The Value News

Border Closure: How Nigeria Loses Billions Of Naira To Benin Republic , Niger And Cameroon induced Informal Trade

By Elizabeth Chukwuma

For years, Nigeria has been losing billions of naira to Republic of Benin, Niger and the Central African country of Cameroon  in informal trade . This is because of the activities of Clandestine smugglers  who were provided safe passage  to carry out their nefarious activities of  smuggling prohibited  items such as foreign par boiled rice ,used  clothing, second hand clothing and foreign processed vegetable oil into the country.

Going by the  country fiscal policy , these items are not allowed to be imported into the country. President Muhammadu  Buhari of the  ruling All Progressive Congress had  come  clearly on January  1, 2017, to ban the importation of foreign par boiled rice  and second hand vehicles into the country  through the land border. 

The Katsina born Nigerian President  had expected Presidents   Patrick Talon, Muhammad Issofou, and Paul Biya  of Republic  of Benin, Niger and the Central African  Republic of Cameroon  whose countries have liberal economic policies that allows these  foreign goods to be  imported into their to adequately  police its distribution to dealers  avoid being  smuggled into the  Nigerian market.

Hameed Ali: Customs Comptroller General

It was learnt  that  the Katsina state born Nigeria Nigerian President  was said to have spoken to them  individually to montor the activities of smugglers who use their countries  s base to smuggled offensive  goods, particular, the Asian country  foreign produced par boiled rice  into the country through the porous borders. 

It is instructive to note that the smuggling activities  are carried in  border Communities in the in the 21 local government areas spread in  Ogun, Oyo, Osun, Ekiti, Lagos, Cross River, Akwa-Ibom, Sokoto, Kebi, Zamfara, Katsina, Adamawa, Borno  and Yobe states.  Customs anti-smuggling officers  may not have done  much in the past to contain the activities of the cross –border smugglers messing up the country’s economy because of the difficult terrain. This is the situation in Chikanda, a  Community in Baruten local area of Kwara state, thus making it a haven for  cross border smugglers  who understands the terrain to carry out their nefarious activities unrestrained.

 Talon and his counterparts may have refused to Cooperate with the Nigerian government to  bring the  activities of the Cross-border smugglers under control and save the nation’s economy because  the huge revenue  their governments were making from the informal trade.

The recent  closure of the borders with the three neighboring countries: Benin, Niger and Cameroon ,  to stop the  informal trade may have exposed the countries  as being a curse to Nigeria  rather than  a blessing because of the billions of naira which could have   earned by Nigeria  as revenue  with proper documentation but  lost to the countries to service their economy.

Signs that  Nigeria has been losing billions of naira to these neighbouring countries began to manifest  when Customs yearly revenue rose  astronomically to  a trillion naira   bracket in 2017, because of the Customs  tight policing of the  cargoes coming  into the country from the seaports, airports  and land border areas.

 Note that 41 items have been removed  from accessing the official  foreign exchange  market to ensure they were not imported into the country. The policy was later extended to the importation of foreign par boiled rice and textiles into the country. Buhari may have made bold a Statement by closing the nation’s borders with these three African  neighbouring  countries last August  to prove a  point.

 The closure of the land borders appear  to have made it difficult for these smugglers to carry out their nefarious activities as usual across the country. This may have forced the  importers  who patronise  Cotonou Terminal and Bollore port in Benin Republic to take delivery of their cargoes which were  smuggled into the Nigerian market  through  unapproved routes to relocate to the  Nigeria ports to  do their business.

Those who have remained unrepentant would not forget their experience  in the renewed anti-smuggling war  in the last one year.  TThe service was said to have seized 30,906 assorted items   with  a Duty Paid Value of  N62 .23 billion.  Going by Customs records the seizures include  arms, ammunitions,  illicit drugs , used clothing, Vegetable Oil, frozen poultry products  and foreign rice among others.

Importers who may have read their hand writing on the wall that  there is no end in sight  to the border closer may have realised  quickly the need to relocate to Nigerian ports to take delivery of their cargoes. APM Terminal  and other Terminal operators  could attest to the fact  that there have been  an increase in cargo throughput  at the ports  which reflected on the revenue collection of the Nigerian Customs Service, NCS. This may have informed why the revenue generation of the service shot up significantly in 2019.

A Statement by Joseph Attah, a Deputy Comptroller and Customs Spokesperson    shows  that  before the  commencement  of the Border Drills  in the  four geo-political regions: south west, south east, north central and  north west  last August, the Service  daily  revenue generation was between N4 billion  and 5 billion but has risen to N7 billion in the recent time.

The fallout was that    the service  generated N1.34 trillion  in the 2019 trading year. According to Attah, the amount   generated  by the  revenue generating agency    was   about  N969. 831 billion over the 2019  set target  and N139.24 billion   over the sum of N1.202, generated by the service in 2018, showing that these neighbouring  countries have been feeding fat from Nigeria..

An elated Hameed Ali , a retired Army Colonel and Comptroller General who  had attributed the improved  revenue collection  in 2019 fiscal year  to’’ resolute pursuit  of what is right,  rather  than being populist   by  Compromising national interest on the altar of individual  or group interests’’ is optimistic that the service  revenue generation this 2020 would be much better.

He noted that  the’’ strategic  deployment  of officers   strictly using the standard operating  procedure,  strict enforcement  of extant  guidelines  by the Tariff and Trade Department and automation  of the Customs process  which had eliminated  the vices associated  with the manual  process of clearing cargoes at the port played a key in the enhanced revenue generation of the  service over the last four years.

The Customs Comptroller General  further attributed the improved revenue collection during the period under review  to the sensitization  carried out by the service  to ensure that importers with their agents do the right thing. He disclosed that  this has resulted to the  more informed and voluntary Compliance  by importers with their agents  in their declarations  at the port.  

Given an insider information on the  government decision  to close the borders with the three  neighbouring  African countries which are already feeling the  economic pain, Ali, the Customs Comptroller General, said  disclosed that  ‘’it was a decisive action taken  against the challenging issue   of trans-border crime  and Criminalities , fueled by non-  compliance to the Economic Community of West African States, ECOWAS,   Protocol  on Ttansit cargoes  by the countries.

  A source who spoke to The Value News at the Federal ministry of Finance, Budget and Economic Planning disclosed that with the acquisition of Rice Milling machines, by Millers  to destine  locally produced rice, the  President may not be  in a hurry to reopen the  closed Borders cross the country  with the  neighboring  countries

. But Ali, the Customs  boss, may have gladdened the heart of Nigerians  when he said that all hopes are not yet lost. He was said to have told those that cares to listen  that  there are hopes of  reopening the borders going by  the  ongoing discussions  between the government and the countries at the center of the crisis.

He is optimistic that the discussion  would yield permanent solution  to the challenges of  border security with the countries. The Customs helmsman, has repeatedly said that  that the service is ever ready  to’’ strictly implement  the outcome  of the ongoing Diplomatic  engagements’’ . this good news to Nigerians who are looking  forward to the day the borders would be opened for free movement of goods and services within the  Wet African sub-region.

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