The remodelling work being done by JDP Construction, the level of human and vehicular traffic and the volume of commodities moving through the Seme border is a spectacle. On a normal day, commodities worth several millions of Naira go in and out of Nigeria through the place.
Data from the Nigerian Customs Authority shows that government received an average of N22 million daily from Seme Border between January and October 2012. If on average, duty collected on each consignment was 5 percent of value (which of course is impossible since duties are often above 5%), then merchandise valued at more than N440 million must have passed through the Seme Border daily between January and October 2012. This is apart from those unaccounted for.
For a country which has over six ports operating at different capacities, why would Nigerians choose to bring things in through Benin? In response, some importers say the cost and speed of clearance is different, in favour of Benin Republic.
A cocktail of transfers
Like most international borders, a striking feature of the border is the huge, often overloaded, 18 wheeler trucks, which pull into Nigeria from Benin Republic. They not only tell of the massive importation activities of an import-dependent country but give an inkling to what Nigerians can profitably produce domestically.
The trucks bring in food items like fish and other frozen foods; light and heavy machinery like cars, trucks and other manufacturing equipments and production equipments; and products like footwear and domestic items. Given the necessary condition, most of Nigeria’s imports can be produced locally, especially food items.
Some of the rice which comes into Nigeria through Seme is from Thailand. Thailand has a population of 67 million; in terms of land surface it covers 514 thousand square kilometres, of which 0.4% is wet lands. On the other hand, Nigeria has over 166 million people, 924 thousand square kilometres of land surface of which 1.4% is wet land.
Clearly, in the case of rice, Nigeria has comparative advantage in production but production (cultivation and processing) is concentrated in the hands of local farmers not institutional producers; which is the problem. We need institutional investors in rice production. This is a business opportunity. This scenario is similar with other commodities Nigeria imports.
According to the Central Bank, “analysis of Forex utilisation by sectors revealed that US$6.47 billion or 66.72 percent of Nigeria’s Forex was spent on the importation of oil, industrial equipments, food and manufactured products in the third quarter of 2012. Food and manufactured products accounted for 19% and 16% percent of the total amount utilised.
The gladdening aspect
From the Nigerian side of the border, a sizable amount of commodities flow into the West African sub-region. Indeed, there are opportunities to export a variety of consumables for sale.
Every day, Nigerians exports consumables like soft drinks and wines, bread, plastic materials, vegetable oil and in some cases, raw leather through Seme Border. Once a trader or manufacturer is attuned with the procedure, business across the border becomes fluid. Possibilities of expansion exist for new entrants in the inter-border trade.
A tale of two countries
While Seme is a hub of activity, there is a draught of government assistance for the communities surrounding it. In the midst of the economic activities which they host, communities on the Seme border, which is Nigeria’s most lucrative land border, say they are neglected by government.
There are signs to prove this. For instance, the location of the Seme Border which is home to over seven banks, government agencies and an indigenous community has been without electricity for over two years.
Residents say, electric supply was distrusted when a truck ran into electric poles which supply them electricity. However the situation is different on the other side of the border as communities and businesses in that axis have power supplied to them by the Benin Republic government.
In the last two years, Nigerian banks operating in the Benin axis of the border have enjoyed electricity from the government of Benin Republic while their branches on the Nigerian side run generators. Major banks operating there include First Bank, Union Bank, Zenith Bank and Diamond Bank.
“Our government does not behave as if we are part of Nigeria; we see daily the amount of money custom officers and other government operatives collect from this border which is our ancestral home, while we do not even have good roads or government schools for our children,” says Abiola Ogundipe, a trader who runs a small eatery at the border.
A commercial bus driver who pleaded anonymity said “in those days it used to take 40-45 minutes to travel from Mile 2, in Lagos, to Seme Border. But these days it takes between 3-4 hours or more to do so.”
Between Mile 2 and Seme, there is no single kilometre of road which does not have several potholes or weeds encroaching into it; in some cases, the road is so bad that motorist have to cross to the other lane to continue their journey. The result has been an increase in cost of transportation and vehicular damage.
It costs twice to travel per kilometre in Nigeria than in Benin Republic. The Beninoise tolled their roads which lead to the border with Nigeria. So while a Nigerian travelling to Benin Republic will pay for use of their roads, his counterparts travelling into Lagos does not pay for using Nigerian roads.