{"id":408,"date":"2019-11-02T18:14:08","date_gmt":"2019-11-02T18:14:08","guid":{"rendered":"http:\/\/watchdogplusmedia.com\/?p=408"},"modified":"2019-11-02T18:17:37","modified_gmt":"2019-11-02T18:17:37","slug":"speaking-on-the-recent-border-closure","status":"publish","type":"post","link":"https:\/\/watchdogplusmedia.com\/?p=408","title":{"rendered":"SPEAKING ABOUT THE RECENT BORDER CLOSURE"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Nigeria recently partially closed its border with Benin in an\neffort to stem the smuggling of rice. It then went on\nto close its land borders<\/a> to the movement of all goods from Benin,\nNiger and Cameroon, effectively banning trade flows with its neighbours.<\/p>\n\n\n\n

Border\nclosures are not new in Africa<\/a>. But Nigeria\u2019s actions\nraise important concerns about the seriousness and prospects of regional\nintegration in Africa.<\/p>\n\n\n\n

Nigeria acted just three months after it had signed the African\nContinental Free Trade Agreement. With 55 member countries, a combined GDP of\n$2.4 trillion and a total population of 1.2 billion, the agreement will create\nthe world\u2019s largest free trade area. Its aim is to promote intra-Africa trade,\nwhich is abysmally low at 16%<\/a>.<\/p>\n\n\n\n

To restrict trade flows so shortly after this momentous feat is\na major blow to integration efforts. It also shows how unprepared African\ncountries might be for free trade. It\u2019s hard to see how the free trade deal can\nincrease intra-Africa trade to 60% by 2022, as projected<\/a> ,\nwhen it is being undermined from the start.<\/p>\n\n\n\n

These early trade tensions between Nigeria and its neighbours\nare hardly surprising. They underlie some of the fundamental problems that must\nbe addressed before cordial free trade can succeed on the continent.<\/p>\n\n\n\n

In the case of Nigeria, Africa accounts<\/a> for\nonly 13% of its exports and 4% of its imports. These statistics probably\nunderestimate the true volume of trade between Nigeria and its neighbours. But\nthey show that Africa is a dispensable market.<\/p>\n\n\n\n

Border closure<\/strong><\/p>\n\n\n\n

Nigeria\u2019s economy declined in 2015 and further contracted<\/a> by\n1.6% in 2016 . This was largely due to a worldwide drop in the price of crude\noil in 2014<\/a>. The\ncountry has since fallen on hard times. Foreign direct investment inflows have\nplunged by 55%<\/a> .\nThere have also been shortages of foreign exchange which have put the Naira<\/a> in\na tailspin, causing the government to implement stringent foreign exchange\ncontrols.<\/p>\n\n\n\n

Crude oil accounts for over 95% <\/a>of\nNigeria\u2019s total exports and 90%<\/a> of\nits foreign exchange earnings. This shows that Nigeria has neglected other\nsectors of the economy.<\/p>\n\n\n\n

The recent oil crisis highlighted the need for the country to\ndiversify and restructure its economy. The result was increased attention being\naccorded the agriculture sector, which had declined significantly since the\nlate 1960s.<\/p>\n\n\n\n

Nigeria\u2019s 2017 Economic\nRecovery and Growth Plan<\/a> aimed to deepen investments in\nagriculture and increase the sector\u2019s contribution to economic growth from 5%\nin 2017 to 8.4% by 2020. The idea is to revive domestic farming and save on\nfood imports (over $22 billion a year).<\/p>\n\n\n\n

It is this national plan that precipitated the border closure.\nThe government wants to protect domestic farmers from cheap imported foodstuff.<\/p>\n\n\n\n

While Nigerian rice farmers are happy about their government\u2019s\nactions, there are concerns about whether domestic food production can meet\ndomestic demand. In 2017, demand for rice in Nigeria reached 6.7\nmillion tons<\/a>, almost double the 3.7 million tons produced domestically.<\/p>\n\n\n\n

Since the border closure, the price of a 50 kilogram bag of rice\nhas increased<\/a> from\n9,000 naira ($24) to 22,000 naira ($61).<\/p>\n\n\n\n

This is good for the farmers. But it is hurting consumers.<\/p>\n\n\n\n

Oil exports and fuel\nimports<\/strong><\/p>\n\n\n\n

Then there is the bigger problem of government-subsidised\npetroleum being smuggled out of Nigeria and sold in neighbouring countries.<\/p>\n\n\n\n

World Bank data<\/a> show\nthat between 2010 and 2016, the average pump price of petrol was $0.52 per\nlitre in Nigeria, $1.01 in Benin, $1.14 in Cameroun and 1.04 in Niger. Current\ndata<\/a> show that petrol is sold at $0.40 per litre in Nigeria and\nat $0.91 and $1.07 in Benin and Cameroon respectively.<\/p>\n\n\n\n

The price difference creates the incentive to smuggle petrol out\nof Nigeria.
\nNigeria\u2019s largest export is crude oil, and its largest import is refined oil.\nDomestic refineries are reportedly operating well below their capacity, causing\nfuel imports to average 29%<\/a> of\ntotal imports over the past three years. Roughly 90% of fuel in Nigeria is\nimported, and all of it is subsidised. Last year, the subsidy bill was\nestimated to reach $3.85 billion<\/a>.<\/p>\n\n\n\n

Smuggling fuel out amounts to the use of public resources to\nsubsidise neighbouring countries. Since the border closure, reports suggest\nthat the delivery of fuel in Nigeria has dropped by 20%<\/a> and\nsales by 12.7%<\/a>.<\/p>\n\n\n\n

This suggests that the demand for fuel in Nigeria is high\nbecause some of it is bought and smuggled out.<\/p>\n\n\n\n

