On August 21, 2019, Nigeria took her West African neighbours by surprise when it announced the closure of its land borders along the west coast to all goods and imported items. Then, Nigeria, the most populous African country, explained that the action was to boost local production, ensure food security, curb illegal arm importation, among other security concerns.
As expected, some of the countries, especially Benin Republic and even Ghana kicked against the closure, insisting that the unilateral border closure was against all commercial and freedom of movement treaties signed under the Economic Community of West African States (ECOWAS).
Of course, the closure has had a devastating effect on Benin, Nigeria’s neighbour to the west, which has been a key exporter of foodstuff to Nigeria as well as many who do business across the border.
According to Edward Ansa, a Ghanaian economist and lecturer in Nigeria, the loss over the one year closure is more than $50 billion because no effort has been made to capture the value and volume of the informal trade that takes place among the West African countries along the coast, including the amount of smuggling that goes on across the porous land borders.
Sadly, one year after the border closure, the Nigerian government is not thinking of reopening it, rather it is counting the feats achieved with the action that has left many suffering across the ECOWAS coastal route.
BDSUNDAY checks revealed that the implementation of border closure policy has had its gains as well as negative economic impact evident in the high rate of inflation in the country.
The rise in the rate of inflation is mainly driven by rising food costs, which is ironic as the aim of the border closure was to drive down costs through increased local production.
A recent market survey shows that a 50kg bag of local parboiled rice, which was sold for N17,500 before the lockdown, now sells for N19,000, indicating a 9 percent increase in price.
Also, a 50kg bag of foreign parboiled rice, which was sold for N22,000 before the lockdown now sells for N27,000, indicating a 23 percent increase.
Capturing the situation, Kunle Amao, a business owner at Seme Border, noted that the past one year has been dotted with suffering as many who do business along the border have closed shop because of the border closure.
“Rice and fuel are the major items we business people move across Nigerian land borders, but they are now contraband because of the border closure. We are out of business because the Customs and Immigration officials will seize even a grain of rice, while bribe for smuggling is discouraging when you calculate how much to sell and make profit at the end of the day,” Amao said.
Iya Kalid, a onetime petty trader at the border, is now retailing food stuff at Ikotun market because of the high risk of crossing to buy items at the Benin Republic end of the border since the closure.
In like manner, transport companies along the west coast route are reducing their fleets due to the low patronage, the worst in a long while.
Chukwuma Ozoka, a driver with Chisco Transport Company, noted that passengers are shying away from their services because of the tortuous search and other embarrassing treatments passengers are subjected to at checkpoints and borders by officials.
“If you notice, most transport companies are not using the luxury buses again on the west coast route because of the long search by customs and immigration that delay passengers. The search is for smuggled items and the bus can be impounded if a bag of rice is found. Coupled with the bad roads, people are going after small buses, while many are flying,” Ozoka said.
At the Benin Republic end of the border, the story is the same. The country, which is the largest importer of rice from Thailand, according to data from the Thailand Rice Export Association, is losing huge foreign exchange as the huge volume of rice, imported and repackaged, can no longer be exported to final destination, especially Nigeria.
Small businesses that benefit from the importation and distribution value chain are now out of business in Benin Republic as Nigeria, the major patron, has stopped coming. Though the Beninese border officials do not harass their people like their Nigerian counterparts, the business booms from Nigerians crossing over to meet them at their comfort zone, Iya Kalid said.
Also, Ghana is reacting to the border closure by closing shops owned by Nigerians across their country, amid intimidation. Ansa regretted the action by his countrymen, noting that Nigeria should play a ‘big brother’ role by opening the border and encouraging her neighbours to breathe and accommodate her citizens too.
However, agencies of government have claimed that the policy has resulted in some economic gains for the country. This explains why the Federal Government does not seem to be in a hurry in reopening the border after several public outcries.
For instance, Nigeria Customs Service, the lead agency behind the enforcement of the policy, has claimed that its revenue has also increased since the borders were shut as Nigerian bound cargoes that usually berth in Port of Cotonu before they would be smuggled into Nigerian markets, now berth in Nigerian ports.
Hameed Ali, the comptroller-general of Customs, who made this claim, said that the Service has been recording between N4.7 and N5.8 billion as daily revenue higher than what it used to make before the border closure.
“We discovered that most of those cargoes that used to go to Benin Republic and smuggled into Nigeria are now forced to come directly to either Apapa or Tin Can Island. We have to collect duty on them. As a matter of fact, our revenue has not reduced; it is increasing as a result of closing the border,” Ali said.
This development was also confirmed by APM Terminals Apapa, operators of Nigeria’s busiest container port, when it said that the terminal has been experiencing substantial increase in volume of containers arriving through the seaports.
The terminal operator attributed the positive development to various government policies such as improvement in the implementation of Ease of Doing Business policy, the Agriculture Promotion Policy and closure of land borders.
On his part, Jonathan Nicol, president of Shippers Association of Lagos State, who noted that closure of Nigerian borders is not too good for trans-border business, said the policy negates the ECOWAS free trade treaty.
According to him, the border was closed prior to the outbreak of Covid-19 pandemic, mainly and purely for security reasons.
“The closure has had a major setback for businesses in Ghana, Togo and Republic of Benin. It also triggered action of smugglers in larger proportion because ECOWAS goods cannot move freely because of breaches,” Nicol said in a phone interview with BDSUNDAY.
Nicol, who stated that the border closer is long overdue for reopening as the lockdown is easing out, said there is need to open the border to official activities at the authorised border posts.
“From the short sighted vision, we believe business and movement is slow. But the Nigeria Customs claim to be making three times more revenue than when the border was open. This magic is commendable how they work it out.
“Much as revenue target is achievable, we do not see why the border should be open in a hurry. However, the after effect is reflecting negatively on Nigerians in Ghana, Togo and Benin Republic because there is no trade balance,” Nicol said.
While appealing to Nigerian government to re-open the land borders, especially the Krake- Seme border, for normal trading and free movement of ECOWAS citizens within the ECOWAS countries, he pointed out the need to protect the investments of Nigerians in other West African countries through achieving trade balance.
Meanwhile, Kayode Farinto, vice president of the Association of Nigerian Licensed Customs Agents (ANLCA), said that over 1,000 licensed customs agents that depend on the border for business, have been out of business with over 200,000 employees suffering job losses since the borders were closed.
He said that the continued closure of the land borders would also affect Nigeria when the African Continental Free Trade Agreement (AfCFTA) takes off, urging the government to consider reopening the borders for essential goods.
“Many people that move cargoes through the borders are now unemployed with many sick and not able to afford a living. In the spirit of ECOWAS, this border closure is not good for Nigeria. Now, we are trying to practice the AfCFTA but the closure also negates the agreement that Nigeria has signed. Government should have deployed security devices to reduce smuggling,” he said.
