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NIGERIA’S BORDER CLOSURE POLICY: APPRAISING ITS IMPACTS AND
PROSPECTS
i
TABLE OF CONTENTS
Table of Contents ……………………………………………………………..i
1.0. Introduction…………………………………………………………….1 - 2
2.0. Overview of Nigeria’s Border Closure
Policy............................……………………………………………………2 - 3
3.0. Concept of Protectionism Vis-a-Vis Free Trade………………….3 - 5
4.0. Nigeria’s Border Closure as a Protectionist Policy on a Path to Economic
Doom………………….5
4.1. Economic and Infrastructural capacity of Nigeria………………………5 - 6
4.2. Effects on Local Businesses……………………………………………..6 - 7
4.3. Reaction of the international community……………………………..…7 - 8
4.4. Inability to Meet Increase in Demand by Local Producers………….….8
4.5. Unemployment and Trade Loss…………………………………………8
4.6. Smuggling Practices…………………………………………………..…8 – 9
5.0. Does the Nigerian Border Closure Policy reflect the Nigerian foreign policy?
...........................................................................................................…..........9 - 11
5.1. Meaning of International Treaties ...................................................... 11
5.2. Nigerian International Trade Relationships and the Contravention of International Trade
Treaties............................................................................................... 11 - 13
6.0. Prospects and Positive Impacts of the Nigerian Border Closure So Far ……… 13
6.1. The Influx of Sub-Standard Goods in Nigeria............................. 13 - 14
6.2. Unfair Competition in the Nigerian Market................................. 14 - 15
6.3. Improvement in the Nigerian Economy since the Adoption of the Border Closure Policy
....................................................................................................... 15 - 17
7.0. Conclusion....................................................................................... 17
1
1.0 Introduction
International trade has been recognised as one of the bedrocks of international relations over
the years. It is the exchange of capital, goods and services across international borders and
territories which represent a significant part of the gross domestic product of most countries.
1
This concept of international trade owes its origin to the principle of comparative advantage
attributed to the works of economists like Adam Smith, John Stuart Mill and David
Richardo,
2
that if countries should specialise in the production of goods where they have
lower opportunity cost, then there will be an increase in economic welfare. This is because
countries are endowed with different raw materials and infrastructural capacities and thus
may produce the same goods more efficiently and sell it cheaper than other countries. Thus, if
a country cannot efficiently produce an item, it can obtain that item by trading with another
country that can. However, there is also the economist theory that encourages that countries
should produce all that they need so as to eliminate any form of economic dependence on
other nations. This latter theory divides international trade into two opposing views: free
trade, which encourages no limitation to trade, and protectionism which makes use of
protectionist policies like tariffs, import quotas and ultimately, government regulations like
border closure in a bid to regulate international trade.
On the 20th day of August 2019, President Muhammadu Buhari by an official press release
ordered a partial closure of the nation’s border due to massive smuggling activities, especially
the smuggling of rice. This closure is projected, in part, to help make the Nigerian economy
prosperous based on the age-old policy of import substitution, as well as ensure the
paramount protection of its citizens against oppression, illegal importation of sub-standard
goods, human trafficking, insurgency, among many other things. Arguments have however
ensued on the international trade treaties which have been breached by Nigeria as a result of
this move as well as the numerous negative impacts the border closure will have on the
Nigerian economy. Another propelling discussion is on the positive impacts which the border
closure policy is having on the Nigerian economy as well as on the welfare of its citizens.
This paper analyses the border closure policy in Nigeria; particularly, it espouses the negative
impacts of the closure on the nation’s economy, focusing also on the contraventions of
international trade treaties based on the border closure policy. Conclusively, the paper
supports the view that the border closure policy is not the best for Nigeria’s economy
1
Bela B. Paul.W, Romney. R et.al. “International Trade” Encyclopaedia Britannica
2
David Richardo. (1817). “On the Principles of Political Economy and Taxation”, London: John Murray.
2
presently and proffers practical alternatives to solve the problems which the supposed border
closure policy was put in place to solve.
2.0. Overview of Nigeria’s Border Closure Policy
Border closure is a protectionist policy that prevents the movement of goods or people
between different jurisdictions with limited or no exceptions associated with this movement
3
.
Following the worldwide drop in the price of crude oil in 2014, Nigeria’s economy declined
in 2015 and deteriorated by 1.6% in 2016
4
. The economic state of the country further
worsened until it fell into a recession in 2018. The fall in the value of the naira as a result of
shortages in foreign exchange and the plunge of foreign direct investment caused the
government to implement stringent policies. The crippling weight on the oil sector being a
major source of the country’s income got worse with the oil crisis. Consequent upon these,
the government believed that running an independent economy will suffice, which has led to
the border closure policy.
The recent border closure trend in Nigeria started in August 2019 when the President of
Nigeria, President Mohammadu Buhari ordered the closure of Nigeria’s land border with
Benin, preventing the import of goods
5
. The move was said to be in a bid to curb smuggling
of rice staple and associated corruption. Previously, on the 14th of October 2014 Nigeria had
ordered the closure of all of its borders with Benin as well as those with all other countries
thereby stopping trade flow with its neighbours for same reasons. The goods caught in the
ban include rice, poultry birds, frozen foods, weapons and ammunition, bagged cement,
second hand clothing and lots more. According to the National Statistic Institute, in 2017,
Cameroon imported 728,443 metric tons of rice against a population of about 24 million.