Why the border closure is\nworrying<\/strong><\/p>\n\n\n\n

African countries have different economic configurations and\nstrategic priorities. The huge number of diverse countries within the free\ntrade area isn\u2019t going to make things easy.<\/p>\n\n\n\n

Indeed, free trade has its benefits, but it also has costs.\nNigeria\u2019s bid to protect a declining rice farming industry and save foreign\nexchange has led to protectionism that defies the principles of a free trade\narea.<\/p>\n\n\n\n

The African Union (AU) has been muted on the issue of the border\nclosures. This might be because it does not yet have detailed institutional\narrangements for settling disputes within the free trade area.<\/p>\n\n\n\n

Another factor might be that it has been quiet because Nigeria\nis involved. As Africa\u2019s largest economy, the AU courted it earnestly to sign.\nThe agreement needs Nigeria, arguably at whatever cost.<\/p>\n\n\n\n

The regional trade bloc ECOWAS has also failed to bring Nigeria\nto heel. Both Nigeria and Benin are members of the bloc<\/a>,\ncreated in 1975. All it has done so far is to appeal<\/a> for\nthe borders to be opened. It clearly has no enforcement power.<\/p>\n\n\n\n

Nigeria\u2019s border closure may be a precursor. More incidents like\nthis can be expected as the realities of free trade kick in. Some countries\nwill lose, others will gain.<\/p>\n\n\n\n

The AU needs protocols and measures to manage free trade, as\nwell as programmes to prepare political leaders for the realities that will\nfollow.<\/p>\n\n\n\n

The free trade area should not be a mere symbol. It must be\nfully understood and appreciated for it to succeed.<\/p>\n\n\n\n

The Nigeria border closure must be resolved as soon as possible.\nIt is diverting attention and positive energy from matters that can promote the\nfree trade area, such as investments in transport infrastructure, trade data\ncapture and border protection.<\/p>\n\n\n\n

More importantly, it is a bad precedent that could reduce other\ncountries\u2019 commitments to economic integration in Africa. The AU must act now,\nor prepare to bury the free trade deal.<\/p>\n","protected":false},"excerpt":{"rendered":"

Nigeria recently partially closed its border with Benin in an effort to stem the smuggling of rice. It then went on to close its land borders to the movement of all goods from Benin, Niger and Cameroon, effectively banning trade flows with its neighbours. Border closures are not new in Africa. But Nigeria\u2019s actions raise important concerns […]<\/p>\n","protected":false},"author":2,"featured_media":418,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_mi_skip_tracking":false},"categories":[14],"tags":[],"yoast_head":"\nSPEAKING ABOUT THE RECENT BORDER CLOSURE » WatchDog Plus Media<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/watchdogplusmedia.com\/?p=408\" \/>\n<meta name=\"author\" content=\"Odofin\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/watchdogplusmedia.com\/?p=408#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/watchdogplusmedia.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"News\",\"item\":\"https:\/\/watchdogplusmedia.com\/?cat=14\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"SPEAKING ABOUT THE RECENT BORDER CLOSURE\"}]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"SPEAKING ABOUT THE RECENT BORDER CLOSURE » WatchDog Plus Media","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/watchdogplusmedia.com\/?p=408","author":"Odofin","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"BreadcrumbList","@id":"https:\/\/watchdogplusmedia.com\/?p=408#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/watchdogplusmedia.com\/"},{"@type":"ListItem","position":2,"name":"News","item":"https:\/\/watchdogplusmedia.com\/?cat=14"},{"@type":"ListItem","position":3,"name":"SPEAKING ABOUT THE RECENT BORDER CLOSURE"}]}]}},"rttpg_featured_image_url":{"full":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",1431,949,false],"landscape":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",1431,949,false],"portraits":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",1431,949,false],"thumbnail":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-150x150.jpg",150,150,true],"medium":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-300x199.jpg",300,199,true],"large":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-1024x679.jpg",640,424,true],"1536x1536":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",1431,949,false],"2048x2048":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",1431,949,false],"madd-magazine-blog-post":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",730,485,false],"wpsso-schema-1x1":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4.jpg",1431,949,false],"wpsso-schema-4x3":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-1200x900-cropped.jpg",1200,900,true],"wpsso-schema-16x9":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-1200x675-cropped.jpg",1200,675,true],"wpsso-thumbnail":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-1200x628-cropped.jpg",1200,628,true],"wpsso-opengraph":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-1200x628-cropped.jpg",1200,628,true],"wpsso-tc-summary":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-600x315.jpg",600,315,true],"wpsso-tc-lrgimg":["https:\/\/watchdogplusmedia.com\/wp-content\/uploads\/2019\/11\/A-4-1200x628-cropped.jpg",1200,628,true]},"rttpg_author":{"display_name":"Odofin","author_link":"https:\/\/watchdogplusmedia.com\/?author=2"},"rttpg_comment":1,"rttpg_category":"<a href=\"https:\/\/watchdogplusmedia.com\/?cat=14\" rel=\"category\">News<\/a>","rttpg_excerpt":"Nigeria recently partially closed its border with Benin in an effort to stem the smuggling of rice. It then went on to close its land borders to the movement of all goods from Benin, Niger and Cameroon, effectively banning trade flows with its neighbours. Border closures are not new in Africa. But Nigeria\u2019s actions raise important concerns…","_links":{"self":[{"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=\/wp\/v2\/posts\/408"}],"collection":[{"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=408"}],"version-history":[{"count":-3,"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=\/wp\/v2\/posts\/408\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=\/wp\/v2\/media\/418"}],"wp:attachment":[{"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/watchdogplusmedia.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}