• Tuesday, April 23, 2024
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BusinessDay

Nigeria needs to reopen its land borders

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The reopening of Nigeria’s borders with Niger after a nine-month closure represents a significant shift in the country’s stance towards regional trade and diplomacy. This decision, though prompted by the ECOWAS Authority of Heads of State and Government summit, not only signifies Nigeria’s commitment to regional integration but also highlights the complex dynamics of border management in the face of political instability, economic needs, and security challenges.

In the broader context, Nigeria’s evolving border policy, especially since the closure under former President Muhammadu Buhari’s administration in August 2019 to combat smuggling and encourage local consumption, underlines the delicate balance between protecting domestic industries and facilitating cross-border trade. This is my attempt to explore the imperative of reopening Nigeria’s land borders, considering the multifaceted benefits of enhanced trade facilitation, regional cooperation, and food security, while also addressing the critical needs for improved border security, corruption eradication, and integration of the informal sector.

The socioeconomic imperative

Cross-border trade is a vital component of Nigeria’s economy, capable of offering a pathway to economic growth and development, especially in the African market. The closure of borders in 2019, though aimed at curbing smuggling and promoting local production, had significant economic repercussions. It disrupted the informal sector, which plays a crucial role in the Nigerian economy and across West Africa. Besides that, it led to the rising prices of several commodities.

The Global Initiative Against Trans-Border Organised Crime highlights the importance of informal cross-border trade (ICBT), which constitutes a substantial portion of intra-regional trade in Africa. For instance, in the Southern African Development Community (SADC), ICBT accounts for an estimated 30–40 percent of total intra-SADC trade, valued at approximately $17.6 billion. In West Africa, the informal sector is pivotal, contributing around 50 percent to Benin’s GDP and 90 percent to employment. These statistics underscore the significance of cross-border trade, not only for economic integration but also for livelihoods across the region.

Q: “That said, I’d like to believe that Nigeria’s decision to reopen its borders with Niger extends beyond economic implications; it is a gesture of political goodwill and a commitment to regional stability.”

While I’d rather advocate that we integrate the informal sector into the regional trade framework and get them into the tax net, I strongly believe reopening the borders will revitalise these economic channels, facilitating the flow of goods and services that contribute to regional economies. It will be a step towards harnessing the full potential of regional trade agreements and enhancing Nigeria’s economic growth by tapping into the broader markets within ECOWAS and beyond.

That said, I’d like to believe that Nigeria’s decision to reopen its borders with Niger extends beyond economic implications; it is a gesture of political goodwill and a commitment to regional stability. The sanctions imposed on Niger in the aftermath of the July 2023 military coup were part of a broader ECOWAS strategy to ensure a return to democratic governance. However, prolonged isolation and economic sanctions can have destabilising effects, exacerbating economic hardships for the populace and potentially fueling unrest. By lifting these sanctions and reopening the borders, Nigeria demonstrates a commitment to diplomatic engagement and conflict resolution, adhering to the principles of regional solidarity. Which is plausible, but now we also have to reopen all other closed land borders for the sake of our informal cross-border traders, who have been hit hard by this and the current economic realities, and to ensure the free flow of goods, which is good for all.

One of the critical aspects of cross-border trade is its impact on food security. The exchange of agricultural commodities across borders is essential for balancing supply and demand within the region, stabilising food prices, and ensuring access to food. The closure of land borders had adverse effects on food security, contributing to price hikes and shortages of essential commodities. By reopening the borders, Nigeria can facilitate the smoother movement of food products, which is vital for both producers and consumers across the region. Nevertheless, reopening the borders comes with its own challenges.

Addressing challenges: Security, corruption, and informal trade integration

While the benefits of reopening the borders are evident, Nigeria faces the formidable task of addressing the underlying challenges that necessitated the closure. Enhancing border security is paramount to preventing smuggling and illicit activities without hindering legitimate trade. This requires a multifaceted approach, including the deployment of modern technology, intelligence sharing among countries, and strengthening border patrols.

Corruption and inefficiencies within the customs and border management institutions are critical issues that compromise the integrity of border security and trade facilitation. Tackling these challenges involves comprehensive reforms, capacity building, and the implementation of transparent processes to ensure that trade regulations are enforced fairly and efficiently.

Moreover, integrating the informal sector into the formal economy is essential for maximising the benefits of cross-border trade. Policies and initiatives that provide support and recognition to informal traders can facilitate their transition to formal status, thereby expanding the tax base, improving regulatory compliance, and enhancing the socio-economic impact of trade.

In conclusion, the reopening of Nigeria’s land borders with Niger is a commendable step towards revitalising regional trade, enhancing economic integration, and promoting stability in West Africa. It acknowledges the significance of cross-border trade in fostering economic development, regional cooperation, and food security. However, realising the full potential of open borders requires concerted efforts to address security concerns, combat corruption, and integrate the informal sector into the formal economy. As Nigeria navigates these challenges, it sets a precedent for regional leadership and cooperation, paving the way for a more prosperous and integrated West Africa.