Nigeria backs down after 16-month border closure
• How Jan. 1 AfCFTA deadline forced Buhari’s hands
• Operators demand effective border policing
Despite concerns about Nigeria’s readiness to implement the African Continental Free Trade Agreement (AfCFTA), the race to meet the January 1, 2021 deadline appears to have forced the Federal Government to reopen the land borders, having recorded very little gains from its 16-month border closure.
The Federal Executive Council (FEC), yesterday, approved the recommendation of a committee for reopening of four of the nation’s land borders with immediate effect while stating that others would be “reopened in due course.”
This came following the submission of a report by the committee set up by the Council to examine the implications of the closure among others, led by the Minister of Finance, Budget and National Planning, Zainab Ahmed.
Addressing State House Reporters after Wednesday’s meeting of the FEC, Ahmed named the borders set for an immediate opening to include Seme and Mfun borders in the South West, and South-South, as well as Ilela and Maigatari borders in the Northwest.
The Minister, who explained that the other borders would be reopened before December 31, however, added that restrictions on the importation of some commodities, like rice and other products, would remain.
Fielding questions, Minister of Industry, Trade and Investment, Otunba Niyi Adebayo said the period of the closure afforded the authorities the opportunity to assess the security problems with a view to addressing them.
“We have many advantages to the border closure, it has given the security agencies an opportunity to access the problems at the borders, particularly with regard to smuggling.
“As you are all aware, before the border closure, a lot of petroleum products were being smuggled to West African countries and the border closures has created a situation that has tactically stopped that; they have been able to calculate the number of petroleum products being smuggled out by calculating the amount that is being lifted now compared to what was being lifted before.
“The issue of smuggling of rice to the country has reduced drastically and we are hoping that our agencies will be able to sustain that so also is the issue of poultry smuggling. “
OPERATORS had decried the closure, citing that the AfCFTA protocol was premised on liberalisation of intra-regional trade.
On August 21, 2019, President Muhammad Buhari shut the land borders in four geopolitical zones of the country, namely, South-South, Southwest, North-Central, and Northwest.
The President said the exercise, code-named “Ex-Swift Response,” was expected to “promote interagency cooperation and increase preparedness to address trans-border security challenges such as terrorism, armed banditry, smuggling, proliferation of small arms and light weapons, amongst others,”
However, facts showed that the exercise recorded little or no benefits in those areas, even as continuous smuggling eroded the little gains the border closure would have brought.
The closure had also created rancour between Nigeria and its neighbours, especially Ghana, while its economic impact remained severe for Nigerians who depend on imported foods and raw materials to address shortfalls in local production. Manufacturers, who exploit the West African market for expansion, were also affected negatively.
From rising food inflation to higher costs of logistics and loss of businesses to other suppliers in the global value-chain, the closure of borders might have spurred the domestic agricultural industry, but production capacity remains inadequate to meet rising food demand and raw materials.
While farmers craved that the borders remained shut for as long as possible for them to continue to enjoy a monopoly in local markets despite supply gaps, the Manufacturers Association of Nigeria (MAN) stated that the negative effect of the border closure was far-reaching and would linger, even after the borders would have been reopened.
According to the Q2 2020 foreign trade data from the National Bureau of Statistics (NBS), Nigeria’s trade with ECOWAS has been on the decline, with import dropping from N215.79billion in 2019 to N59.41 billion as of 2020 Q2, while export shrunk from N2.24 trillion in 2019 to N445.6 billion this year.
Afreximbank in its annual African Trade Report (ATR) released yesterday said the value of total intra-African trade fell by 5.23 per cent in 2019, reducing its overall contribution to African trade, from about 15 percent in 2018 to 14.4 percent in 2019.
According to the report, Nigeria emerged as the third-largest intra-African trade country behind South Africa and the Democratic Republic of Congo (DRC).
It stated: “South Africa maintained its position as the largest intra-African trade nation, accounting for 23.1 percent of total intra-African trade in 2019. The Democratic Republic of Congo (DRC) consolidated its position as a major contributor to intra-African trade, recording an increase of 10.4 percent in total trade with the continent to emerge as the second-largest intra-African trade economy in 2019.
“Despite declining by 4.7 percent, Nigeria’s share of intra-African trade remained constant at about 7 percent and Nigeria emerged the third largest intra-African trade country,” it stated.
The report estimates that informal cross-border trade (ICBT), dominated by women, serves as a source of income for about 43 per cent of Africa’s population.
MAN noted that its Export Group had suffered huge losses due to logistics issues caused by the closure, as it takes an average of eight weeks for carriers to ship and truck goods within countries in the same region vis-à-vis trucking through the land borders, which takes an average of seven to 10 days.
The producers added that increased traffic through seaports as a result of the closure had increased the perennial congestion at Apapa and Tin Can Island ports, leading to greater challenges to exporters and demurrage cost and other levies.
Director, Corporate Affairs, MAN, Chuma Oruche, described the news as cheery, based on the position of local producers before now.
“We hope exporters that have lost businesses would be able to regain lost grounds. We applaud the government for the initiative,” he said.
MAN, however, advocated a holistic approach that would address the root causes of the problem and provide mutually reinforcing solutions, rather than border closure, which is not a sustainable solution to the challenge of trade distortions and abuse of economic protocols by neighbouring countries.
To the Lagos Chamber of Commerce and Industry (LCCI), the decision is a welcome development that would be beneficial to the economy and in consonance with the recently ratified AFCFTA.
LCCI Director-General, Dr. Muda Yusuf, noted that many small businesses depended on cross-border trade for a living, while many manufacturers also leverage the ECOWAS Trade Liberalisation Scheme (ETLS) to boost their business and source their raw materials from countries in the sub-region.
Yusuf, however, reiterated the need to strengthen border policing and management mechanisms to avoid a relapse into the very conditions that led to the closure in the first place.
“The biggest challenge with border management is an institutional issue. We need to demand accountability from the institutions that have the responsibility for border policing and management,” he added.
According to the President of, National Association of Nigerian Traders (NANTS), Ken Ukaoha, while operators welcome the news (having canvassed the reopening), the group is also preparing its members to ensure that everyone plays according to the rule to avert border closure cycle,” he said.
“We hope that our members would no longer be seen as conniving with Customs and other agencies in allowing smuggled goods. The issue of insecurity and other trade concerns need to be addressed.
President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, described the reopening as a “good omen,” and urged the Federal Government to refine its procedures of operating the borders to the benefit of Nigerians.
“The border is a legal entry point, it is not a smuggling area. Under the provision of Section 18 of CEMA, the land borders are a legal entry point, just as the seaports are under Section 36 of CEMA.
“The border was closed without prior information to the trading public. A lot of people lost their cargoes; some people actually died in the process. So, it’s good that the government is considering opening the borders; we have actually called for it. That decision is good, even though it’s too late. Nigeria cannot sign into AfCTA and leave its borders closed. ”
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