Nigeria has lost huge export earnings, prospects and competitive advantage in the African Continental Free Trade Agreement (AfCFTA) to the worsening logistics hiccups from the continued closure of its land borders, the Manufacturers Association of Nigeria (MAN) said.
Though MAN commended the purpose of the closure, it condemned its unnecessary continuation and urged the government to urgently review the measure in view of the chances and resources being lost to competitors.
“It is now one year since the government closed its land borders for clearly justifiable reasons. Thus far, we believe that progress has been made on the issue,” the association said in a statement by its President, Mansur Ahmed.
“Since the closure, the association has conducted a research with members; the outcome is that some sectors had considerable increase in productivity, while some recorded sharp decline.
“In particular, the export group clearly suffered huge losses due to logistics issues occasioned by the closure, as it takes an average of eight weeks for the carriers to ship and truck goods within countries in the same region vis-à-vis trucking through the land border, which takes an average of seven to 10 days.
“Furthermore, the increased traffic through our sea port as a result of the closure has increased the perennial congestion at the Apapa and Tin Can Island ports, leading to greater challenges to exporters, increased demurrage cost and other port levies.
“Some manufacturers who export to neighbouring African countries had to close down their export segments due to the border closure which discouraged long-term investments and affected the economy.
“The implications of these are that manufacturers in Nigeria have continued to lose and are still losing market share on daily basis in the West African corridor, as export of manufactured products have now become overly less competitive.
“For instance, major players in the beverages, polypropylene (PP) bags, tobacco, cement, toiletries and cosmetics industries are losing the markets they had worked very hard to secure in the West and Central African region. This is a position that Nigeria has hoped to leverage on to secure a strong position in the AfCFTA, which kicks off in January 2021.”
“Therefore, MAN is of the view that a review of the border closure is pertinent and in line with the core objective of the AfCFTA protocol, which is premised on liberalisation of intra-regional trade in Africa.”
Condemning the Federal Government’s recent opening of the land borders to Dangote Cement and Bua, MAN stressed that the challenge occasioned by the land border closure is detrimental to many manufacturers, not just a handful.
“Hence, rather than being selective in the approval for operation, the association strongly recommends that in the interest of the growth and development of the nation’s economy, all manufacturers should be granted access of operation via the land borders,” it added.
Going forward, it recommended “mutually reinforcing solutions” to the initial problems instead of “a border closure which is not a sustainable solution. These include establishing “joint border patrols involving police, customs, immigration, navy and state security services of the countries;
“Investing in new technology that will improve accountability and transparency and enhance efficiency in the operations of customs services;
“Strengthening the coordination among the regulatory agencies to ensure that they share trade information and timely review trade policies;
“Diplomatically engage the governments of Niger and Benin Republic on trade data sharing and ensure that containers in transit to Nigeria are not offloaded into trucks and smuggled into Nigeria;
“Establish a clear and enforceable legal and regulatory framework with stiffer penalties to deter potential offenders.”