to put in place a flight connection. This is practical. To come here to Lagos, you have to pass through Abidjan or Accra or Lome. It takes six hours to come here. If we have a direct flight, we can have a one-hour flight. So why not put a connection in place? This is a practical thing that we have to put in place.

They also requested us to set up our port authority office here in Nigeria. This is practical action. They requested us to put in place a private sector joint committee between Benin and Nigeria, both put together in one committee, one body. This is a practical action we can do. They also request us to put one APIEx staff within NIPC, so that when people come, the guy should be there, give information and assist them. So this is a practical action we want to do.

And most of this trade, you would agree, is mostly informal. There are billions unrecorded. And one thing investors always work with is data. How is APIEx working with Nigerian authorities to ensure that much of the unrecorded is formalised?

If you have any data and you need it for your business, I will be able to provide it to you. I act as a one-stop shop; I have a connection with the whole administration, the customs institution, the whole authority administration, the Ministry of Industry. If you come to me and request data, I will give it to you.

Today, informal business gives you some advantages when you are formalised. So, we are pushing people to be formalised. If you are formalised, then you will get exemptions. If you are not formalised, you are not going to get anything. So, people become more and more aware of the benefits that they can have if they are formalised.

So, if they are formalised, then they can get an investment goal, or they can be in a special economic zone, they can have exemptions, etc. So, they need to be formalised to be assisted by the government. To get any benefit, any certificate from the government, they need to be able to do more and more communication, to switch their mindset from informal to formal.

And let’s talk about policies. Nigeria still maintains import bans on several products. How much of Benin’s activities is affected by this, and how are you reacting?

You know, Nigeria is the first key economic partner of Benin. So, we are affected. That’s why we have been putting in place more and more action to have a better dialogue with the Nigerian authorities. In fact, we are connected to the Nigerian economy. And if it happens in Nigeria, it will affect us.

Is there anything that Benin or APIEx has done to ensure that trade is not affected by this?

No, not yet.

Not yet?

We started. We had a discussion yesterday with NIPC, with the joint committee between NIPC and APS. We didn’t do anything yet. We’ll do it. We know, so we’ll do it. The first thing is to know. The second thing is to act.

Regionally, the Sahel states have been exiting ECOWAS, so Benin is kind of isolated from its northern trade partners. This begs the question of is this renewed courtship of Nigeria is it a strategic recalibration, or is it an emergency pivot?

No, if you have Nigeria, we don’t need anybody else. Nigeria is our target in the economy. We want everybody to know that we are targeting the Nigerian market. We don’t want to follow it.

What is in the Nigerian market? 

Nigeria is Nigeria, my friend. You know Nigeria? It looks like China.

Can you say why China? Everybody knows why China. They have demography. Nigeria is the biggest economy in Africa. Then we have the chance to be close to Nigeria. Definitely. It’s our key partner. It should be. It has to be our key partner.

Given the prolonged Seme border closure, there was a time when nothing could move through, and then it became kind of a playground for smugglers. What is the new agreement that ensures that the shutdown does not happen again?

People were still moving around. People were still transferring goods between Benin and Nigeria. The border was officially closed. So no truck could pass. But both states are willing to work together. It was something that happened in the past. But now we want to do more friendly business. So I hope this will not happen again.