Slow business take-off, smuggling greet border reopening
[FILES] An aerial picture on December 17, 2020 shows a part of the Benin-Nigerian border city of Krake, one day after Nigeria announced the lifting of borders’ closure. – Nigeria is lifting the closure of borders with neighbouring Benin and Niger which it imposed in 2019 to curb the smuggling of rice and other commodities, the government said on December 16, 2020. The closure had a major impact on Benin, a key exporter of foodstuffs to Africa’s most populous country via its port of Cotonou. (Photo by Yanick Folly / AFP)
• Losses Diminish Gains After Three Years Of Closure
Three months after the reopening of additional four borders, legitimate cross-border businesses have kicked off at an extremely slow pace, while smuggling spikes.
Meanwhile, traders using the Kwara and Niger state routes have continued to groan as the Chikanda border in the former and Babana border in the latter are yet to be opened.
Stakeholders believed that the closure did not achieve its objectives while Nigerians were made to undergo hardships in the last three years of border closure, even as the economy was worse than in the pre-border closure era.
In October 2019, following President Muhammadu Buhari’s directive, the federal government closed Nigeria’s land borders.
The decision was supposed to curtail the inflow of illicit arms and contraband goods, especially rice, into the country. Among other objectives, the decision was also aimed at boosting local rice production by stopping smugglers from saturating Nigerian markets with the already-banned foreign rice.
Specifically, the escalation of armed violence, resulting in killings across Nigeria, has for some time been largely attributed to Nigeria’s porous borders. This is said to significantly aid the smuggling of arms into the country. The situation was noted to also significantly undermine efforts to produce food locally as farmers, particularly in the north, live at the mercy of terrorists.
President Buhari expressed optimism that the border closure would go a long way in stopping the outflow of subsidised imported Premium Motor Spirit (PMS) popularly known as petrol, through unapproved routes into neighbouring countries. He justified the border closure with “the need to support the domestic agricultural sector and accelerate national productivity.”
The border closure shut out all goods coming from neighbouring West African countries of Benin, Niger, Chad and the Central African country of Cameroon. It brought enormous pains to traders whose goods were trapped at borders. Some of the goods, which cost billions of Naira got spoilt at the borders while some others were re-routed with extra cost, leading to huge losses to importers.
Worried by Nigeria’s action, the President of Ghana, Nana Akufo-Addo, Presidents of other members of the Economic Community of West African States (ECOWAS), the African Union, and the UN, had intervened to facilitate the reopening of the land borders to ensure free movement of goods and services between member countries.
President of Republic of Benin, Patrice Talon, personally visited President Buhari in January 2021, to plead for the reopening of the borders because of its adverse effect on his nation’s economy, which was reportedly on the brink of collapse. But after discovering that all efforts yielded no results, the Benin Republic retaliated and slammed a new import duty of CFA9 million (N6.5 million) per transit truck on Nigeria-bound cargoes transiting through the country.
With the policy, the country stopped over 3,700 Nigeria-bound cargo-laden trucks from Cote d’Ivoire, Ghana and Togo at Ilakoji, the border between Togo and the Benin Republic.
In the aftermath of Nigeria’s border closure, the debate on the advantages or otherwise of the move persisted among stakeholders across the country. While the positive impact of the closure was highlighted, a good number of commentators opined that its adverse effects on the economy outweighed the gains.
The general belief was that the border closure led to massive inflation, food insecurity and pervasive hunger across the country. And this much was reportedly echoed by Nigeria’s Minister of Finance, Zainab Ahmed sometime last year when she acknowledged that the federal government’s decision to close the border contributed to inflation. Many Nigerians questioned the wisdom behind the government’s decision to close the borders, saying, “It has only made a bad situation worse.”
In December 2020, in what seemed like a partial response to the pressure to reopen the borders, the Federal Executive Council (FEC), announced the re-opening of four major land borders, namely Seme, Illela, Maigatari and Mfun.
Sequel to that, in a circular titled, “Re-opening of four additional Nigerian border posts” signed by the Deputy Comptroller-General E. I. Edorhe, on behalf of the Comptroller-General of Customs, the FG recently reopened four additional borders. They include the Jibiya border post in Katsina State; Ikom border post in Cross River State; Idiroko border post in Ogun State; and Kamba border post in Kebbi State.
Edorhe informed all Customs formations and Joint Border Patrol Teams (JBPTs), to open the borders and ensure proper manning in compliance with extant operational guidelines.
The Nigeria Customs Service (NCS) stated that the border reopening was not an invitation to illegitimate trade and the importation of every manner of goods, especially those that could compromise national security. It noted that the reopening was to allow trade that could improve the economy and impact positively on people.
National Public Relations Officer of the Service, DC Timi Bomodi stressed that it is expected that international trade will resume through these borders in line with the fiscal policies of the government.