Niger imported rice worth $53.9 million, about 135 metric tons of rice for a population of 21
million
6
. The same year, Nigeria imported 1.3 million metric tons of rice for a population of
3
Wikipedia, ‘Protectionism’ (Wikipedia, 2019) https://en.m.wikipedia.org <Accessed February 16 2020>
4
Bukola Adebayo, ‘Nigeria Ranks Amongst Poorest Country’ (CNN, June 2018)
https://edition.cnn.com/2018/06/26/africa/nigeria-overtakes-india-extreme-poverty-intl/index.html <Accessed 2
December 2019>
5
John Campbell, “Buhari’s Orders Land Borders Closure in Long-Running Effort to Boost Rice Production”
(CFR, 2019) https://www.cfr.org <Accessed 16 February 2020>
6
Godwin Oritse, “Rice Remains Atop the List of Items Smuggled into Nigeria” (Vanguard, September 2018)
https://www.google.com/amp/s/www.vanguardngr.com/2018/09/rice-remains-atop-list-of-items-smuggled-into-
nigeria/amp/ <Accessed December 2019>
3
over 190 million people
7
. Thus, most rice products imported into border nations were
illegally exported through the land borders into the Nigerian territory.
It is important to note that the Nigerian border had been closed on several other occasions for
similar reasons as those proffered for the partial closure in 2019. In 1985, during the regime
of Maj. Gen. Buhari the border was closed due to severe human trafficking, smuggling of
drugs, agricultural produce, prostitution, child labour and insurgency. Also, President
Olusegun Obasanjo, in 2003, ordered the partial closure of the border due to an alarming
increase in crime rate along the Nigerian border. Principally, the border closure policy was
adopted by the Nigerian government in the interest of national development and economic
growth. In order to achieve this, the implementation of the policy was geared towards
checking the influx of substandard goods and unfair competition in the Nigerian market as
well as curbing smuggling.
President Mohammadu Buhari’s government in effect restricted the import of rice in order to
encourage Nigerian rice production. In this light, the policy was implemented as a
protectionist policy. This border closure policy has raised a lot of whirlwind amongst the
masses and the international community. Some Nigerians have expressed satisfaction
especially those into farming while others have expressed their dissatisfaction especially
those into the trade business. Mr Bimbo Ashiru, former Commissioner of Commerce and
Industry, Ogun State expressed his concern on the increased dumping of goods by
neighbouring countries into Nigeria and sees the border closure as a preventive measure to
such
8
. However, many have expressed concerns as to the danger head of this protectionist
move.
3.0. Concept of Protectionism Vis-a-Vis Free Trade
Protectionism is an economic policy of restricting imports from other countries through
methods such as tariffs on imported goods, import quotas and a variety of government
regulations. It refers to trade policies that protect local businesses from foreign competition.
It could take the form of import tariffs, import quotas, trade embargoes, and local subsidies.
Some have argued that no major country has ever successfully industrialised without some
7
Supra
8
Godwin Oritse, “Rice Remains Atop the List of Items Smuggled into Nigeria” (Vanguard, September 2018)
https://www.google.com/amp/s/www.vanguardngr.com/2018/09/rice-remains-atop-list-of-items-smuggled-into-
nigeria/amp/ <Accessed December 2019>
4
form of protectionism. An open border or free trade system on the other hand is one which
allows free movement of people and goods between jurisdictions with few or no restrictions,
thus, lacking substantive border control. An open border has, over the years been the stimuli
for robust economic development in presently developed nations of the world. It has been
largely argued that the effect of the protectionism theory (border closure) on an economy can
be likened to that of a double-edged sword, either shielding businesses and workers of the
import-competing in the country from foreign competitors as well as checking the influx of
sub-standard goods in the country and ultimately, checking the unfair competition that arises
as a result of this influx; or serving as an instrument of economic doom by reducing trade and
adversely affecting consumers in general, raising the cost of goods and harming producers
and workers in the export sector both in the country implementing it and the country against
which it is implemented. Another view is that numerous international treaties to which
Nigeria is a signatory have been largely contravened by this policy. However, in light of
these views one cannot ignore a confluence of all these arguments in the present border
closure policy adopted by Nigeria. An analysis of international protectionist countries is
pertinent at this point.
China is one country that is notable for its protectionist policies. In the 2000s, it was the
centre of the world trading system dominating both Asia and intercontinental change.
However, it was not satisfied with this role and decided to pursue a less interdependent, self-
contained economy and pioneered the Made in China 2025 initiative with a goal to achieve
70% self- sufficiency in its industries by 2025. As rosy as this sound, according to the
International Committee, this is a troubling development in that it not only creates a new
competition for U.S, Japanese, European and South Korean companies but also disrupts
global supply chains leading to China’s de-globalisation at a very rapid rate. Despite the fact
that many have asserted that a world of self-contained national supply chains is probably
going to be less efficient and more dangerous than a world of distributed international
production, there has been minute positive trajectories in the production of some previously
imported goods due to China’s protectionist policy.
