In August 2019, former Nigerian President, Muhammadu Buhari, ordered the closure of Nigeria’s land borders to all movement of goods, with no time frame given for the reopening.
Arbitrary trade protectionist measures across West Africa like the Buhari’s border closure directive are by no means novel. In 1994, the Ghana Investment Promotion Centre (GIPC) decided to increase the investment capital required of foreign-based businesses operating in Ghana, many of them Nigerian, to at least $300,000—a breach of its commitments under the Economic Community of West Africa (ECOWAS) Trade Liberalisation Scheme.
Trade between Nigeria and Benin also has an antecedent of suffering erratic outcomes. From February 1984 to 1986, Nigeria closed its borders with Benin due to the illegal smuggling of petroleum products out of Nigeria into Benin.
Aligning Nigerian for smoother trade flows across West Africa
There are a plethora of reasons why trade across West African corridors should face less encumbrances, but the most prominent may be ascribed to the potential economic windfalls of the African Continental Free Trade Agreement (AfCFTA)—the largest free trade agreement in the world by participating countries.
The World Bank estimates that the AfCFTA will increase Africa’s income to $450 billion by 2035 and boost intra-African exports by more than 81%. The UN Economic Commission for Africa (UNECA) also projects that the AfCFTA single market agreement will enable the African economy to reach the $29 trillion mark by 2050, thereby reducing endemic poverty among many women and young people in in the continent.
To reduce the challenge of political interference towards regional trade commitments, West African governments must prioritise regional integration and cooperation, regardless of political differences
In light of the projected benefits of the AfCFTA, the head honchos of Nigeria’s trade policy processes must begin to rethink their approach towards West Africa. Instinctive trade moves must be replaced with predictable trade policy between Nigeria and its neighbours.
Read also: NEPC seeks enhanced cooperation with banks to boost exports activities
In this essay, I will outline two of the ways by which politics and policy in Nigeria can find the right balance as it concerns Nigeria’s trade relations with West African countries:
1) Reducing political interference in regional commitments
The non-implementation of regional protocols and decisions by West African governments has been highlighted as one of the major constraints to regional trade reforms in West Africa. A good example of this is political incongruencies that have dogged the well-intentioned objectives of the ECOWAS Trade Liberalisation Scheme (ELTS).
The United States Agency for International Development (USAID) Trade Hub found substantial disparities between legislation and implementation of the ELTS has affected the full actualisation of the scheme. Indeed, Daniel Bromley, an African political economist has revealed that regional agricultural trade policy in Western Africa is only just a “a patchwork of rules implemented unevenly and enforced inconsistently, leading to an opaque business environment that severely limits the economic growth potential that agriculture possesses and significantly affects competitive access to food”.
To reduce the challenge of political interference towards regional trade commitments, West African governments must prioritise regional integration and cooperation, regardless of political differences. The full gamut of regionally integrative activities include the coordination of regional economic policies, regional security, human rights, health, education, research and technology and natural resource management.
Misalignments of real exchange rates between the anglophone and the francophone African blocs must be rectified while achievable regional targets must be set and met.
2) Reducing high prevalence of non-tariff barriers due to policy lapses
Closely related to political interferences to trade in West Africa is the high prevalence of non-tariff barriers that exist due to policy lapses.
In the Paper “Political and Economic Constraints to the ECOWAS Regional Economic Integration Process and Opportunities for Donor Engagement”, trade researchers Jakob Engel and Marie-Agnès Jouanjean decry the high prevalence of non-tariff barriers (NTBs) in Africa, an anomaly that is more prevalent in particular to agricultural goods.
Indeed, the World Bank has noted the barriers that West African farmers face in accessing inputs, including long delays to access new seed varieties, higher prices for fertilizers due to higher trade costs and inadequate institutions for the reduction of trade costs. Sadly, it has been observed that producers in Nigeria and Senegal pay three times as much as those in Kenya for nitrogen-based fertilisers.
To this end, policy making across many West African governments must be streamlined to reduce NTBs, increase regulatory efficiency, reduce procedural delays at borders, reduce highly technical safety requirements and crucially, provide traders with the much needed incentives, like finance, fertilisers, and many others.
Conclusion
The provisions outlined above for opening up trade across West Africa are by no means exhaustive. However, they are apposite. West African trade is only a victim of a myriad of challenges; yet, by reducing political interference to trade and cutting down excessive non-tariff barriers, trade across West Africa can flow better, thereby bringing along economic prosperity.
Olagunju is a lawyer, trade analyst and a member of the Ominira Initiative Free Trade Fellowship Program
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
