The federal government’s reopening of more land borders will enable manufacturers to boost their cross-border transactions with access to larger markets, increase their profit and ease raw material sourcing, stakeholders have said.
In August 2019, the federal government, as part of its protectionist policy, decided to close the land borders to all movement of goods to end smuggling and ensure total control over what comes into the country.
According to economic experts, the border closure policy triggered inflationary pressure, caused unplanned losses for manufacturers, especially those exporting their products to neighboring countries by road, and paralysed commercial activities in larger communities.
Frank Onyebu, chairman of Manufacturers Association of Nigeria (MAN), Apapa branch, told BusinessDay that the borders should not have been closed in the first place, if they were properly secured from the activities of smugglers.
According to him, the country has very large and porous borders, which offer opportunities when properly utilised.
He said because of the closure, manufacturers were unable to get their raw materials or export their finished products to West and Central Africa by land.
Onyebu said manufacturers “are eager to resume transactions with neighbouring countries without the fear of paying heavy tariffs, passing longer routes with stressful processing and documentation, etc.”
He said: “The reopening gives room for manufacturers to explore other markets, expand their businesses and even diversify their portfolio.
“The manufacturing sector is at the brink of collapse as stakeholders deal with rising production costs, FX shortages, supply cuts, and tax burdens, among other issues; this will serve as a relief in this trying period.”
He advised that those manning the borders must be more effective and efficient in carrying out their activities to avoid another closure.
Anthony Ajulo, executive director at Colton Group of companies, told BusinessDay that during the period when borders were shut, moving goods from Nigeria to neighbouring countries was extremely difficult, adding that transit countries capitalised on that to exploit exporters.
“We tried to move some products to Ghana and we saw hell before it got to its destination; we also paid heavy tariffs to transit countries where the goods were subjected to constant checks,” he said.
Following the border closure, MAN reported that many local manufacturers exporting products across the border spent eight weeks as against eight days before the closure because they had to take their goods through a longer route with great cost implications.
Ajulo expressed hope that following the reopening of the borders, retaliatory and unfriendly policies of neighboring countries would be discontinued and export activities into other African countries would improve.
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In the fourth quarter of 2020, BusinessDay reported that Cadbury Nigeria could not bring in Hot Chocolate drinks from Ghana nor could the company export Tom Tom, Buttermint and cocoa intermediaries to West and Central Africa.
The confectioner reported a 14.42 percent decline in revenues from export sales to N3.3 billion in the nine months to September 2020 due to COVID-19 and the closure of the land border.
Data from the National Bureau of Statistics (NBS) revealed that in the fourth quarter of 2020, Nigeria earned N551 billion from exports to other African countries, down from N949.4 billion in the same period of 2019.
Following the partial reopening of four land borders in December 2020, exports to other African countries hit N773 billion in the same period of 2021.
The country’s imports from other African countries dropped to N105 billion in the fourth quarter of 2020 from N113 billion in the same period of 2019. By 2021, it improved to N161.4 billion.
“I don’t know what controls have been implemented to avoid a recurrence of the problems like smuggling, dumping, etc. However, I believe the impact of the reopening will not be immediate, probably in the next two months,” Usman Imanah, managing director and CEO of Friska Farms Limited, said.
He said regardless, this opens another opportunity for manufacturers to benefit from a larger market with fewer restrictions.