9
Singapore is another country with significant protectionist policies. Trade protectionism is
cited as the top risks by local economists as suggested by the Monetary Authority of
9
Noah Smith “China is the Biggest Protectionist Threat” (Bloomberg, 2019)
https://www.bloombergopinion.com <Accessed 13 February 2020>
5
Singapore (MAS)
10
. There have been gains as well as damages due to Singapore’s
protectionist policies. Some of its problems include; local business unproductivity, retaliatory
tariffs or protectionist policies from other countries, export constraint by internal producing
companies amongst others.
11
In the 1950s and 1960s, governments of many countries in Africa and Latin America
erected trade barriers. The plan was to enable the industries of their countries to grow,
“protected” from outside competition. What actually happened was the opposite. Although
the industries in these “protected” countries grew for a short period, the lack of competition
meant that their industries became inefficient and fell behind the rest of the world. Also,
because imports were very expensive or even unavailable, their costs of production rose as
they were stuck using old technologies. Soon, these “protected” industries were producing
goods that few people wanted, exports fell and, in many cases, the industries had to be
subsidized by the state in order to keep them afloat. Governments paid for these subsidies by
taxing farmers (either directly or by forcing farmers to sell to marketing boards) and by
borrowing – one of the reasons why so many African and Latin American countries have
such large debts. Some governments, such as Brazil’s, printed money to pay off the debt and
this led to hyperinflation, reduced confidence in the economy and massive disinvestment.
Many Nigerian Economist fear that the same may befall the Nigerian Economy sooner or
later with her continuous entanglement and increase in national debt and, particularly, the
border closure policy.
4.0. Nigeria’s Border Closure as a Protectionist Policy on a Path to Economic Doom
It has been widely expressed that blocking trade in the hope of giving domestic infant
industries a chance to grow, as well as protect citizens, hurts the economy. Specifically, it
harms the country’s economy long term prospects. Below are some of the arguments
canvassed on why the border closure policy will slowly lead to economic doom for Nigeria.
4.1. Economic and Infrastructural Capacity of Nigeria
The economic and infrastructural conditions of any country must be considered and reflect in
its economic policies both nationally and internationally. Thus, the big question is whether
Nigeria, regarding its economic and infrastructural status, is capable of running an
10
Michelle Zhu, “Trade protectionism, the Biggest Threat to Singapore’s Economy; MAS Survey” (Edge
Singapore, 2018) https://www.theedgesingapore.com <Accessed 14 February 2020>
11
Supra
6
independent supply chain. Although it is not a total witless exercise in light of reducing
import expenses, curbing smuggling and tackling insecurity, to run a closed border policy;
however, this requires the institution of infrastructural facilities to aid efficient production of
otherwise imported goods for the masses. However, the infrastructural facilities and
economic condition of the country are not sufficiently buoyant to carry the burden of sole
production of its goods. For instance, a ban has been placed on the importation of rice but are
there sufficient mills to aid the production of a quantity that would meet the demand of the
consumers? Following the implementation of the closed border policy, the price of rice and
other commodities skyrocketed. A bag of rice that was previously sold at NGN13, 000 and
NGN15,000 skyrocketed to NGN20,000/NGN25,000 an increase rate of about 40%
12
.
Business Day also reports that Nigeria’s trade sector has slumped into recession as economies
across the nation’s land borders remain grounded
13
. According to the reports of the National
Bureau of Statistics (NBS), the trade sector shrank by 1.45% in the third quarter of 2019 from
a decline of 0.25% in the preceding quarter
14
. These factors contribute to the reduction of her
comparative advantage and make sole production too much of a burden to carry.
4.2. Effect on Local Businesses
The question also arises as to the effect of this policy on local businesses. What happens to
businesses that run on these goods which might not be readily available or are sold at high
prices because of monopoly? The cost of running such businesses will definitely increase and
the burden will fall back on the citizens and lead to higher cost of living. For instance, a
restaurant which used to make use of a bag of rice daily sold at NGN13,000 starts spending
NGN20,000 daily on a bag of rice due to the increase in the cost of goods after the border
closure, will increase the price per serving. A person who gets satisfied after a serving of
NGN100 will have to spend more to get that level of satisfaction in the present time. This is
in a country yet to implement the minimum wage for workers. Increase in the price of staple
foods especially rice which is one of the most popular foods in the country will make many
Nigerians worse off.
In free market economies, the existence of market competition takes its toll in reducing lousy
products in the market; as such every business is inclined to make good products that can
12
Business Day Reports, “Economics of Border Closure” (Business Day, 2019) https://www.businessday.ng
<Accessed 17 February 2020>
13
Oluwasegun. O., ”Nigeria’s Trade Sector Slumps into Recession amid Border Closure” (Business Day, 2019)
https://www.businessday.ng <Accessed 17 February 2020
14
Supra.
