Let Us Rethink The Border Closure
A Yoruba proverb says, “When rain falls continuously and refuses to stop, we have no control over whose father it will drench.”
This aptly captures the present stance of President Muhammadu Buhari’s government on the closure of the Nigerian land borders. He continues to enact policies which causes Nigerians untold hardship and sufferings. As these policies continue, we do not know the next Nigerian who will bear the brunt.
In August 2019, after announcing to the world that Nigeria has achieved “full food security”, Nigeria initiated a partial border closure to stop illegal smuggling of rice, and other goods, across the borders. In October 2019, the comptroller-general of the Nigerian Customs Service, Hameed Ali, announced a total shutdown in trade across Nigeria’s land borders — including goods that had been moving legally.
Since the total shutdown, there have been several opinions on the merits and demerits of this action. A lot of people point to Nigeria’s trade deficit among its West African neighbours, calling out these countries for sabotaging Nigeria in its quest for food sufficiency and export promotion. However, can we please stand back and just take a look at the data…
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NIGERIA EXPORTS VS IMPORTS…
According to figures released by the National Bureau of Statistics, in 2018 Nigeria imported goods worth N74.7 billion from its West African neighbours, and exported N1.04 trillion. In other words, officially, Nigeria exports about 14 times more than it imports. Nigeria exports petroleum products, cocoa, oil seeds, fruits, tobacco, aluminium, plastics, etc. The Lee Group, for instance, produces 1.2 million pairs of slippers per day, the bulk of them being exported to other West African countries.
How then did we come up with the belief that Nigeria is being shortchanged by its neighbours? Perhaps because the illegal trade activities from smuggling across the borders is unaccounted for. In truth, goods like rice, textiles, alcohol, etc are being smuggled across the borders to Nigeria.
However, it’s important to note that just as goods are smuggled into the country, goods are also smuggled out to our neighbours. Goods like petrol, yams, palm oil, etc are being smuggled out of the country. With Nigeria said to be smuggling petrol worth N2 billion daily alone, this amounts to over N500 billion worth of exports. Leather goods like clothes, bags and shoes from Aba, Onitsha and Alaba are daily smuggled via land to as far away as Gabon and Equatorial Guinea. All these are not captured through the formal channels.
If we get our acts right, we can plow some of these funds into our national purse via customs duties.
My point is, even accounting for the illicit trade activities, Nigeria still exports multiples of its imports. The argument that the borders are closed because we spend scarce foreign currency on imports via West African land routes has never been tenable. Let’s quash the myth that we import more than we export forever.
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HOW BENEFICIAL IS THE BORDER SHUTDOWN?
With the total shutdown of the border, Nigerian businesses in need of raw materials for production are unable to access them. The Lee Group is no longer able to send its goods across the land borders due to the shutdown. As usual, it’s the small businesses that are being affected the most. Daily on Social Media, business owners bemoan their inability to keep their export businesses alive.
Even though the sea option is available for export, many Nigerian exporters including Cadbury and Dangote Group are reluctant to use it due to its high cost, as land movement has been calculated to be cheaper.
Because the border shutdown is also in contravention of ECOWAS protocol which states that there should be no barriers to intra-community trade and movement, ECOWAS has started to decline Nigerian goods coming from the sea and airways.
There have been reports of retaliations against Nigerians living in other West African countries. For instance, the Ghana Union of Trade Association (GUTA) recently shut down about 70 Nigerian-owned businesses in Ghana. GUTA had earlier stated that it was unfair for the Nigerian government to restrict access to goods from Nigeria seeing that this affects Ghanaian businesses depending on them. GUTA claims that 100 trucks of goods belonging to Ghanaians are locked up in Nigeria.
How did we get to a point when we can no longer live in harmony with our neighbours?
Even more striking, this week, the National Bureau of Statistics released inflation figures for October 2019. As a result of the partial border closure in August, higher food prices have pushed up the annual inflation to 11.61%. For perspective, historically during this period of the year food prices are usually at their lowest due to harvest. We thus recorded the worst October since 2009 in terms of food prices.
We can expect that the figures for November and December would be higher both in terms of food prices and inflation as a result of the total shutdown in October.
The GDP Report for the third quarter of 2019 came out while writing this. The Trade sector contracted by -1.45%. It contracted under the period July to September. The sector has been in free fall since the beginning of this year, meaning the sector is effectively in recession. Shockingly, we are still digging. I leave it to your imagination what the contraction would be for the fourth quarter, October to December 2019.
In a bid to help the people (well, that’s if helping the people is the goal), these policies have made life much more difficult for them.
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IS BORDER CLOSURE THE SOLUTION TO SMUGGLING?
In the past, I have written about our misplaced obsession with rice and import bans generally. But could there be any merit to the total shutdown of our land borders as the country is presently constituted?
Nigeria with a land mass of 4,000 square kilometre coverage has only 84 approved land border posts, yet is battling with illegal border openings of more than 1,400. In Ogun state alone, there are 83 illegal routes. With only 17,500 employees to man the land borders across the country, closing the 84 borders is virtually a waste of time.
How does closing the legal border posts lead to the closure of the over 1,400 illegal routes? How does the border shutdown fix the grossly understaffed Customs service?
The Customs service is not just understaffed, it has a reputation of being widely corrupt. Over the years, the service has been marred in numerous corruption and fraud scandals. An undercover investigation by The Cable in 2015 concluded that the Customs Service operates a corruption-tolerant system, renaming the agency, ‘Nigeria’s Customs of corruption, bribery and forgery’. Customs officials have over the years been fingered in aiding smugglers to circumvent goods passage through official channels from neighbouring countries. It was only in June 2019 that the Customs authorities remarked, “…some of our officers are useless, they disregard their responsibility… [having] tendencies of working outside the system…”
Should the focus be on policing the borders or making it less lucrative to smuggle goods?
According to the law of demand and supply, closing the legal borders and making smuggled goods more expensive at the destination only help to increase the demand for smuggling.
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BUT BORDER CLOSURE MADE CHINA GREAT…
In defending the borders closure, Customs boss, Hameed Ali pointed to China, “China…closed their borders…for 40 years to the whole world and today they are great China. Don’t you want to be great Nigeria?”
There is no greater Chinese history revisionism than this. The rise of China is well documented and none of it has attributed its greatness to shut off. If anything, the period of China’s shut off from the world led to the death of 56 million Chinese, according to Chinese historian Yu Xiguang. Policies during this era like the Great Leap Forward led to drastic decline in food output which caused tens of millions of death in the Great Chinese Famine.
In fact, the beginning of the prosperity of China led by Deng Xiaoping in 1978 is aptly called Opening of China.
Where did the Colonel get his history from? Or is he prophesying for North Korea?
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People and businesses are suffering as a result of these ill-thought-through policies, and it is unwise to refuse to listen to entreaties on policies negatively affecting the people. For what it’s worth, you do not burn down a house to kill a rat.
The Nigerian government has announced that the borders will only be opened on January 31, 2020. Whatever gains are made at the end of this period will be insignificant to the losses that would have been made through the decline in the standard of living of the citizens, worsening health of businesses, and the lack of goodwill towards the nation.
More saddening, this action would not curb smuggling going forward seeing that the underlying incentives for the sabotage are not being addressed.
With so much of documented history at our fingertips, it is unforgivable to refuse to learn…and open the borders NOW.