AfCFTA: How Continued Border Closure May Deprive Nigeria Of Opportunities -By Isaac Asabor

It is no more news that the federal government has for 15 months now, precisely since August 2019, shut Nigeria’s land borders to the detriment of countries that are affiliated to the Economic Community of West African States (ECOWAS). Against the foregoing backdrop, it would be recalled that Sabo Nanono, Nigeria’s minister of agriculture, two weeks ago warned that the borders would remain closed as the government has no plans to open them.

At this point in time, it is germane to remind the minister that Nigeria, apart from being a signatory to ECOWAS Treaty, is also a signatory to the Africa Continental Free Trade Agreement (AfCFTA) which will become operational in January 2021. The agreement, like the one governing ECOWAS, requires members to open their borders to the free flow of goods and personnel. No one knows how Africa’s largest economy would remain in AfCFTA with closed borders.

The African Continental Free Trade Area (AfCFTA), no doubt, when committedly followed by Nigeria as a member will open doors of opportunities for Nigerian producers and industrialists, but will present challenges for those who refuse to recognize the new world. After all, the ultimate goal of AfCFTA is to create a single free trade area covering the whole continent and with that huge single market allowing African businesses, industrialists, service providers to expand and grow.

Analyzed from the foregoing perspective, it is expedient to ask, “What does Nigerian stands to gain if its borders to neighbor African countries remained closed?” Nanono and his cohorts or rather advisers should not forget that AfCFTA will unarguably serve as an opportunity for Nigerian business. This is as the market it will engender will from January 2021 continue to be beneficial for any businessman that can produce high-quality products at a good price. Against the foregoing backdrop, there is no denying the fact that such businessman will be able to increase sales, find new customers and expand, and consequently open doors for job seekers.

Be that as it may, there is no denying the fact that the challenge at the moment is that if the borders are not opened before the set date that Nigeria may lose out, and that the closure of the border makes other members to perceive her with mutual distrust. It suffices to say that if not well managed that other members may in their own rights engender similar hindrances that may thwart the objectives which AfCFTA was set to achieve.

It would be recalled in this context that the foregoing sentiment was equally alluded to by Mr. Increase Uche, President, National Association of Government Approved Freight Forwarders (NAGAFF), who described the policy as ill-timed and of great danger to Foreign Direct Investment (FDI). He said while Buhari’s security advisers might have genuine concerns, the “unfortunate” decision is coming at a time Nigeria had just signed the AfCTA agreement. According to him, the measure would make investors view the nation as “unserious” and as a place where a stable environment is not guaranteed.

In a similar vein, the foregoing view has being concurred by the Manufacturers Association of Nigeria (MAN) as it recently posited that with less than 30 days to the January 1, 2021 date for the implementation of the AfCFTA, that the Federal Government should review its stance on the closures, saying that the trade protocol is premised on liberalization of intra-regional trade in the continent.

The leadership of the association in the same parley added that the closure of the borders has created rancor between Nigerian and its neighbors, especially Ghana, while its economic impact has been severe for Nigerians that depend on imported food to address the shortfalls in local production, as well as manufacturers that exploit the West African markets for expansion.

Be that as it may, the federal government should not forget that the earlier the borders are opened the better as the protection for home industries will be decreasing as trade barriers fall, so producers of over-priced and inferior quality products are going to come very short. This is as someone else on the continent will have a better product at a cheaper price and will take the markets. It is also expedient to note in this context that a correctly-priced local currency with stable exchange rates means our manufacturers can be competitive.

If I may ask, just like some Nigerians are equally asking, what benefits have being added to Nigeria’s economy since the border was closed for close to 15 months? It is not an exaggeration to say that the closure is counterproductive as millions of Nigerians have being impoverished as they toiled to eke out a living below poverty line. It suffices to say that they are already paying a rather lop-sided price for the border closure. Thousands from within and outside Nigeria who were doing legitimate businesses on both sides of the borders have lost their means of livelihood for more than 15 months now.

It is not an exaggeration to say that since Nigeria closed its land borders, saying that it wants to reduce the smuggling of goods and stop illegal inflows of Asian rice and outflows of subsidized fuel that the move has done more harm than good. More fundamentally, Nigerian authorities justify the closure by the need to support the domestic agricultural sector and accelerate national productivity growth.

Despite the closure of the borders, even as the Christmas season beckons, items, mainly foreign parboiled rice, tomato paste, frozen chicken and cars, are paradoxically been smuggled into the country in large scale, closure of Nigerian borders notwithstanding.

It would be recalled that not few Nigerian manufacturers have lost their export market in ECOWAS. Manufacturers’ unplanned inventory (stock of unsold goods) surged by close to 30 per cent in the second quarter of 2020 immediately after the borders were closed. Food inflation has climbed above 16 per cent as Nigeria toils to compensate for the huge supply deficit emanating from border closure.

To this end, it is expedient to urge the government to open the borders as the gains been bandied to have being derived from the move are not convincing. Rather, the closure of the borders also violated the spirit and the letter of the ECOWAS and AfCFTA which mandates the free movement of goods and people. The bloc is dominated by Nigeria by dint of the size of its economy and its regional influence.