7
favourably compete in the market. However, a protectionist system like the border closure
policy stifles this process. Domestic companies will no longer need to compete with other
imported goods resulting in local monopoly, inflation and most times sub-standard goods.
Not only will there be a lack of international competition, but also a slope in innovation, and
goods become more expensive. Food or items that do not grow or are not produced simply
disappears from the market in the country resulting in accumulation of debt due to the
imbalance between money spent on industries and lack of growth. Therefore, while there is a
purported benefit, it is only short term and will bring about difficulties in the long run. When
such goes on for a long time it will generate an economic problem, in that when domestic
businesses remain uncompetitive for too long it becomes difficult to reverse protectionist
policies.
15
4.3. Reactions of the International Community
Another area of concern is the reaction of the international community, retaliatory
protectionist policies and stifled trade flow for the country. Border closures are not new in
Africa, but Nigeria’s actions raise serious concerns about the seriousness and prospects of
regional integration in Africa. Nigeria’s epic decision came just three months after she signed
the African Continental Free Trade Agreement. The agreement was aimed at creating the
world’s largest free trade area and promoting intra-African trade. Closing its borders three
months later is a deflection from that pact. Even though the major regional blocs African
Union (AU) and Economic Community of West African States (ECOWAS) have not taken
any drastic steps towards the policy, largely because of the important place of Nigeria in the
continent, Nigeria faces a threat of retaliatory trade policies from other countries in the
nearest future; for instance many of these countries who used to import oil from Nigeria
might cut trade relations and start importing form other countries which would constitute a
big blow on our national revenue. Other countries will not sit back and bear the brunt alone,
if they cannot sell to Nigeria, they will ensure that Nigeria does not sell to them either. Such
situation will be unfavourable to Nigeria’s export trade and will tell on her Gross Domestic
Product. This might result in a deadlock in trade flow or what is termed a ‘protectionist
spiral’ and protracted conditions like this could lead to trade wars. Some industries do not
rely on the domestic market like the petroleum industry, so in order to make profits, they
need to export to other countries that need it, but what happens when protectionist policies
15
Ryan Ong, “What is Protectionism, and How Will it Affect your Wallet” (Singsaver, 2016)
https://www.singsaver.com <Accessed 17 February 2020>
8
like border closures are put in place? Other countries might raise their own retaliatory
policies which will prevent them from buying abroad and the protectionist policy that was
meant to help domestic companies will become a threat to them.
16
. It is also oxymoronic that
we run such policy and belong to the World Trade Organisation (WTO) which is concerned
with the regulation of international trade between nations and prohibits discrimination
between trade partners. Nations depend on each other a lot more than we can imagine
because of their different comparative advantage, thus, if retaliatory actions are taken against
Nigeria now or in future based on the present border closure crisis, the effect may be
devastating.
17
4.4. Inability to Meet Increased Demand by Local Producers
It is not certain as to whether Nigerian farmers are ready for the increase in demand that
followed the border closure and have not been able to react fast enough to take advantage of
it. Thus, there are concerns about whether domestic food production can meet demand of a
population of over 200 million people. In 2017 alone, the demand for rice in Nigeria reached
6.7 million tons almost double the 3.7 million tons produced domestically and this has
contributed to the drastic increase in price
18
. This is good for the farmers but very bad for
consumers.
19
4.5. Unemployment and Trade Loss:
The implementation of the border closure policy not only saw the laying-off of a lot of
workers especially in the import and export business, but also in other local businesses as
well as significant financial loss to these businesses. Most importers of perishable goods,
valued at millions of naira had their consignment of goods trapped in Cotonou for several
weeks because the Seme and Idiroko borders were closed without warning, resulting in huge
financial loss and debt for those operating on loaned funds. Asides these, a lot of workers and
labourers got laid-off thereby increasing unemployment in the society.
4.6. Smuggling Practices:
16
Supra
17
Akinkuolie. R., “Nigeria’s Border Closure: Pros, Cons and Consequences” (Punch Nigeria, 2020)
https://www.google.com/amp/s/punchng.com/nigerias-border-closure-pros-cons-and-consequences/amp
<Accessed 18 February 2020>
18
Tahiru .A.L.(2019). “Nigeria’s Border Closure Has Implications for Africa’s Economic Integration”
https://www.google.com <Accessed 18 February 2020>
19
Supra
9
This is the most glaring of all the face off from the protectionist border closure policy. This is
because it happens to be one of the acclaimed major reasons for its implementation. As
reported by Channels TV
20
, smuggling practices have doubled since the implementation of
the border closure policy with the discovery of about 1000 illegal routes into the country.
This does not only serve to defeat the purpose of the protectionist policy, the entrance of
inferior goods and contraband goods have also increased, making the country the feared
dumping ground. This aside, the revenue that otherwise would have been made via import
duties is now lost. The Comptroller General of the Customs Service, Col. Hameed Ali (Rtd.),
lamented on this issue to Punch news where he complained that rice and other prohibited
goods still find their way into Nigeria despite the county’s protectionist policy. He also
disclosed that the Nigerian Customs Services has intercepted smuggled Pangolin scales
valued at N10.26bn and seized $8.06m cash off the tarmac at the international wing of the
Murtala Mohammed Airport
21
. According to him, ‘the fact that we have border closure and
people still bring rice and other items into the country shows that we have a natural tendency
to commit crime…before you know it, illicit drugs, weapons and other dangerous materials
will come in and your children and relations will become victims of these dangerous items’.
