…Says Export Group Suffers Exponential Loss Transactions
The Manufacturers Association of Nigeria, MAN, has drawn attention of government to monument loss of business transactions and shrinking market share of its export group following the shut down of the land borders.
While applauding the Federal Government on the various initiatives and policies, especially the economic sustainability plan introduced in a bid to ensure that the nation’s economy recovers swiftly from the global economic distress aggravated by COVID-19 pandemic, it says the border closure has great business implication to the national economy.
Mansur Ahmed, president of MAN, reacting to information that government intends to open the border said the Association strongly recommend that the prevailing situation with regard to the closure of Nigeria’s land borders should be reconsidered.
“It is now one year since the government closed its land borders for clearly justifiable reasons the flagrant disregard for international, political and economic protocols by our neighboring countries which needed to be addressed. MAN welcomed and commended this bold step.” Ahmed said.
The Association further believed that progress has been made on the issue and is of the view that a review on the status of the border closure is pertinent and in line with the core objective of the African Continental Free Trade Agreement (AfCFTA) protocol which is premised on liberalization of intra-regional trade in Africa.
The president disclosed that since the closure, the Association has conducted a research with its members, the outcome is that some sectors had considerable increase in their productivity, while some sectors recorded sharp decline.
In particular, the Export Group of the Association clearly suffered huge losses due to logistics issues occasioned by the closure as it takes an average of 8 weeks for the carriers to ship and truck goods within countries in the same region vis-à-vis trucking through the land border, which takes an average of 7-10days.
Furthermore, the increased traffic through our sea Port as a result of the closure has increased the perennial congestion at the Apapa and Tin Can Island Ports leading to greater challenges to exporters and increased demurrages cost and other Port levies.
Some manufacturers who export to neighboring African countries had to close down their export segments due to the border closure which discouraged long-term investments and affected the economy.
The implications of these are that manufacturers in Nigeria have continued to lose and are still losing market share on daily basis in the West African corridor as export of manufacturers products have now become overly less competitive.
For instance, major players in the beverages; polypropylene(PP)bags, tobacco, cement, toiletries and cosmetics industries are losing markets they had worked very hard to secure in the West and Central African region. This is a position that Nigeria has hoped to leverage on to secure a strong position in the African Continental Free Trade Area (AfCFTA) which kicks off in January 2021.
The challenge occasioned by the land border closure is detrimental to many manufacturers and not just a handful. Hence rather than being selective in the approval for operation, the Association strongly recommends that in the interest of the growth and development of the Nation’s economy, all manufacturers should be granted access of operation via the land borders.
In view of tackling the initial problem hinted by Government on the shutting of the land borders, MAN advocated for a holistic approach that will address the root cause of the problem and provide mutually reinforcing solutions rather than a border closure which is not a sustainable solution to the challenge of trade distortions and abuse of economic protocols by neighboring countries in the region.
In its recommendations MAN, advised for the establishment of joint border patrols with neighboring countries involving police, customs, immigration, navy and state security services of the countries.
Further recommendations include investment in new technology that will improve accountability and transparency and enhance efficiency in the operations of customs services, strengthening the coordination among the regulatory agencies to ensure that they share trade information and timely review trade policies, engaging with the Government of Niger and Benin Republic on trade data sharing and ensure that containers in transit to Nigeria are not offloaded into trucks and smuggled into Nigeria and establishing a clear and enforceable legal and regulatory framework with stiffer penalties to deter potential offenders.