Most Nigerian Firms Serve West and Central Africa Markets Via Land Borders

Most Nigerian Firms Serve West and Central Africa Markets Via Land Borders

So many questions on what Onitsha traders are exporting while responding to my call for Nigeria to open land borders for exports even if we keep them closed for imports! But before my response, let me share this comment from Francis.

Francis Oguaju  ·

As always, everything about Nigeria somewhat appears complicated: if you take drastic action to correct or mitigate one problem, you end up creating paralysis in many other places; thinking things through could help, perhaps.

We remain highly deficient when it comes to using data to make decisions; all this while – government’s argument centred on how much we are losing from importation or smuggling via the borders, no one cared to publish how much we also make through exports via the same land borders; a serious omission that shouldn’t be left unattended.

When politicians want to run for highest offices in the land, you hear lines such as, ‘I am still making consultations with my people and associates’, apparently they forget to make the same all important ‘consultations’ on economic issues that affect multiple and varied constituencies and stakeholders; our decision-making capabilities as a people remain questionable…

It’s the same reason why we argue on wage increase, without corresponding arguments on revenue generation and capacity to fund our unrivalled level of profligacy. To advance, we must shift from getting few calls right to that of getting most calls right!

Now, here is my response:

Most big manufacturers like Unilever and Consolidated Breweries use Nigeria as a hub to serve some west and central African countries.  Because of the proximity of Cameroon to Aba, Unilever uses land borders to move its goods to that nation. In Onitsha, we have many small scale manufacturers making biscuits, cosmetics, etc which serve smaller West African nations. It is important to understand that some African countries see Nigeria in the same dimension as we see United States. 

Pharmaceutical firms in Nigeria serve most markets like Togo, Benin Republic and southern Cameroon. In short, in my village of Ovim (Abia State), we have a beverage maker whose 100% market is Cameroon. He does not sell his products in Nigeria as he makes more money in Cameroon than Nigeria even though he sources the raw materials from Oron in Akwa Ibom.

So, when we write Onitsha or Aba, do not just think these guys are just traders. Also understand that many manufacturers serve Niger Republic from northern Nigeria. They manufacture in Nigeria even though they sell in Chad and Niger. There are many reasons for that – Nigeria’s has a more advanced banking system and deeper talent base to support production.

Largely, if this border closure continues, I expect companies like FrieslandCampina WAMCO (makers of peak milk), Cowbell, Unilever to experience massive revenue drops in 2019. Most of these entities serve other small African countries via land borders. 

You may argue why not use sea to move these items – the fact is this, by the time you load a truck and travel from Aba to Lagos, you are largely already in Cameroon. And then it has to spend 3 months in the sea. Why do that especially for perishable or time-sensitive items like drinks, food items and medicine? It makes no sense.

Beyond Closure

The closure of border is simply saying that Customs is not doing its work well. If Customs does its works well, this will not be needed. Also, the argument that import revenue is improving because land borders are closed must also be evaluated on how much exports have been affected. We can make extra N2 trillion from import fees while our local industries that serve small African countries go out of business! Government will have more money in its vaults while families will lose breadwinners.

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One thought on “Most Nigerian Firms Serve West and Central Africa Markets Via Land Borders

  1. Who write our trade policies, and who are the key advisers to the government in the area of commerce/trade?

    You may not be surprised to see largely those who have only worked in government, IMF, WB or universities, with zero experience on what trade looks like in Nigeria and Africa context. There are things you may never be aware of, if you have not spent time in our traditional open markets, most of the people up there don’t really have the level of awareness they claim to have. You need to be on ground in to understand how things truly work, we are not learning enough in this country.

    When you ignorantly destroy people’s legitimate means of livelihoods, as a result of policy aimed at shoring up government’s depleted revenue base, or case of ‘protecting local industries’, without thoroughly defining all the components of those industries, you end up creating chaos.

    We have wasted billions fighting Boko Haram, kidnapping and other menace; what do we really think would happen if we remove a sizable chunk who have been living above poverty from participating substantially in the economic activities? Sometimes our level of self-destruction is legendary.

    We need to have raw data from all players before making certain decisions!

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