The effect of smuggling on the economy is a serious problem as it deprives the government
of revenues from uncollected taxes and custom duties; it also affects local industries by
distorting prices of commodities, causes production slow-down which leads to mass lay-offs,
bankruptcies and lower tax-collection. Thus, while the intention of curbing smuggling is
laudable, Nigeria seems to be experiencing a counter-effect.
These impacts are only those which are telling on the Nigerian economy already. All these
aside, there have been serious discussions in the international sphere as to the breach of
international trade treaties and agreements to which Nigeria belong, as well as the non-
reflection of the nation’s foreign policy with the adoption of its border closure policy.
5.0. Does the Nigerian Border Closure Policy Reflect the Nigerian Foreign Policy?
20
Channels TV, “The Big Story” (Channels News, 2019) https://youtu.be/IZPHnuZfok <Accessed 18 February
2020>
21
Supra
10
A greater bulk of literature on the border closure policy in Nigeria has veered towards the
view that the Border Closure Policy does not in any way reflect the Nigerian Foreign Policy
22
and this is the view adopted in this paper.
A foreign Policy refers to all actions made by a country with regard to other states or
international bodies
23
. The action of one state inevitably affects other countries and may
create imbalances and shifts within the international system therefore, shaping the
international scenarios and modifying international relations theories. Safeguarding a
Nation’s national interest can therefore be seen to be the basic aim of a Nation’s foreign
policy. Accordingly, Nigerian national interests include creating relevant political and
economic conditions in Africa and the rest of the world, with the promotion and improvement
of economic well being of her citizens.
The idea of Africa being the centre piece of Nigeria’s foreign policy is premised on the
understanding that Nigeria’s engagement in the international sphere will be looked at through
the binoculars of Africa
24
. Nigeria’s present actions raise important concerns about the
seriousness and prospects of regional integration in Africa. It also establishes a bad precedent
that could reduce other countries’ commitments to economic integration in Africa.
Today, one in three Africans live below the poverty line, which is approximately 422 million
Africans and on the projection of the world poverty clock Nigerian has overtaken India as the
country with the largest number of people living in extreme poverty, with an estimated 87
million Nigerians living on less than six hundred Naira a day (1.90 $)
25
. Now, more than
ever, a strong union should be forged with other African countries to combat poverty in
Africa with an outlook from their Foreign Polices.
Nigeria’s Border Closure has greatly affected trade relations with other African countries and
statistics show the constant incremental rise in the prices of goods. The demand for rice in
22
Stephen Osaherumwen & Kafilat Adebayo, “An Analysis of the Nigerian Foreign Policy: A Narrative”
(Research Gate, 2019)
https://www.researchgate.net/publication/321034775_An_Analysis_of_the_Nigerian_Foreign_Policy_A_Narrat
ive <Accessed 10 February 2020>
23
Arvind Panagariya, “Think Again: International Trade” (Foreign Policy, October 2009)
https://foreignpolicy.com/2009/10/29/think-again-international-trade/ <Accessed 10 February 2020>
24
Stephen Osaherumwen & Kafilat Adebayo, “An Analysis of the Nigerian Foreign Policy: A Narrative”
(Research Gate, 2019)
https://www.researchgate.net/publication/321034775_An_Analysis_of_the_Nigerian_Foreign_Policy_A_Narrat
ive <Accessed 10 February 2020>
25
Bukola Adebayo, ‘Nigeria Ranks Amongst Poorest Country’ (CNN June 2018)
https://edition.cnn.com/2018/06/26/africa/nigeria-overtakes-india-extreme-poverty-intl/index.html <Accessed 2
December 2019>
11
Nigeria has reached over 7 million tons which is almost double the 4 million tons produced
domestically
26
. Since the Border Closure the price of a 50 kilogram bag of rice has increased
with minimum wages set at 30,000 naira
27
. This contradicts the aim of the Foreign Policy
which is centred on the improvement of economic well being for citizens. Progressively,
Nigeria has contravened many international treaties following its introduction of the border
closure policy.
5.1. Meaning of International Treaties
International Treaties are primary sources of international agreements between States and/or
international organizations
28
. They serve to satisfy a fundamental need of States to regulate,
by consent, issues of concern, and thus bring stability into their mutual relations
29
. As an
instrument for ensuring stability, reliability and order in international relations, treaties are
one of the most important elements of international peace and security.
Ever since Adam Smith published the wealth of Nations in 1776, the vast majority of
economists have accepted the proposition that free trade among nations improves overall
economic welfare
30
. Countries in light of this have subsequently created Trade Agreements to
regulate international trade between Nations.
5.2. Nigeria’s International Trade Relationships and the Contravention of International
Trade Treaties
The Nigerian government adopting the principles below established international trade
policies which encompasses actions they will take to protect the best interests of their citizens
and ultimately, the economies of the world.
