Nigeria-Benin quarrel shows limitations of free trade
Since the end of August, Nigeria has kept its border with Benin closed to curb rice smuggling. According to the government, it is a measure to boost domestic rice production.
“I understand President Buhari. He is entitled to protect the country’s economy and promote its own food production. However, this is also evidence that the recent agreement on a continental free trade area is still a work in progress that requires technical attention before it can be put into practice”, remarks Victor Adetula, head of research at the Nordic Africa Institute.
Nigeria has higher tariffs on imports of food than its neighbours. Consequently, unscrupulous individuals and firms import cheap rice from South Korea to Benin, then smuggle it over the Nigerian border.
“Before we can speak of free trade in Africa, it is necessary to harmonise regulations concerning tariffs, and to establish an effective joint common control function along borders. As for today, smugglers take advantage of the disparity in tariffs and other regulations, while diplomats celebrate a fancy agreement without relevance on the ground”, Adetula states.
Ever since President Muhammadu Buhari took office in 2015, he has emphasised the need for Nigeria to be self-sufficient in food production and has consistently striven to ensure food security for the growing population. Government policies to incentivise people to take up farming have had moderate success. Annual imports of rice used to cost the country US$4 billion.
“Rice is staple food in Nigeria, but not nearly enough is produced. In addition, the country has a deficit in foreign currency and spending all those dollars on rice cannot be economically justified”, Adetula concludes.
TEXT: Johan Sävström
African Free Continental Trade Area
Bringing together 1.2 billion people with a combined gross domestic product (GDP) of more than 2 trillion US dollars.
The draft agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of "sensitive items" to be phased in later.
The agreement will also liberalise services and aims to tackle so-called "non-tariff barriers" which hamper trade between African countries, such as long delays at the border.
Eventually, free movement of people and even a single currency could become part of the free trade area.
The NAI Library suggests
Multifunctional land uses in Africa : sustainable food security solutions / edited by Elisabeth Simelton and Madelene Ostwald, 2019 [Online]
The Nigerian rice economy : policy options for transforming production, marketing, and trade / International Food Policy Research Institute, 2016
Titles on Nigeria and rice