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Nigeria’s Border Closure: The Pains, Gains, Challenges

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Nigeria shares international boundaries with the Republic of Benin to the west, Cameroon and Chad to the east and Niger, to the north.
Apart from these official borders, the Nigeria Immigration Service (NIS) says more than 1,400 illegal border routes exist in the country as smugglers routes, creating security challenges.
The former comptroller-general of the service, Mr David Parradang, says that although the country has only 84 approved land border control posts, there are also more than 1,400 illegal borders in the country.
But Nigerian authorities note that the porous borders have resulted in crisis in economic sector that has been affecting the development of the country.
So, in August, Nigerian authorities announced and enforced the closure of its border with the Republic of Benin.
The operation under the codename “Ex-Swift Response” was a collaborative security operation involving the Nigeria Immigration Service and Nigeria Customs Service together with Nigeria Police Force and the Armed Forces.
President Muhammadu Buhari attributes the partial closure of Nigeria’s border with Benin Republic to the massive smuggling activities, especially of rice, taking place on that corridor.
He expresses great concern over the smuggling of rice, noting that it threatens the self-sufficiency already attained due to his administration’s agricultural policies.
Similarly, the Comptroller-General of Nigeria Customs Service, retired Col. Hameed Ali, says that the closure of Nigeria’s borders was undertaken to strengthen the nation’s security and protect its economic interests.
Ali also observes that closure would stem the influx of smuggled goods, especially rice and tomatoes into the country, insisting that the closure has significantly increased revenue from import duties.
However, while the government claims to have acted in the best interests of the economy and Nigerians, some Nigerians and citizens of neighbouring countries most affected by the closure, continue to express worry about it, calling for an immediate reopening of the borders.
Some economists believe that the decision to close the nation’s land borders could be painful to the concerned neighbouring countries, considering the relationship with them.
According to them, one of the immediate gains of the closure could be a stop to the dumping of goods from European markets in Nigeria.
They are of the opinion that the action would go a long way in protecting our local manufacturers and producers.
They describe it as policy that would address and redefine relations with our neighbours in a win-win situation.
But critics insist that border closure is an economic aberration as most countries don’t usually close their borders for trade-related reasons.
According to them, the closure has the potential to disrupt the economic lifelines of many traders who depend on legitimate cross-border trade.
Irrespective of this, Emir of Kano, Sanusi Lamido Sanusi, says that the decision to close border is part of the measures to preserve foreign policy in the national interest.
“Last time, I was critical of Nigeria’s refusal to sign the African Continental Free Trade Agreement (ACFTA) and recently I have been in support of the decision to close the border.
“Nigeria is 70 per cent of the population of West Africa and if we have an industrial policy that is aimed at protecting the productive sector of Nigeria, it is a fair competition.
“We cannot allow our neighbours to open their doors to this unfair competition and through the back door undermine our industry.
“It is not about smuggling petroleum or rice; but in 2017, the Republic of Benin was the world’s second largest importer of tramadol, an opioid pain medication that is being abused, to U.S.
“So closing the borders, I hope is not a permanent solution but what I hope is that is an opportunity to sit down and agree on rules and then open up the borders.
“It is extremely important to have a Foreign Policy that is ready to take very firm decision to protect the national interest against dangerous trade activities,” Sanusi observes.
Sharing similar sentiments, Ghana’s former President, John Mahama has lauded the creation of a joint-security taskforce on the borders of Nigeria but warns that the continued delay is harming the economies of the West African region.
Mahama believes that the greatest volume of trade in West Africa takes place in the Lagos – Abidjan corridor.
“I believe that an ECOWAS meeting of the Heads of States should discuss the issues and it could lead to the resolution of the problem.
“So, closing your border is the simplest thing to do; any country can say I’m closing my border to imports from my neighbours, but it doesn’t help to build the kind of integration we are trying to build in West Africa,” he said.
He also expresses the fear that by the time the borders are re-opened, some businesses that rely on each other’s export may have collapsed.
Economists note that one of the immediate consequences of Nigeria’s action is the backlash it will have on Nigerian traders in Ghana.
They allege that more than 400 shops owned by Nigerians have been closed for flimsy excuses that were, hitherto, overlooked.
Nigeria Union in Diaspora also alleges that Nigerian traders in Accra are being harassed and victimised.
In spite of this, authorities in Nigeria, having observed the encouraging changes in the economy, recently foreclosed re-opening of the nation’s borders.
For instance, the Federal Government says 95 per cent of arms and ammunition inflow to Boko Haram insurgent group, kidnappers, killer herdsmen and bandits has gone down considerably.
Minister of Information and Culture, Lai Mohammed, says border closure against importation of foreign goods and illegal immigrants will remain, observing that 296 illegal immigrants have been arrested.
According to him, the decision to close the borders is taken to secure the country which has been confronted by numerous trans-borders economic and security challenges.
“These challenges range from banditry, kidnapping, smuggling, illegal migrants and proliferation of light weapons, among others.
“The preference for foreign goods, especially food items such as rice, has continuously impoverished our farmers and adversely affected domestic government policies supporting the agricultural sector to enhance food security.
“It is, however, disturbing that some neighbouring countries circumvent the ECOWAS protocol on transit.
“ECOWAS protocol on transit demands that when a transit container berths at a seaport, the receiving country is mandated to escort same without tampering with the seal to the border of the destination country.
“Experience has shown that our neighbours do not comply with this protocol. Rather, they break the seals of containers at their ports and trans-load goods destined for Nigeria,” he said.
The minister, who expresses satisfaction with success so far recorded by the joint task force, observed that the singular decision has reduced importation of foreign goods, increased revenue generation and enhanced security.
“On the economy, the partial closure of the borders has curbed the smuggling of foreign rice into the country, in addition to other prohibited items.
“Our series of interactions and engagements with Rice Miller Association of Nigeria since the commencement of this exercise has shown that the border closure has enhanced more production and milling of Nigerian rice.
“Patronage of local rice has increased and farmers are expanding their farms as well as engaging more hands.
“Border closure has also impacted positively on revenue generation which in turn will be used to build more infrastructures and develop critical sectors of the nation’s economy.
“The border closure has also curbed diversion of petroleum products from Nigeria to neighbouring countries,” he said.
Mohammed says further that 95 per cent of illicit drugs and weapons that are being used for acts of terrorism and kidnapping in Nigeria is through porous borders.
“Our conclusion is that the arms and ammunition these terrorists and criminal elements are using no longer gain access into the country.
“The drugs which affect the health and wellbeing of Nigerians have equally been reduced,” the minister said.
He assures the public that government, through diplomatic channels, would continue to engage the nation’s neighbours to agree to comply with the ECOWAS Protocol on Transit.
According to the minister, goods that are on the prohibition list to Nigeria, such as rice, used clothing, poultry products and vegetable oil, should not be exported to the country.
He also notes that the closure has provided a unique platform for the various participating agencies to jointly operate together, thereby strengthening inter-agency collaboration and reducing animosity.
He insists that the purpose of border closure is to promote a secure, peaceful and prosperous Nigeria.
Mohammed, therefore, calls on all Nigerians to be patriotic by patronising local rice to help the country to attain self-sufficiency in local rice production and boost the economy.
Enehikhuere writes for News Agency of Nigeria

 

By: Julius Enehikhuere

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Foreign Exchange Inflow Falls To $4.97bn

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Foreign exchange inflow into the economy fell by 59.8 per cent in April according to figures obtained from the Central Bank of Nigeria (CBN) monthly report on ‘Foreign exchange flows through the economy’.
Part of the report read, ‘Aggregate foreign exchange inflow into the economy declined sharply, reflecting tepid global economic recovery, which undermined foreign trade and capital flows across countries, despite the COVID-19 vaccination drive.
“Foreign exchange inflow through the economy dropped by 59.8 per cent to $4.97bn in April 2021.
“The decrease was attributed, largely, to a sharp decline in autonomous inflow, particularly invisible purchases and official non-oil receipts, which declined by 63.1 per cent and 75.2 per cent, to $2.95bn and $0.81bn, respectively, in April 2021.”
According to the report, a breakdown of activities showed that foreign exchange inflow through the CBN was $1.66bn in April 2021, a decrease of 55.8 per cent below the $3.76bn in March 2021.
It added that inflow through autonomous sources, at $3.31bn in April 2021, was 61.6 per cent below the level in March 2021.
The CBN also said that aggregate foreign exchange outflow through the economy fell by 13.7 per cent in April 2021.
Aggregate foreign exchange outflow through the economy fell by 13.7 per cent to $2.74bn, below the $3.18bn in the preceding month.
Outflow through the CBN declined by 10.4 per cent to $2.58bn, compared with the $2.88bn in the preceding month, due largely to the bank’s policy on foreign exchange market.
It added that outflow through autonomous sources, at $0.16bn, decreased by 46.0 per cent in April 2021, compared with March 2021.
Overall, it said, the country recorded a lower net inflow of $2.23bn in April 2021, compared with a net inflow of $9.19bn in the preceding month.