Nigeria is a party to the African Growth and Opportunity Act (AGOA), which is a US trade
Act that grants products from 40 sub-Saharan African countries (including Nigeria) duty-free
access to the US market
31
.
26
Chidi Odinkalu “Legality of Closure of Nigeria’s Land Border Could Be Tested at ECOWAS Court”
(ECOWAS, October 2019) https://www.prod.courtecowas.org <Accessed 13 February 2020>
27
Supra
28
Kale Emmerich “International Trade Treaties” (Enotes, 2020) https://www.enotes.com/homework-help/what-
is-international-trade-policy-what-is-the-668910 <Accessed 11 February 2020>
29
Supra
30
David Richardo. (1817). On the Principles of Political Economy and Taxation, London: John Murray.
31
Douglas A. Irwin, “International Trade Agreements” (Ecolib, 2019)
https://www.econlib.org/library/Enc/InternationalTradeAgreements.html <Accessed 12 February 2020>
12
Nigeria also signed a Joint Declaration on Cooperation with the European Free Trade Area
(EFTA) on 12 December 2017 in Buenos Aires, on the margins of the 11th World Trade
Organisation Ministerial Conference. This Declaration sets the framework for Nigerian trade
agreements with EFTA States. Nigeria has signed 16 bilateral trade agreements and nine
memorandum of understanding
32
. Nigeria has also signed a Trade and Investment Framework
Agreement with the US. This agreement provides for dialogue on improving and enhancing
trade and investment opportunities between the two countries.
Nigeria is a founding member of the African Union and the Economic Community of West
African States (ECOWAS). ECOWAS created the Trade Liberalization Scheme which was
established in 1990 to achieve an effective free trade area within the ECOWAS. All members
of the ECOWAS, including Nigeria, have been implementing this scheme since 1990
33
. Other
ECOWAS-related schemes include the ECOWAS Protocol of Free Movement, which
establishes the right of entry, residence and establishment of ECOWAS citizens in the region.
In August, just three months after celebrating the signing of the African Continental Free
Trade Area Agreement (AfCFTA), Nigeria slapped a ban on the movement of all goods from
countries with which it shares a land border: Benin, Niger and Cameroon, effectively banning
all trade - import and export - with these neighbors.
Although the Nigerian National Assembly has not ratified the AfCFTA in accordance with S.
12 of the 1999 Constitution Federal Republic of Nigeria, the closure of the Nigerian border
goes against the spirit and as of July 2020, the letters of the AfCFTA and one cannot ignore
the good intentions and will for the African Continent that went into the drafting of the
AfCFTA which Nigeria now works against with the border closure policy. Reflecting Agenda
2063, the AfCFTA aspires to “create a continental market with the free movement of persons,
capital, goods and services”. By responding to a trade problem through unilateral border
closure, Nigeria defies the provisions of the AfCFTA to which it committed only a few
months before its protectionist policy.
Nigeria’s recent border closure is also inconsistent with its 44-year long commitment to the
Economic Community of West African States (ECOWAS) - West Africa’s Regional
Economic Community which Nigeria spearheaded in 1975 and is one of the eight building
32
Supra
33
Supra
13
blocks of the AfCFTA
34
. Under the ECOWAS Protocol, member states committed to the
establishment of a common market, including “the liberalization of trade by abolition, among
Member States, of customs duties levied on imports and exports, and the abolition, among
Member States, of non-tariff barriers in order to establish a free trade area…”
35
Similarly as a member of the World Trade Organization (WTO) since 1995, Nigeria is bound
to comply with similar commitments at a multilateral level. Its most recent border closure is
inconsistent with Nigeria’s key multilateral commitments.
To prevent the AfCFTA from entering the history books as yet another set of failed
aspirations, it is imperative that African leaders signal that they are committed to
implementing it, matching their words with concrete deeds to effectively effect intra-regional
trade and development outcomes. The success of AfCFTA will make it the biggest trade
agreement since the formation of the World Trade Organization in 1995, by reducing barriers
to trade, such as removing import duties and non-tariff barriers, the AfCFTA is expected to
boost intra-African trade given its potential of bringing over 1.2 billion people together into
the same market. According to the African Development Bank (AfDB), the AfCFTA “will
stimulate intra-African trade by up to $35 billion per year, creating a 52 per cent increase in
trade by 2022; and a vital $10 billion decrease in imports from outside Africa.”
36
6.0. Prospects and Positive Impacts of the Nigerian Border Closure So Far
A policy, however bad and disastrous to a nation cannot be without its positive impacts or
prospects. This is the case of the border closure policy. Supporters of the policy have given
logical arguments as to why the policy should stand as well as the positive impacts and
prospects which the policy holds for a developing nation like Nigeria.
