More than a year after the Nigerian government closed its land borders to trade, there is very little evidence to show that the much-trumpeted objectives of closing the borders have been met or will indeed be met in the short to long run. On the contrary, the closure of the nation’s borders has adversely affected economic activities, and thus shows the need for more practicable and shrewd strategies. Nosa James-Igbinadolor reports
On Tuesday, December 8th, 2020, President Muhammadu Buhari indicated he could reopen the country’s land borders “as soon as possible” after they were shut last year to control smuggling activities. “Now that the message has sunk in with our neighbours, we’re looking into reopening the borders as soon as possible,” he tweeted.
The President had earlier told state governors same day, that the closure of borders was “an attempt to control the smuggling of weapons and drugs”.
The country’s willingness to reopen its land borders had earlier been signalled by Finance Minister Zainab Ahmed, who said in November, that those involved had learned from the closure and were working together on joint border patrols.
The country, along with neighbouring Benin and Niger, agreed to set up a joint border patrol force to tackle smuggling between the nations after a meeting between their foreign ministers.
The country closed its land borders in late 2019 over concerns about illegal exports of price-controlled petroleum products and illegal imports of food stocks such as rice and poultry, which it believed harmed local producers.
“All goods, for now, are banned from being exported or imported through our land borders and that is to ensure that we have total control over what comes in,” Hameed Ali, Comptroller-General of the Nigeria Customs Service had said.
He had added that the country was “strategising on how best the goods can be handled when we eventually get to the point where this operation will relax for the influx of goods.”
The country said it wanted to reduce the smuggling of goods and stop illegal inflows of Asian rice and outflows of subsidised fuel. More essentially, Nigerian authorities justified the closure by the need to support the domestic agricultural sector and accelerate national productivity growth.
For a country that relies heavily on imports to feed its expansive population of some 200 million people, the effect of the border closure has been damning on the economy of the country as well as the economies of neighbouring countries. A report by the OECD noted that the closure had badly affected livelihoods in local border economies.
“In Benin, communities in areas close to the Seme border near the sea, or further up north near the Owode border, largely depend on Nigerian markets for their sustenance. The sudden shutdown has caused thousands of smallholder farmers to lose their produce and default on credits. In the Dendi region (an area that spans across northern Benin, Niger and Nigeria), economic networks are strongly integrated across borders. Small traders that live on these networks have lost their principal sources of income.
“Large numbers of Nigerians are also feeling the negative consequences of the closure. The shutdown is pushing prices up in Nigeria, notably of rice, a major household staple. In Ibadan, a city of more than three million inhabitants, the price of local rice increased by almost 9% in the month following the closure, the largest month-on-month increase since 2012. Prices of other foods such as palm oil, fish, meat and bread are also increasing, fuelling rapid inflation. This hits consumers hard in a country where food prices are higher than in the rest of the world at comparable levels of per capita income and approximately half of households’ budgets are spent on food.”
With Nigeria depending on food import for a tenth of its food needs, border closures and restrictions on movement during spring and summer months have also affected the availability of food in the markets.
“Food items are very expensive in the market. When you go to a store, they will tell you that is because the border is closed,” a shopper told Reuters last year.
Inflation in the country continued to expand, leaping from 13.7% in September to 14.2% in October, marking the highest reading since February 2018. According Bloomberg, “food prices have been a key driver of inflation in Africa’s most populous nation. The food index, which accounts for more than half the inflation basket, rose 17.4%”. Border closure has been a key driver of the rise in food prices and its subsequent effect on inflation.
“The rise in food inflation does suggest that border closures may have played a part in temporarily pressuring prices higher,” said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered.
The country’s food security situation is growing perilously. Despite the President’s attempt at boosting agriculture, the progress has not been significant enough to secure the country’s capacity to feed itself without credible volume of imports.
According to the Food & Agriculture Organisation (FAO), “in 2017, one in four Nigerians was severely food insecure, In Nigeria, government policies in agriculture have focused more on self-sufficiency than food security”.
This the international organisation asserts, has often led to impractical policies, such as a ban on rice imports, even though Nigeria does not produce enough rice to feed its population.
“Today, no country in the world produces all its food; not even North-Korea, a country which seems to have cut itself from the rest of the world. And the world’s biggest economies, U.S. and China are the two largest importers of food. In light of this, the laser-focus on food self-sufficiency enshrined in targets for rice, tomato paste, and others is downright bizarre.”
The closure of the borders was itself an assault by the Nigerian state on free trade. The action of the government punished legitimate local producers who sell their products outside the country, thus denying them the market critical to their business survival.
It wasn’t as if the border closure policy was enforced with total integrity. The selective bias in the operationalisation of the policy was well advertised when the Buhari administration recently extended significant trade benefits to the nation’s two cement giants by allowing them to export their products across the country’s land borders. The choice of both companies alone and the negation of other equally capable and competent manufacturing firms smacks of deliberate bias and reinforced the belief that some businessmen with the support of their political allies have captured the state for their narrow benefits.The discriminatory decision to allow the two manufacturing concerns to move their products across the borders of the country while stifling the capacity and ability of other companies to do the same served to make a mockery of government’s avowed objectives of closing the borders in the first place.
The closure of the country’s land borders has not significantly served the purpose for which it was instituted. As long as Nigeria is unable to produce and export products, it will continue to be a magnet for dumping of smuggled goods.
There is no credible evidence either that the long closure has succeeded in any significant way in reducing or stopping the smuggling of arms and ammunition into the country.
Smuggling into Nigeria mostly occurs in environments that are difficult for border control agencies to monitor and control. Smuggling routes are located in remote areas which tend to be deficient in any kind of border control or institutional presence.
The incapacity of the state to effectively use its border enforcement agencies, including the Nigeria Customs Service as well as the Nigeria Immigration Service to check unbridled smuggling into the country speaks to the fact that the security services aren’t in anyway fit for purpose, and that their capacity needs to be reappraised to ensure efficiency in discharging their mandate of protecting the borders and economy of the country.
At the end of the day, the closure of the country’s borders was nothing short of a sledgehammer that killed nothing. The borders need to be opened to allow for legitimate trade that will help grow the economy. It behoves on the government to find more savvy ways of dealing with the reality of Nigeria being a lucrative entrepôt for smuggled goods. Closing the borders wasn’t an intelligent move.