For close to 3 months the Nigerian-Benin border has been closed leaving traders from the west of Benin stranded at the border. According to the Nigerian authorities, this was to restrain smuggling of goods through the borders into Nigeria. The major commodity instigating the closure is rice. Rice, and in addition all other goods which the neighbouring border countries are benefiting from. While rice is smuggled into Nigeria, fuel is being smuggled out.
The Smuggle
About 10 million litres of fuel are been smuggled out of Nigeria on daily basis. Smugglers do so to gain from the low prices by selling higher outside. Since 2013 when Nigeria imposed 70% tax on rice imports, the import of rice into Benin has shot up exponentially ahead of Nigeria’s drastic fall of import. In 2016 alone Benin imported nearly 1.4 million metric tonnes of rice from Thailand, while Nigeria’s official port figures shows that under 100,000 metric tonnes of rice entered the country (Thai Rice Exporters Association). Analysts point out that the 11.5 million population in Benin cannot consume that volumes of rice import of rice. Therefore, most likely they find their way into Nigeria. Nigeria’s appetite for rice is gargantuan. Their taste for foreign rice has also grown, while at the same time local production does not fully meet local demand. The conditions are thus perfect for the rice influx to thrive
Effects on sub-region
Nigeria being the superpower in the region in terms of size of market, the border closure is obviously having a massive impact on trade. The closure came in less than a month when Nigeria signed the AfCTA agreement. This is seen as a lip service by the Nigerian government to the AfCTA agreement. Though ECOWAS trade agreements supports the restrictions of agric produce entering the countries, the Nigerian-Benin border closure seem to be a slap in the face of the 15 neighbouring trade participating companies. Traders from all other parts of the sub-region who do not deal in any of products in conflict have all been lost out with billions of dollars being lost.
From Ghana
From the Ghanaian perpective, it fuels the more the agitations of the local trade union (GUTA) who have for some days aggressively campaigning for the shut down of foreigners shops, the larger portion of them being Nigerians. One Ghanaian beverage company, Kasapreko, was said to have lost over $2 million within two months of the border closure. The Ghanaian Foreign Minister, Sherry Ayorkor has advised the Nigerian government to “find ways of isolating the issues and the countries that it has problems with, so that Ghana’s exports can enter Nigeria’s market without being lumped up with all these issues that have emerged”. Of course, some are calling on whether Ghana cannot emulate the some part of what Nigeria is doing to also protect the local market.
The scary part is when no one seem to know when the Nigerian-Benin border closure would end.
In-country effects
The effect of the closure of the border has mixed outcomes for Nigeria. Rice prices have shot up by over 60% for foreign rice while local rice producers have also taken advantage to sell at over 100% more. However, the upside is that the Nigerian port is reporting a significant increase in the port revenues, with levels they have not collected before.