34
Chidi Odinkalu “Legality of Closure of Nigeria’s Land Border Could Be Tested at ECOWAS Court”
(ECOWAS, October 2019) https://www.prod.courtecowas.org <Accessed 13 February 2020>
35
Supra
36
Jadesola Tai Babatola, “Challenges of the Nigerian Border and Frontier Security” (Research Gate, 2015)
https://www.researchgate.net/publication/313860814_Challenges_of_Nigeria_Borders_and_Frontier_Security
<Accessed 11 February 2020>
14
6.1. The Influx of Sub-Standard Goods in Nigeria
Nigeria lacks the financial and technological capacity to adequately control the movements
around its borders and to sustain an open border system. The National Immigration
Commission and the Nigerian Custom Service has insufficient technology, skilled personnel
and motivation to efficiently check the movement along Nigeria’s border
37
. The effect of the
above is that the gates of the nation are left open to foreigners and indigenous persons to
exploit the free trade agreements to champion their illegal activities such as smuggling of
drugs, contraband products, food stuffs, fuel etc. Prior to the adoption of the closed border
policy in Nigeria, the nation suffered a viral influx of sub-standard goods into its territory.
The western border, alongside Benin Republic is of primary concern with respect to these
activities. Statistics show that agricultural products like rice are mostly smuggled in large
quantities from Benin Republic into Nigeria. The former, with a population of less than 12
million people ranks as one of the major importers of rice in the continent. However, its
consumer capacity cannot support the quantity imported. Thus most of the rice imported from
Asia into Benin Republic is smuggled into Nigeria through the open and unchecked borders
of the nation. The Nigerian Export Processing Zones Authority (NEPZA) in 2018 reported
that N1.45 trillion worth of goods is smuggled into Nigeria annually from Benin Republic
38
.
Progressively, rice remains the most smuggled product in the Nigeria-Benin Republic border
as the Nigeria Customs Services periodically records seizures of illegally obtained bags of
rice within those borders. In mid-2018, the Nigeria Customs Service recorded a total seizure
of 124,407 bags of rice
39
. It is important to note that these smuggled bags of rice were not just
illegal but were also of sub-standard quality. Accordingly, the Nigerian Governors forum, in
2017, lodged complaints with the Federal Government with regards to the quality of rice in
the Nigerian markets
40
. According to them, it was found that these bags of rice were either
rejected in their countries or had overstayed in warehouses before being smuggled into
Nigeria. They implored the Government to take quick and stringent measures to ensure that
this influx of sub-standard bags of rice which were wholly hazardous to health was put to an
37
An Investigation of the Severity, Causes, Impact and Actions Against Counterfeiting and Smuggling in
Nigeria by Omo Aregbenyen. 2019
38
Kingsley Adeniyi, “N1.45trn Goods Smuggled into Nigeria from Benin Republic Annually – Agency”
(Premium Times, November 2019) https://www.premiumtimesng.com/business/business-news/364359-n1-
45trn-goods-smuggled-into-nigeria-from-benin-republic-annually-agency.html <Accessed 10 February 2020>
39
Godwin Oritse, “Rice Remains Atop the List of Items Smuggled into Nigeria” (Vanguard, September 2018)
https://www.google.com/amp/s/www.vanguardngr.com/2018/09/rice-remains-atop-list-of-items-smuggled-into-
nigeria/amp/ <Accessed December 2019>
40
Chinedu Asadu, “The Nigerian Governors Forum (Ngf) On Thursday Raises Alarm Over The “Substandard
Quality Of Rice Consumed By Nigerians”. (The Cable.Ng, 2019)
15
end. Furthermore, the open border system encouraged the importation of products
specifically banned and its use which is criminalized in Nigeria. Products include: used cars,
vegetable oil, beer, clothes and apparels, drugs, canned food, poultry meat and ammunition.
However, a drastic drop in the influx of these sub-standard products has been recorded since
the adoption and implementation of the closed border policy in Nigeria
41
. Billions of naira is
accruing to the Federal Government’s purse from payment of duties, and local poultry
farmers have had cause to rejoice as a result of the increased demand for local birds
42
.
6.2. Unfair Competition in the Nigerian Market
Femi Adekoya in a publication of July 11, 2018 stated categorically that in Nigeria’s case,
unchecked competition, especially from imported goods remains a challenge for the
manufacturing sector
43
. Unfair competition in its general sense means that the competitors
compete on unequal terms, because favourable or disadvantageous conditions are applied to
some competitors but not to others; or that the actions of some competitors actively harm the
position of others with respect to their ability to compete on equal and fair terms
44
. From this
definition, it is evident that these goods smuggled into Nigeria through the land borders, on
which the relevant import duties and tariffs have not been paid, would be sold at a lesser price
rate in comparison to legally imported or locally made products. This disparity in price,
despite the poor quality of the smuggled goods, creates a favourable condition of competition
for same as against the other class of products earlier stated.
Consider this illustration by Phillip Reed
45
in his review of June 27, 2017 as published in
Nerdwallet and USA Today. “It is common knowledge that the cost of purchasing a new car
is twice the cost of purchasing an already used one in most cases. Accordingly, an average
buyer would rather buy a second hand car at a cheaper rate than a new one….”