The Ogun Area 1 Command of the Nigeria Customs Service (NCS) has disclosed that youth restiveness which hitherto characterised the border closure had reduced drastically at Idiroko border.
The Customs Area Controller for Ogun 1 Command, Bamidele Makinde, said smuggling has resumed while urging Nigerians to embark on legitimate trade.
While evaluating the activities of the unit for the month of April 2022, Makinde said there is still skeletal business across the border.
“In terms of socio-economic effects, life is gradually coming back to the border areas. People that are ready for legal businesses are welcomed, but the restiveness among the youths is going down. The environment has changed, and people are responding,” he said.
Makinde, however, disclosed that a total number of 4, 603 bags of foreign parboiled rice each weighing 50kg, an equivalent of eight trailer loads were intercepted during the month.
Putting the Duty Payable Value (DPV) of the seizure to worth N82, 821, 337, the NCS Controller listed other items intercepted to include: 300 cartons of poultry products; 89 cartons of foreign wine; 35 cartons and 12 packets of tomato paste; 37, 450 liters of Premium Motor Spirit (PMS) popularly called petrol, packed in 1, 498 kegs of 25 liters.
Also seized were: boat engines, comprising five new ones and 14 fairly-used pieces of different brands worth N17.322million; 97 bags of African oil beans, three sacks of cannabis Sativa, 900 pieces of machetes, seven bales and seven sacks of foreign used clothing.
Other seizures include 2,195 pieces of foreign used shoes; 1,020 pieces/451 pieces of new/used ladies’ handbags; 22 cartons of Noni Berry daily drink and eight units of vehicles being used as means of conveyance.
Reacting to the reopening of additional borders, President, National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Lucky Amiwero, in a chat with The Guardian, said the closure of borders was not necessary ab initio.
He said the federal government made a very wrong decision because it made traders lose confidence in the country, even as it affected the nation’s reputation with neighbouring countries.
“There was no need to close the border because borders are entry points and Nigeria accedes to the ECOWAS treaty on the free flow of consignments and people from other countries. The border was closed abruptly; the action was not people-oriented. A lot of traders lost their goods and the economy suffered.
“All over the world, countries don’t close borders. You can only close borders in an emergency, for example, when there is a coup or war, among others.
“We must be professional and modern in our policies. If we have a problem, we only need to come out with tools to solve the border influx as it is done the world over. There are memorandums of understanding and conventions. We have trans-border crimes and mutual administrative assistance for Customs matters to solve these problems. There are 81 such agreements all over the world. How many does Nigeria have, even with close neighbours.”
Amiwero contended that the border closure has given the country a bad reputation. “When the border was closed, a lot of traders had their consignments stuck and got damaged. People died; people lost confidence in Nigerian trade. What have we achieved now with the closure. We have signed treaties and conventions but did not apply them.”
A reputable freight forwarder and former President, of the National Association of Government Approved Freight Forwarders (NAGAFF), Eugine Nweke also said the economic and social impact of the border closure was more negative than positive.
He said: “Within the period of border closure, it is on record that higher traffic of Nigeria-bound imports was re-routed to neighbouring ports within the region, thereby boosting trans-shipment activities.
At the end, the same imports found their way into the country via the international frontiers of the border and border stations. The reality is that all transhipment imports end up in the Nigerian market. It is left for the Bureau of Statistics and Customs to reconcile their records accordingly. This again leaves much to be desired as to the essence of the border closure.”
Nweke noted that smuggling activities, which were part of the reasons for border closure, still thrived during the period, saying: “It is one thing to close the officially approved border routes, while the unapproved routes thrive.”
Board Chairman of West African Association for Cross-Border Trade, in Agro-forestry-pastoral, Fisheries products and Food (WACTAF), Alhaji Salami Nasiru Alasoadua, told The Guardian that most of the borders have been opened, while only North Central borders are yet to be opened.
He appealed to the Federal Government to consider opening the borders in Chikanda and Babana.
He said the group has immediately begun stakeholders’ sensitisation to formalise trade and minimise security challenges.
To permanently resolve the issues of security challenges along the border area, he said the communities had to be considered and the leaders have to play important role in the policy of border management between the two communities that share borders together.
Former President, Association of Nigerian Licensed Customs Agents (ANLCA), Tony Nwabunike, also noted that “the reduction in trans border trade has contributed immensely to the weakness of the Naira against the dollar and other major currencies across the world.
He noted that Nigeria had lost more than 300,000 jobs while over 300 business outfits have been shut down due to the border closure.
Meanwhile, Kebbi State Commissioner for Commerce and Industry, Alhaji Garba Ibrahim Geza commended the federal government on the reopening of the Kamba border and expressed support for the NCS in the discharge of its statutory functions.
Geza expressed optimism that the reopening of the border would impact positively on Small and Medium Enterprises (SMEs) and youths in the state who stand to benefit most.
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