Nigeria has closed its borders to all neighbouring countries to curtail its dependence on oil.
“Don’t give a cent to anybody to import food into the country,” President Muhammadu Buhari said in a move to bring about “steady improvement in agricultural production, and attainment of full food security [in Nigeria]”.
Africa’s biggest oil producer, Nigeria, relies heavily on food importation to feed its 190 million population. According to official statistics from the National Bureau of Statistics, in the first quarter of 2018, Nigeria spent $503m on agricultural imports. By the first quarter of 2019, this figure had increased by 25.8%.
Forgoing the development of its agricultural industry, the country has relied heavily on oil exportation as its major source of income. Between 2012 and 2016, the drop in oil prices from more than $109 per barrel to almost $41 per barrel would lead to a recession for the country.
Today, as the country attempts to diversify its exports, Buhari’s response to Nigeria’s economic and industrial problems are creating a ripple effect on neighbouring countries, especially Benin.
The border closure is destroying Benin’s economy, a country whose economy is heavily reliant on agricultural imports into Nigeria. Buhari has claimed that many of these imports are goods smuggled illegally into the country.
In Benin, food normally imported into Nigeria are rotting in the field.
This is a distressing sight,” Agriculture Minister Gaston Dossouhoui said this month, as he visited markets in the town of Grand Popo, one of Southern Benin’s main agricultural towns.
“It’s very difficult for our producers. It’s a disaster,” he continued.
Adjeoda Amoussou, head of Benin’s Chamber of Agriculture claimed that, because of the import ban, Benin’s small agricultural producers are millions of CFA Francs in debt.
On the Nigerian side, Hameed Ali, Comptroller General of the Nigeria Customs Service claimed that “the borders will remain closed until our neighbours control what goes through the borders and comply with the laws.”
Some Nigerians, on the other hand, claim that Nigerian border officials partake in the smuggling of goods between the Benin-Nigeria border. Earlier this year, Nigerian sea port officials were caught on camera stealing illegal opioid drugs they had seized.
Critics have described the border closure at the Southern part of the country as rash; a simplistic solution to a complicated problem. This criticism has previously been levelled at Buhari’s, now second-term, governance.
In May 2016, under the directive of the Nigerian government, the Central Bank of Nigeria (CBN) limited access to foreign currency, to influence the population to buy Nigerian goods. SME businesses dependent on importation were badly affected, resulting in a hike in prices for commodities. Inflation soon rose, causing the restrictions to be lifted in the summer of 2016,
Kevin Daly, from Aberdeen Asset Management, would accuse the Nigerian government of being fiscally irresponsible.
Speaking in 2016, he said: “A lot of Nigeria’s current predicament could have been avoided. The country is so reliant on oil precisely because its leaders haven’t diversified the economy.
“More recently, they have tried, and failed, to prop up the naira [Nigerian currency], which has had a ruinous effect on the country’s foreign exchange reserves and any reputation it might have had of being fiscally responsible.”
Today, as Nigeria struggles to meet a national demand for rice, a staple, food continues to be smuggled from Benin into Nigeria. In the last two months, border closure has hiked up rice prices in Nigeria from €22 to more than €55 per 50kg bag of rice, resulting in hunger for many.
The societal and financial impact of the border closure is felt in both Benin and Nigeria – although Benin has been hit harder.
Last year, Benin’s GDP was worth $10.36b, as opposed to Nigeria’s GDP, worth $397.30b. Benin’s economy is neither big nor strong enough, for border smuggling to significantly hurt Nigeria’s agricultural industry, were it well-developed.
Nigeria’s attempts to diversify its exports have led to rash and irresponsible decisions. The economy of a small, precarious neighbouring country is damaged, and Nigerian citizens cannot afford to eat.
To build the country’s agricultural industry, Buhari must offer a transition period that benefits the Benin-Nigerian relationship, without leaving citizens on both sides poor and hungry.