Furthermore, it is a succinct statement of fact that the Nigerian locals have a perceived
preference for imported rice over the locally produced ones. Therefore, there is implicit in
41
Sanya Adejokun, “Nigeria’s Economy Counts Gain of Border Closure” (Tribune, November 2019)
https://www.google.com/amp/s/tribuneonlineng.com/nigerias-economy-counts-gain-of-border-closure/amp/
<Accessed 10 February 2020>
42
Supra
43
Akinkuolie. R., “Nigeria’s Border Closure: Pros, Cons and Consequences” (Punch Nigeria, 2020)
https://www.google.com/amp/s/punchng.com/nigerias-border-closure-pros-cons-and-consequences/amp
<Accessed 18 February 2020>
44
Supra
45
Philip Reed, “Compare the Costs: Buying New Car Vs. Used”, (USA Today, 2017)
16
the trade conditions unfair and more favourable chances of better sale by the sellers of these
illegally imported low quality goods.
According to the Global Food Security in a review published on March, 2020, prior to the
adoption of the closed border policy in Nigeria, the demand for locally produced rice over
imported rice, on a scale of 10 was on a ratio of 2:8
46
. However, since the adoption of the
policy in 2019, rice production in Nigeria has grown fast, pushed by the rapid growth in the
demand for locally produced rice
47
.
6.3. Improvement in the Nigerian Economy since the Adoption of the Border Closure
Policy
The security and welfare of the Nigerian people is the primary purpose of the government as
evidenced in the provisions of Section 14(2) (b) CFRN 1999. It is solely in the interest of the
fulfilment of this duty owed by the Nigerian government to its citizens, that the land border
of the nation was closed. Within the 6 months of the border closure, the Nigerian
Government has recorded tremendous successes. These successes include an increase in job
opportunities, massive manufacture and sale of domestic commodities, an increase in federal
revenue from legally imported goods, a reasonable reduction in rate of fuel subsidy,
reductions in the rate of smuggled commodities, and a check on the influx of substandard
goods in Nigeria
48
. Specifically, the Central Bank of Nigeria in 2019, noted that more mills;
large or small scale mills have been continually set up by domestic business persons in
Nigeria to fill in the gap created by the border closure
49
. The CBN Governor in a press
release in the same year stated that he has received reports about the growth in demand for
local rice and the purchase of this rice. Statistics show that there has been a 20% decrease in
the rate of fuel subsidy since the implementation of the border closure policy as the illegal
exportation of subsidized fuel in Nigeria is now adequately checked and prevented
50
. The
reports of insurgency and smuggling of weapons, cars, hard drugs and beer has also
46
Sanya Adejokun, “Nigeria’s Economy Counts Gain of Border Closure” (Tribune, November 2019)
https://www.google.com/amp/s/tribuneonlineng.com/nigerias-economy-counts-gain-of-border-closure/amp/
<Accessed 10 February 2020>
47
Supra
48
Akinkuolie. R., “Nigeria’s Border Closure: Pros, Cons and Consequences” (Punch Nigeria, 2020)
https://www.google.com/amp/s/punchng.com/nigerias-border-closure-pros-cons-and-consequences/amp
<Accessed 18 February 2020>
49
Supra
50
Supra
17
drastically reduced to its barest minimum
51
. Accordingly, there is clear evidence of
improvements in the state of the Nigerian economy since the implementation of the border
closure policy.
Arguments against and for the border closure policy are not without reasons, however, no
nation has all known resources – human and material- to itself, therefore countries constantly
need to engage in transnational transactions to make up for lacking resources and as such, a
nation closing its borders calls for a state of economic chaos and gradual antagonism from
other nations. Particularly, this paper proposes that the border closure policy is not the
solution to the problems of smuggling, child trafficking and other maladies against which the
policy was set in place.
The border closure is an implicit admission of the incompetence of immigration if the policy
was, as acclaimed, implemented to curb smuggling. To thwart smuggling, the country should
strengthen the capacity of customs and immigration officers and effectively administer the
nation’s trade policies and legislations. For instance, when it was faced with that hazard,
Hong Kong started profiling all goods, vehicle and private cars crossing the border using
detailed inspections and technology. Apart from this, the country’s yard is very porous: there
are many illegal paths
52
through which smuggled goods are being transported. In simple
terms, there are other ways to curb smuggling and related crimes which are less harmful or
more beneficial to the economy than closing its borders.
7.0 Conclusion
Protectionist policies like border closure generally come with good intentions on the part of
the government to protect local industries and/or to check unfair competition and influx of
substandard goods, as well as protect its citizens. However, it comes with short term benefits
which in the course if time creates economic issues in a state and progressively creates
strained international relationships with other nations. The Nigerian border closure policy is
not the best alternative to curbing border-related maladies the nation is facing; rather
legislations and policies relating to customs and immigrations operations in the nation should
51
Sanya Adejokun, “Nigeria’s Economy Counts Gain of Border Closure” (Tribune, November 2019)
https://www.google.com/amp/s/tribuneonlineng.com/nigerias-economy-counts-gain-of-border-closure/amp/
<Accessed 10 February 2020>
.
52
Stephen. O, “Nigeria Needs a Competent Customs Service not a Border Closure” (Quarz, 2019)
https://www.qz.com/africa <Accessed 18 February 2020>
18
be worked on as well as advance modern technologies in these areas to boost the nation’s
economy as well as protect its citizens from external attacks.
