Thread by @LeenaHoffmann

FINAL THREAD: In conclusion, Nigeria’s borders are booming or at least until the border closure, were booming. This phenomenon is a powerful testament to the resilience of Nigeria’s economy and the importance of its connectedness with others in West Africa. @Nwankpa_A

2. But let’s be clear, the nature of unofficial cross-border activity, in both importing and exporting, are the result of economic drivers, practical realities and Nigeria’s increasingly disruptive trade policy regime. @TradeLawCentre

3. The informal trading patterns we see today are very much a modern response to the commercial incentives and practical constraints that shape the business environment in Nigeria

4. In a region with long-standing patterns of cross-border contact and exchange, when it too expensive – or risky – to trade within the framework of formal systems, businesspeople will opt time and again for informal alternatives that are readily available.

5. If it costs more time and money to use Nigerian ports than ones in adjacent countries, then traders will use nearby ports and bring goods into the country over the border.
Even if it means smuggling (one of the reasons for the border closure).

6. Smuggling won’t stop btw because the price differentials between Nigeria and its neighbours is too powerful an incentive. You see, smuggling rackets which are well integrated with border management agencies love arbitrary & disruptive policy decisions like border closures.

7. ...it helps streamline and consolidate activities. In short, Christmas has come early if you are into smuggling….everywhere stew 🍝🍝🍝🍝 !!!

8. Btw Interesting little FAO titbit from a great blogpost yesterday by @LeopoldGhins & @PHeinrigs. From 2010-16, Nigeria changed its food importations regulations a record 23 times!!!! oecd-development-matters.org/2019/11/19/nig…

9. ...mixing and remixing tariff rates and bans like a bad Jose Guapo mixtape does not inspire businesses to invest and expand. But who likes volatility and arbitrariness? You guessed it! Smuggling rackets shaking hands with border management, that’s who!

10. Another interesting titbit, in 2013, a past Nigeria interior minister disclosed that there were 1,499 illegal/unauthorised routes into the country compared with the country’s 84 official border control posts. 1,499??? Again, everywhere stew 🍝🍝🍝🍝🍝🍝🍝🍝🍝!!!!!

11. So, is it by design or accident that conditions seem ideal for smuggling and rent seeking facilitation rather than trade facilitation? Banning or closing borders will not make it easier for businesses that operate across borders to formalise.

12. Already some estimates are that 70 or so percent of cross-border trade is unrecorded. If the context for formal cross-border trade is too complex, arbitrary and expensive, more businesspeople will simply go under the radar.

13. Besides not solving the lucrative appeal of smuggling, land border closure will not increase local production (Nigeria’s domestic demand across a range of goods simply outstrips local producers’ capacity to supply - growth isn't magic), there’s also low value addition.

14. Consider also Nigeria's land tenure/titling systems which are unsupportive for serious investment. What about access to credit? Epileptic electricity? Poor connectivity between production centres and markets/consumers?

15. Any one of these challenges is crippling. Together. Near insurmountable. It is because of these challenges and Nigeria’s inadequate response to them that the country’s vast external trade (particularly goods passing through land borders) remains informal and unrecorded.

16. Border closure will not fill this information gap.
Nigeria has shown bad faith to its @ecowas_cedeao neighbours and undermined its capacity to lead & improve benefits for all from a genuinely integrated regional market. A giant such as #Nigeria, can & must do better.ENDS.