NANTS Call For Reopening of Land Borders, Compensation For Impounded Goods
The National Association of Nigerian Traders has called on the Federal Government to reopening the country’s land borders.
The Association also urged FG to compensate genuine traders whose goods were trapped at various at various land borders as a result of the closure as well as document the costs and benefits of the border closure and lessons learnt in the exercise of the border management.
These recommendations and more were made available in a communiqué presented at the end of the Webinar meeting on the theme Challenges, Implications and Matters arising from the Nigeria border Closure, and Dynamics of COVID-19 on Nigeria’s Trade Competitiveness, hosted by NANTS and GIZ SEDIN (NICOP).
Full report of the communiqué is published below:
NANTS Head Office Official Report/Communique Web/BC/10/09/20
REPORT OF THE WEBINAR MEETING ON THE CHALLENGES, IMPLICATIONS AND MATTERS ARISING FROM THE NIGERIA BORDER CLOSURE AND DYNAMICS OF COVID-19 ON NIGERIA’S TRADE COMPETITIVENESS
- Hosted by NANTS and GIZ SEDIN (NICOP) 10th September 2020) –
Prior to the Covid-19 pandemic, and precisely on 20th August 2019, the Government of Nigeria closed the country’s land borders. Since then, several meetings, emissaries and interventions had taken place on the subject matter especially at the ECOWAS level, but the borders remain closed until this date.
Nigerians appear to be divided in their opinion regarding the status of the border closure. On the one hand, there is a school of thought that believes that the border should remain closed so as to checkmate the influx of fake and sub-standard goods into Nigeria and to ensure that farmers breathe enough for the sustenance of their livelihoods as well as self-sufficiency especially with regard to the production and consumption of local food items.
On the other hand, there is another school which believes that the prolonged closure of the border has serious implications on importation of raw materials for the manufacturing sector as well as for competitiveness and exports to galvanize revenue necessary for the revival and stability of the domestic economy, especially in view of the financial strain and revenue depletion caused by Covid-19 on the nation’s resources.
On the Government side, it is noteworthy that Nigeria has complaint severally concerning the poor compliance with the implementation of the ECOWAS Trade Liberalization Scheme (ETLS) and other regional trade related Protocols such as the Inter-State Transit Protocol by her neighbours which has no doubt resulted in massive smuggling, drug peddling, proliferation of small arms and light weapons (which has exacerbated Nigeria’s insecurity challenge), etc as its reasons for the border closure.
Nonetheless, the entire situation appears to have left no winner in the process and outcome. From all shades of opinion, the truth remains that goods belonging to traders and other SMEs, including perishable items and processed commodities with expiry dates are stranded at the nation’s borders for several months, indeed over a year. To worsen the matter, the Covid-19 and its induced lock down policy had rather contributed in further sealing the borders, with huge loss on intra-regional trade and economic development.
In the light of the above, the National Association of Nigerian Traders (NANTS) with the support of GIZ (under the Nigeria Competitiveness Project (NICOP) which is co-financed by the European Union (EU) and the German Government; and implemented by GIZ SEDIN Programme with the Federal Ministry of Industry, Trade and Investment (FMITI) as partner, organized virtual consultative meeting.
B. Goal and Objectives
The aims of the webinar are:
- To bring together the private sector, relevant civil society organizations as well as key public sector actors related to trade and competitiveness (particularly, the trade and border enforcement agencies) and trade policy makers with a view to examining the challenges, consequences, impact and matters arising from the border closure.
- To examine the costs and benefits of the border closure, the identifiable legal gaps and future possible approaches and alternatives
- To recommend actions for improving decisions on domestic and regional competitiveness and trade infrastructure.
was attended by various shades of stakeholders (public and private sector) as well as Non-State Actors, and the media.
D. Opening Session, Presentations and Highlights
The Webinar commenced with a Welcome address from NANTS President (Dr. Ken UKAOHA) who made introductory remarks with clarity on the rationale for the meeting as well as a balanced chronicle of events that preceded the closure of the border, including the shades of opinion from different actors and school of thoughts on the subject matter.
The leader of NICOP – Marcus Wauschkuhn also made brief comments on the reasons for collaboration with NANTS, while the representative of the European Delegation to Nigeria delivered a brief remark on the essence and benefits of regional integration and the justification for appropriate implementation of rules to secure the benefits.
Declaring the event open, the Director of Trade at the Federal Ministry of Industry, Trade and Investment (FMITI) Alhaji Abubakar Aliyu noted that Nigeria undertook due diligence and relied on all extant laws in shutting the borders in order to protect lives of her citizens and safeguard the nation’s territorial integrity against infestation of all forms of arms, light weapons and drugs that were largely at the root of terrorism bedevilling the country in recent time. He however noted that considerations are ongoing towards the next line of action that may lead to the reopening of the partially closed land borders, taking into account the menace caused by Covid-19 and the need to be cautious to avoid further spread and escalation.
