Thread by @AmakaAnku

It has been difficult for me to engage w/ largely dismissive criticisms of #Nigeria’s move to close its land borders with #Benin & #Niger to address rampant smuggling and #Benin’s systematic flouting of Ecowas trade protocols & other treaties signed w/ #Nigeria.

But I feel this issue is too important not to try to improve public understanding about what’s at stake and why the status quo was untenable. So, what follows is a #thread about border security & rules-based trade, which is what the border closure is about at its core.

I’m going to state upfront that I will not engage re this issue on this medium. Instead, I’ll be doing a Facebook Live on Monday w/ @EurasiaGroup colleague Willis Sparks @ 11am EST/5pm Lagos. Please send (constructive) questions w/ hashtag #NaijaBorder & we will address them.

So, security implications of border control are mostly obvious. I won’t address that here. I’ll focus instead on implications for trade and industrial policy.

Let’s start w/ trade policy. A trade agreement is like an exchange. Country A gives up something (e.g. tariff revenue or protection of a domestic industry X) to get something else (e.g. cheaper access to another export market, which is an opp to grow domestic industry Z).

There are inevitably winners & losers. Country A might risk killing off industry X but now attracts investment to industry Z which now has a larger market. This usually entails huge political & displacement costs so countries are extremely careful to structure win-win agreements.

As a result, there is no such thing as completely “free” trade, where ANYTHING is allowed in/out bc of a trade deal. NAFTA, for example, is thousands(!) of pages long, with lots of complicated rules to ensure that only goods made within (or w/ input from) NAFTA countries benefit.

Now, obviously, if you don’t control your borders, there is no basis for trade policy bc you cannot enforce whatever you sign up to. That means you have no motivation to implement your end of the deal either.

For example, #AfCFTA tariff liberalization - why give up the little tariff revenue from official trade when you can’t even ensure that African made goods will benefit given rampant smuggling?

This is the first principle. BORDER CONTROL is CRITICAL for EFFECTIVE TRADE POLICY.

Now, industrial policy. Border closure isn’t only about rice. It helps domestic production of chicken, steel, vegetable oil, & other products in which hardworking #Nigerians have invested despite tough business env, but which end up being undercut by substandard foreign products.

But, since everyone is focusing on rice, let’s address that too. I’ve heard many ask ‘why does govt want to increase domestic production at the expense of the poor (who can get cheaper rice from Thailand).’(BtW Thailand subsidizes & protects its own farmers!)

Two obvious reasons: (1) You cannot afford imports unless you also PRODUCE something to export. So if your growth strategy is to import a lot of cheap stuff, you MUST also make a lot of different things you can export to earn the fx for your imports.

2) Greater volumes (& ultimately efficiency in) domestic production is a pre-requisite to export orientation. You (obviously) cannot START by encouraging exports without first incentivizing, and if need be, protecting domestic production.

So why rice? Well, why NOT rice? Rice is one of main food items #Nigeria spends fx on. There are all sorts of strategic reasons to focus on it, incl nat’l security. Plus domestic prod HAS improved over the years despite porous borders & cheap foreign rice, so smth to build on.

Now you might be wondering: why does #Nigeria need to shut its border to gain effective control? Why can’t it simply deploy technology or otherwise improve border control on its end? Short answer is none of these are (or should be) mutually exclusive.

You can and must deploy technology for a sustainable solution. But you MUST also get your neighbors to enforce agreed trade rules that are meant to stimulate investment & protect the region from foreign dumping, etc (not to mention obvious security reasons for border control).

If only way to do that is to close the border at considerable cost to EVERYONE, then that’s the price you have to pay. If there are better ways (& #Nigeria did try diplomatic methods), then do that. Problem is #Ecowas does not have an enforcement mechanism, leaving few options.

Of course border closure is extremely costly. It results in higher food prices, considerable costs to existing #Nigerian exporters (v bad given need to encourage exports), disruption to livelihoods of border communities, stifles legal trade, and MORE. This is NOT an ideal path.

But policymakers know that one often has to work with non-ideal circumstances. There are NO cost-free policies. If absolute clean hands were a req for policymaking (eg. first root out corruption on #Nigerian side b4 forcing #Benin compliance), govts wld never get anything done.

You CAN do both simultaneously. Just like we want govt to remove petrol subsidies WHILE increasing domestic refining (bc subsidy reduction frees up fiscal space for other priorities), we should encourage #Benin compliance even as #Nigeria works to clean up corruption at border.

MAKE NO MISTAKE, if you close the border for 6 months, then reopen it and do NOTHING ELSE, you will have created considerable pain for NO GAIN. Smuggling networks would regroup in 1-2yrs and you’ll be back to square one. This is a legitimate critique.

But that is no excuse for disdainfully dismissing the current efforts. You MUST try to force neighborly compliance w/ trade & border rules that are necessary for regional industrialization. You MUST also couple this extreme measure with other steps to ensure long term compliance.

Ultimately, no country successfully enforces border security unilaterally & #Nigeria will not be first. Mutual emforcement of border rules is CRITICAL for regional integration & growth. #Benin’s compliance w/ agreed rules is an important first step & one we must all encourage.

This is now (by far) the longest thread I have ever written on Twitter, so I will stop here. More questions or thoughts? Tweet using #NaijaBorder & we will try to address during a FB Live on Monday, Nov 25 @ 11am EST/5pm Lagos time.

Bonus tweet, I couldn’t resist taking these photos promoting the #UK’s border force as I transited through Heathrow yesterday: