Effect of Border closure in the Nigeria-Ghana relationship
Nigeria to some extent closed border with Benin to avoid smuggling of rice. But despite the fact that the Nigerian authorities has made it clear to the Ghanaians that the Ghanaians were not the reason for closing the border, but to reduce the amount of illegalities going on in the country between Nigeria and Benin border. Ghanaian business has been suffering under the effect. A lot of goods belonging to Ghanaian traders have been locked up in Nigeria for quite some time. The closure of the border have had a huge impact on retailers transporting between Nigeria and Ghana as this has affected their livelihood.
The closure of the border has really affected production in Ghana because most of their goods produced in Ghana are being sold in Nigeria and because of this, manufacturers have to slow down production which is affecting their income.
Nigerians are also not left out on all this suffering being brought about by the closure of the border as Nigerians are currently facing shortage of 9.54 million tonnes of essential food items. The major food items include rice, wheat, sugar, palm oil etc.
It is feared that the deficit may enter to year 2020 if urgent action is not taken by the government to address the insufficiency. Presently, a bag of 50 kilogrammes of locally produced rice has gone up from N13,500 to N25,000 in the market in a period of three months. Also, a carton of frozen fish has jumped from N10,000 to 25,000 or 60 per cent, while turkey, which was N13,000 as at August 19, 2019, has increased by 27.8 per cent to N18,000.
Presently, the country is in deficit of 5.1million tonnes of wheat, while production stands at only 60,000 tonnes. Additionally, It was noted that only importation of the items could bridge the deficit. Also, Sugar deficit has attained 1.89 million tonnes, while production has dropped down from 80,000 tonnes in 2018 to 75,000 tonnes this year, while crude palm oil shortage reached 350,000 tonnes. Then there is the bigger problem of government promoted to petroleum being smuggled out of Nigeria and sold in surrounding countries. The price difference creates the motive to smuggle petrol out of Nigeria.
Nigeria’s largest export is crude oil in Africa, and its largest import is refined oil. Domestic refineries are apparently functioning well below their capacity, causing fuel imports to average 29% of total imports over the past three years. Roughly, 90% of petrol in Nigeria is imported, and all of it is subsidized. Last year, the subsidy bill was predicted to reach $3.85 billion. Smuggling petrol out amounts to the use of public resources to subsidize neighbouring countries. Since the border closure, reports suggest that the delivery of petrol in Nigeria has dropped by 20% and sales by 12.7%. This suggests that the demand for petrol in Nigeria is high because some of it is bought and smuggled out.
The Nigeria border closure must be resolved quickly. It is diverting attention and positive energy from matters that can improve the status of the free trade area, such as investments in transport infrastructure, trade data capture and border protection.