The Webinar benefited from a summary of objectives outlined by the Facilitator Legborsi Nwiabu Esq., Prof. Jonathan Aremu (keynote speaker) presentation, a second opinion remarks from an analyst, contributions from various representatives of key private and public sector organizations in Nigeria as well as interventions from participants. All these contributors x-rayed the process of ECOWAS regional integration and the laws, examined whether Nigeria’s action in closing the border was unilateral and negated recourse to ECOWAS as a Supranational entity, and whether there is any lesson from or linkage between the border closure and the continental process towards African Continental Free Trade Agreement (AfCFTA),
The presentations also noted and appraised Nigeria’s insistence on ensuring that (i) her economy is not be overrun by negative attitudes from other Member States as a result of a free trade agreement entered in ECOWAS economic integration, (ii) goods coming to Nigeria must come through the sea port or by air for effective checks through electronic scanners, and (iii) imports coming into the country through land borders must retain their original pack with no modification whatsoever, while goods predominantly produced in ECOWAS Member States would be treated under the coverage of the ETLS Rules of Origin.
E. General Observations
Arising from the presentations and discussions, the following observations were made:
- Culpability of All Parties to the ECOWAS Integration Process: All parties in the integration process have their blames to share on the unfortunate closure of the border which was avoidable. While Nigeria may have fallen short of following due process and acted unilaterally by not informing ECOWAS, the failure of her neighbouring Member States (Benin Republic and Niger Republic) to comply with effective implementation of ECOWAS trade laws (e.g. Inter-State Transit Protocol as well as the Rice Offensive Strategy) perhaps became the justification for Nigerians reaction, resulting in the closure of the border. ECOWAS on her part appear to have remained handicapped, docile or passive in enforcing her rules.
- There is a Nexus between Insecurity, Economic Woes and the Border Closure: Considering the prevalent insecurity in Nigeria, and the fact that trafficking in small arms and light weapons, drug peddling, drug abuse among youths and other illicit activities linked with cross border transactions have been severally pointed as drivers of terrorism, banditry, kidnapping and other forms of criminality in the country; and considering further that excessive smuggling of prohibited, fake and sub-standard items into the country through Nigeria’s neighbouring Countries are largely responsible for the poor competitiveness of Nigeria’s MSMEs; it is apparent that these may have necessitated the closure of the border.
- Benin Republic as a Conduit for Smuggling to Nigeria: The economy of Benin Republic has been heavily reliant on the informal re-export and transit trade with Nigeria, which accounts for about 20 per cent of its GDP, while about 80 per cent of imports into Benin are destined for Nigeria. Smugglers have been taking advantage of the fact that it is cheaper to import rice, for instance, through neighboring countries into Nigeria. In addition, Benin has always been a major corridor for second-hand cars of many years (some more than 20 years old), while there has also been a ban on importing cars that are more than 15 years old into Nigeria (According to the World Bank (2020).
- Reflections on some Gains of the Border Closure: There are claims from the Nigerian Custom Services that the Service is generating more revenue from the seaports as a result of the closure, and that there has been a significant drop of eight million liters in fuel consumption, evidence of immense smuggling of petroleum products aided by Nigerian security personnel. More so, the entries of rice, cars, second hand clothes and chicken products with so many other goods and services that originate from neighboring Countries have also reduced drastically.
- Failure of past Efforts by Nigeria: Prior to the border closure, Nigeria had held many bilateral meetings with her neighbouring ECOWAS Member States on the need for effective implementation and enforcement of border security management, and these resulted in Memoranda of Understanding. In addition, Nigeria had extended hands of fellowship in terms of capacity building and the donation of patrol vehicles to these two countries; unfortunately, MOUs were rather obeyed in breach.
- Regional Impact of the Border Closure on Trade: The border closure has negatively affected trade across the sub-region as the once bustling borders have come to a standstill, with goods rotting at borders and queues of Trucks and Lorries waiting at checkpoints in the hope of re-opening soon. The border closure experience and the causative factors provide very clear lessons to be learnt for future handling of the AfCFTA in terms of implementation.
- Practices of Unscrupulous Border Officials: The unabated smuggling activities that resulted in the border closure must also be examined within the context of corrupt practices and poor professionalism among unscrupulous border officials, many of who connive with smugglers, racketeers and other criminal elements who are bent on their economic sabotage journey against the Country. Indeed, although official border posts are shutdown, movements of goods and services through illegal routes created by smugglers in collaboration with some of these security operatives still persist.
- The Awakened Consciousness of ECOWAS: The border closure must also be seen from the positive side of awakening ECOWAS to consciousness of ensuring the effective implementation and defence of her rules. For instance, the border closure has become a wakeup call for (i) the strict implementation of the ISRT, (ii) the activation of SIGMA technology as a tool for the various Customs Administrations in ECOWAS to interface, and (iii) a reminder to the almost moribund Rice Offensive Strategy of ECOWAS and the AU-CAADP.
- The Roadmap to re-opening of the Border: After the border closure, various bilateral negotiations, meetings and other actions had taken place under the supervision of ECOWAS resulting in the identification of a 15-points road map, and that 13 out of the 15 points have also been implemented and complied with by the neighbouring countries before the advent of COVID-19.
- Frustrating Impact of Border Closure on the Livelihoods of Businesses: Regrettably, a major chunk of the goods trapped at the border’s courtesy of the closure since 20th August 2019 are agro-commodities and some of which are perishable items or products with expiry dates. In addition, some of the owners of such legitimate commodities may have invested their hard-earned resources or even borrowed from financial institutions and would therefore presently be facing serious challenges of loan repayment and livelihoods sustainability.
- Compensation Mechanism: The socio-economic situation of the affected business actors is worsened by the fact that Government is not yet considering the provision of any available means of compensation as a palliative mechanism especially given that a major chunk of the concerned investments may not have had any insurance coverage thereby leaving both businesses, actors and the entire economy in deeper sorrowful and deplorable situation. The COVID-19 pandemic has further frustrated the entire situation, especially given the income and revenue shortfall induced by the pandemic.
F. Outcomes and Recommendations
Having deliberated extensively during the sessions on the above considerations and issues highlighted, participants proffered the following recommendations:
- The Need for Clarity and Application of National Strategic Interest: The Federal Government of Nigeria should always lay out her National Interests and strategic objectives and pursue same in a way that ensure compliance with international commitments and obligations so as not to query or cast aspersions on the nation’s integrity. For example, rather than go for absolute closure of border, Nigeria could have applied the provisions of Article 41(3) of the Revised ECOWAS Treaty (1993), which allows a Member State to impose quantitative restrictions (QR) on the basis of application of security laws and regulations, the control of arms, ammunition and other war equipment and military items; the protection of human, animal or plant health or life, or the protection of public morality, the control of narcotics, hazardous and toxic wastes, nuclear materials, radioactive products or any other material used in the development or exploitation of nuclear energy, etc.
- Brevity and Assertiveness in providing Leadership for ECOWAS: Nigeria must be cautious and circumspect in signing up to international agreements (including regional rules or regimes). More so, within the region, Nigeria needs to adopt a strategic approach to the use of her position in an assertive manner and by so doing provide the needed leadership within ECOWAS. In this regard, political leaders must be properly orientated on the tenets of economic diplomacy and the implications of the various international and regional regimes to which Nigeria belongs, as well as the application of existing “safeguards” and “exceptions” in international/regional instruments to justify national policies when necessary, but not as an afterthought as is the case of Ghana’s treatment of Nigerian Traders and the Benin/Niger (tacit condoning of smuggling); etc.
- Re-open the Land Borders: The Federal Government should consider immediate reopening of the land borders considering that:
- Nigeria had succeeded in making radical statement, warning short with the closure of the border.
- Nigeria has activated the implementation of ECOWAS moribund laws such as the Interstate Road Transit Protocol (ISRT).
- The neighbouring countries in question have started showing compliance with ECOWAS standing in as both observer and arbiter over the subject matter.
- Transparent Identification and Documentation of Stranded Goods and their Owners: Government should consider setting up an Inter-ministerial Committee composed of Public and Private sector to inspect the stranded goods at the borders with a view to taking accurate documentations, identifying and ascertaining ownership for transparency and recommending actions towards effective handover to their legitimate owners.
- Compensation for Genuine Traders: The above Committee should consider and recommend any available means of compensation for genuine traders (importers and exporters) whose goods have been trapped at various borders courtesy of the closure. These recommendations are made with a view to ensuring that genuine traders are not sanctioned or punished alongside smugglers and other criminal actors who evade duty/tariff payments.
- Documentation of Costs and Benefits of the Border Closure: Government of Nigeria should come up with a full documentation of costs and benefits of border closure and lessons learnt in the exercise of border management and enforcement of corridor rules for future reference purpose and as a guide for future decision and policy making in this regard.
- Holding ECOWAS Accountable: The Federal Government of Nigeria must seek ways of securing commitments from ECOWAS on the strict implementation of Community laws, particularly with regards to the ETLS, CET and other trade and economic related Protocols and policies that would fast track regional integration.
Participants commended NANTS and GIZ for their collaborative efforts at convening the Webinar and presenting the subject to public discuss with a view to finding lasting solution. As a follow up, NANTS was advised to present the report of the meeting in an official Memo to relevant Ministries, Departments and Agencies of Government, including ECOWAS Commission and the Governments of Benin and Niger for necessary action.
Barr. John-Bede Ofoha
Nigeria Competitiveness Project (NICOP) is co-financed by the European Union (EU) and the German Government; and implemented by GIZ SEDIN Programme with the Federal Ministry of Industry, Trade and Investment (FMITI) as partner.
National Association of Nigerian Traders – NANTS
Tel: +234 803 3002 001, +234 9 7812124.