|The Nigerian President, Muhammadu Buhari has opened the land border at Seme, Illela, Maigatari, and Mfun.
The land borders were closed to goods in August 2019, with partial openings and closings for people prompted by the coronavirus pandemic throughout 2020.
In a recent meeting with the ruling APC party chieftains, President Buhari had promised the border would be opened ‘as soon as possible’. Presidential spokesperson, Garba Shehu said that the ‘message had sunk in’ to neighbouring countries used as a base for smuggling into Nigeria.
“A number of Nigerian business leaders have been complaining about Cotonou’s attitude. They claim their trucks going to Benin are overtaxed at the border. In addition, businessman Aliko Dangote, who bought the Nigerian government’s shares in the Lafarge group, wants to sell his cement in Benin, which Talon is prohibiting.”, says a Beninese businessman with links in Nigeria.
Nigeria closed border against its neighbours almost immediately after it signed the African Continental Free Trade Area agreement (AfCTA).
President Buhari ordered the closures of Nigeria’s borders to prevent smuggling of rice and other products to ensure food sufficiency in August 2019. Since then, food prices have soared, reaching an all time high of 18.3 percent, while inflation in the country of the more than 200 million people rose to a three-year high of 14.9 percent, according to data from the country’s data agency, National Bureau of Statistics (NBS).
“Food inflation is a good example of the outcome of the border closure, considering that 2020 saw 22 states in the country experience flooding, especially the food-producing areas”, says Samuel Segun, an analyst at SMB Intelligence. He also notes the growing insecurity that has led to attacks on farmers. “So, the government choosing to ban the importation of food items under the guise of border closure hasn’t translated into higher production of food by farmers,” said.
While analysts say they do not see the government having “the imagination to take its hands off protectionism completely,” given that the “economic policies we are seeing aren’t so different from what was obtainable in the 80s under Buhari’s previous term.
They noted that the government might ease control on trade with its neighbours in the coming year, partly because its protectionism stance on trade in the past 16 months has failed, and the government just recently ratified the AfCTA it reluctantly signed on July 7, 2020.
Nigeria’s ratified Africa’s historic free trade agreement will come into effect on January 1 2021. The ratification has been hailed as helping the continent of more than a billion people towards becoming the world’s largest free trade area since the World Trade Organization.
There were several forces nudging Nigeria in this direction, and shaping international trade dynamics of Africa’s biggest economy in 2021, according to Ebehi Iyoha, at the Economics Department at Vanderbilt University.
In Iyoha’s estimation, the emergence of Nigeria’s finance minister Dr Ngozi Okonjo-Iweala as the potential director-general of the World Trade Organization (WTO) poses a critical question: “how can a country be hostile to imports if its own citizen heads the largest global organisation committed to free trade?”
While Nigeria’s role in Okonjo-Iweala’s bid for WTO directorship is “quite negligible,” according to SBM’s Segun, the country’s nominee’s landing the position would invite greater scrutiny of the government’s trade policies,” Iyoha said. “What this will mean in practical terms for businesses in the country will depend on whether the Buhari administration cares enough about the country’s reputation to change course,” she added.
Analysts see the opening as helping Nigeria consolidate economic growth on the projection that reopening the borders will reverse the decline of the trade sector, one of the largest employers of labour in the country.