28 Oct 2019
NIGERIA: All Land Border Import and Export Banned
All trade across Nigeria’s land borders has been prohibited, while sea and air entry points are unaffected.
The ban was announced on 15 October 2019, when the Nigeria Customs Service (NCS) imposed an indefinite ban on all overland importation and exportation of goods with its neighbouring countries of Benin, Chad, Niger, and Cameroon as part of efforts to tackle rampant food smuggling. All goods must now pass through the country’s sea ports and airports, where scanners can verify whether goods are in compliance with relevant requirements.
Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning, speaking on the sidelines of an IMF meeting in New York on 17 October, said that the dramatic move was due to a lack of sufficient cooperation from adjacent countries under various existing trade agreements. Furthermore, she said that with Nigeria’s recent signing up to the African Continental Free Trade Area (AfCFTA), it was now imperative that all parties moved towards full compliance. She said: “We have, over the years, committed to some alliances and bilateral agreements, but our neighbours are not respecting them.” Ahmed also warned that the borders will not reopen until Nigeria receives credible commitments from its neighbours to enforce the terms of those agreements: notably, compliance with the Economic Community of West African States (ECOWAS) Protocol.
The impact on Nigeria’s economy has been mixed since the August partial shutdown. On the positive side, Hameed Ali, NCS Comptroller-General, said that since the borders were closed, about 10 million litres of petrol had already been stopped from being diverted out of the country, and producers of local food were making increased earnings. 317 suspected smugglers and 146 illegal migrants had also been arrested.
A big negative impact, however, is that the ban is resulting in higher inflation. According to Nigeria’s National Bureau of Statistics, the increase in food prices saw the annual consumer-inflation rate rise to 11.2% in September as a result of the partial border shutdown. This was up from 11% in August, and sharply reversed the downward trend experienced since May.
The ban is also hitting neighbouring economies hard. A big driver of the policy is that Nigeria wants to protect the higher prices charged by its indigenous rice farmers. Benin, for example, had become one of the world’s top importers of rice because of the Nigerian market. Almost all of the cheaper rice it imported came from countries such as Thailand or Indonesia, and then found its way into Nigeria through land border crossings.