Nigeria and Benin are in a trade dispute two months after signing an agreement to free up the movement of goods and services in Africa.
Nigerian President Muhammadu Buhari ordered the partial closing of its boundary with Benin last month to curb smuggling of rice and other commodities.
The blockade has had a ripple effect across West Africa, with factories and traders struggling to import key raw materials and having to use alternative routes for their exports, according to the Lagos Chamber of Commerce.
The border restrictions come after Nigeria and Benin in July agreed to join the African Continental Free Trade Area, which targets greater economic integration through the removal of trade barriers and tariffs on 90% of commodities.
The duty-free movement of goods is expected to boost trade in the market of 1.2 billion people, similar in size to India, and a combined gross domestic product of $2.5 trillion.
Over 80% of West African cross-border trade is by road, Nigeria is limiting the entry of cargo from its borders with Benin; The cost is quite enormous and the closure is not sustainable and a very bad omen for other Africa countries to keep to the agreement of the Deal on free movement of goods and services among members Nation.
Benin is a key transit route for traders and operates a system that allows landlocked neighboring countries to use its harbors for imports.
The impact of the dispute is being felt as far afield as Ghana, which is separated from Nigeria by Benin and Togo. The restrictions are the latest taken by Nigeria to protect its foreign-currency reserves by curbing imports.
The central bank has restricted access to dollars for the import of more than 40 items from cement to soap, while the government wants Africa’s most populous nation to become self-sufficient in the production of staples such as rice.
Why Did The Government Closed the Borders
Traders and smugglers in Benin have taken advantage of Nigeria’s protectionist policies to import and re-export goods to their bigger neighbor.
Rice is a good example. Benin, with a population of 11 million that is barely 5% of Nigeria’s, is the biggest buyer of the grain from Thailand, the world’s second-largest exporter.
Official shipments from Thailand to Nigeria have dwindled to almost nothing from more than 1.2 million tons in 2014, while those to Benin have increased by more than half. Benin is basically importing for Nigeria.
What The Both Government Are Saying:
Buhari defended the blockade at a meeting in Japan with Beninese President Patrice Talon at the end of last month. He said Benin and its northern neighbor, Niger, should take “strict and comprehensive measures” to curtail smuggling across their borders.
Nigeria is committed to the African free-trade deal, while the agreement “must not only promote free trade, but legal trade of quality made-in-Africa goods,” Buhari said
The government of President Patrice Talon is very concerned about the situation on the Benin-Nigerian borders.
These are the assurances given by his spokesman, Minister Alain Orounla,The Nigerian borders will soon be opened for the happiness of the Beninese people. Discussions are ongoing between President Patrice Talon and his Nigerian counterpart to ensure that everything is back in order, the government spokesman, Minister Alain Orounla, said
We hope soon the borders will be open because alot of businesses are stranded in purchasing of raw materials for their productive activities and business dealings and most of them come from Nigeria .
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