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NNPC Denies Funding 2019 Elections With Oil Traders’ Bribes

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The Nigerian National Petroleum Corporation (NNPC) has  reacted to an allegation that fees that trading firms paid agents to win oil contracts from the corporation might have raised funds for the country’s past two elections.
Nigeria’s past two general elections held in 2015 and 2019.
The contest for the presidential seat was mainly between ex-President Goodluck Jonathan and President Muhammadu Buhari in 2015, while it was between Buhari and former Vice-President Atiku Abubakar in 2019.
Buhari was declared winner in the two elections.
Citing lawsuits in London and New York, Bloomberg had reported last Friday that an ex-BP Plc oil trader alleged that cargo allocations by the NNPC could have contributed to preparations for general elections in 2019.
The report said a former Glencore Plc employee in July admitted paying a middleman $300,000 to secure a crude shipment from the NNPC, understanding the money would be spent on the nationwide election that took place four years earlier.
The NNPC, through its Direct Sale of Crude Oil and Direct Purchase of Petroleum Product scheme, awards contracts that allow companies, including international trading houses and indigenous firms, to lift crude oil in return for the delivery and supply of petroleum products. The contracts are usually for one year. 
The Group General Manager, Group Public Affairs Division, NNPC, Mr Garba-Deen Muhammad, has, however, refuted the allegation.
“[It’s] not true, and I think that is obvious if you read the story with an open mind,” he said via a text message to a national daily. 
Jonathan Zarembok, who left BP’s West Africa desk last year, was quoted as saying in the suit that he suspected that fees paid by the United Kingdom energy giant to obtain NNPC contracts would go toward the 2019 elections.
He filed an employment claim against BP, alleging that he was fired for raising concerns about the large sums being transferred to intermediaries to win business in Nigeria.
Zarembok was quoted as saying in a witness statement made public this month that emails sent in 2017 by a BP executive in Nigeria were a “clear red flag” and implied “there would be pressure to pay bribes”.
According to Bloomberg, the emails discussed how preparations for elections would get underway in 2018.
“We understand what that means,” the executive wrote.
He said the company then wired $900,000 in fees to a local agent after securing two oil cargoes from NNPC.
“BP is defending in full and denies all allegations made by the claimant,” Bloomberg quoted the company as saying in a statement.
It said BP declined further comment while Zarembok’s case at a London employment tribunal continues.
The report noted that similar details emerged two months ago, when Anthony Stimler, who left Glencore in 2019, pleaded guilty to corruption and money-laundering charges.
It said Stimler was notified in September 2014 that “Foreign Official 1” was asking all NNPC clients to pay an advance on each cargo “in connection with a then-upcoming political election,” according to US court filings.
He then had Glencore wire $300,000 to an intermediary company, which prosecutors said was used “to pay bribes to Nigerian officials.”
US prosecutors outlined how Stimler and others paid bribes worth millions of dollars in several countries, including to NNPC officials, between 2007 and 2018, according to the report.

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VAT War: PNG Backs Southern Govs -Says It’s Part Of Restructuring

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The Convener of Pro-Nigeria, Mr. Lai Omotola, has broken silence on the Value Added Tax (VAT) war currently going on between the Federal Inland Revenue Service (FIRS) and five southern states. 
The five southern states include Rivers, Lagos, Ogun, Ekiti, and Akwa-Ibom states.
From the time a Federal High Court in Portharcourt gave a ruling that state governments, and not the FIRS, have the constitutional power to collect VAT, the Rivers State and Lagos State had quickly passed bills authorising the states to collect VAT.
Reacting to the development, Omotola, in a statement, said that PNG was in full support of states collecting VAT.
“We in PNG support the development and the subsequent stand by Lagos State and Rivers State in creating a law to enable their states to collect VAT. Others who have joined in the bid are states like Ogun, Ekiti and Akwa-Ibom states.
“This is a welcome development because we feel that it is lawful and it is in sync with the intention of our founding fathers that every state should be collecting VAT.
 “It will also show fiscal restructuring towards economic development and at the end, Nigeria as a country will be better for it”, PNG posited.
The group also condemned the reception given by President Muhammadu Buhari to the former Minister of Aviation, Femi Fani-Kayode at the Presidential Villa following the defection of the latter to the ruling All Progressives Congress (APC), recently.
According to Omotola, the President should show reason why Nigeria should still believe in his fight against corruption and believe him as the upholder of basic morals on the account of his red carpet reception to Femi-FaniKayode at the Presidential Villa. 
“Our concern is that this same man is currently having a battle with the Nigerian state via the Economic and Financial Crimes Commission (EFCC) on corruption charges.
“Although the law states that one is innocent until proven guilty, it is morally unjust for a President to receive with a red carpet and stand beside a person against whom the EFCC has established a case, stating unequivocally that he had defrauded Nigeria; and the same matter is still in court; therefore, to now see him being honoured by the President has thrown hope for this country into the wind”, the statement added.

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