₦airaland Forum

There are many challenges in transborder trade at Seme Border, Badagry, especially the constraints of exchanging the Naira for the CFAs, coupled with the over 100 road blocks manned by Security agencies along the Lagos-Badagry-Seme Expressway with the attendant daily harassment and extortion of innocent Nigerians by security officials on the 62 kilometers expressway. These are some of the factors inhibiting both legitimate trade and lawful movement of persons who do business across the border. Podo Sunday x-rays these issues in this report.

The rate at which Nigerians are openly frustrated in the Seme border area is alarming, despite having their legitimate money to trade with. The rejection of the Naira continues unabated at the border markets, as those accepting Naira are few.

Even some of those accepting the currency are daily engaged in the devaluation of the Naira to enrich themselves, a situation many Nigerian traders have allowed in order to make ends meet. But at the end of the day, it is the consumers in Nigeria that bear the burden of the high prices. A close look at the monetary transactions shows that only few Benin Republic BDC operators accept e-transfers into Nigerian banks, despite the large number of Nigerian banks operating at Seme border, including EcoBank, First Bank, UBA, Union Bank, Zenith bank, etc.


Border closure

background Transborder trading came to a halt when the Federal Government shut all land borders in August 2019 under former President Muhammadu Buhari. Reasons guven by the Government then include the proliferation of illegal importation and smuggling of hard drugs, firearms, poultry foods and agricultural produce into Nigeria from neighbouring countries. Movement of persons were allowed throughout the duration of the border closure but without any legitimate economic activities except pockets of smuggling activities in many of the border communities across the country as a result of the porosity of border, largely aided by the connivance of security operatives.

However, respite came in December 18, 2020 when the Federal Government announced the partial re-opening of four land borders including Seme, in Badagry in Lagos, Illela Border in Sokoto, Maigatari in Jigawa, and Mfum in Cross River where import and export policy known as ECOWAS Trade Liberalization Scheme (ETLS) were again allowed across the four borders specifically for goods locally produced in ECOWAS States. In the same vein, another respite came in April 22, 2022 as the Federal Government again announced the re-opening of four additional land borders which include the Idiroko border in Ogun State (South West Zone); Jibiya border post, Katsina State (North West Zone); Kamba border post, Kebbi State (North East Zone); and Ikom border post in Cross River State (South – South Zone) At Seme border, the border reopening saw Dangote Cement, Gas companies, Nigerite slates, Food beverages, Alumaco Alumin- ium frames and glasses, motor spare parts, electrical parts and electronics etc take advantage of the import-export windows.

Smuggling of fairly used vehicles (Tokunbo) and petroleum products especially PMS and engine oil, beverages and general commodities also got to the peak at the borders under the partial re-opening policy of the Federal G o v e r n m e n t which made many drivers frown at the border closure policy, saying it is counterproductive. But the story took another dimension at the borders again when on May 29, 2023, the current Government of President Bola Ahmed Tinubu announced the removal of fuel subsidy, the galloping effect of the cost of PMS invariably skyrocketed prices of food stuffs, general goods and services due to the surge in the cost of production and transportation, which in turn jacked up the exchange rate of the Dollars and CFAs against the Naira.


Rejecting the Naira

The dominant currency at most Nigerian borders is CFAs since the nation is sandwiched between Francophone countries: Benin Republic, Niger, Chad and Cameroun, among others. In neighbouring cities of Cotonou and Porto Novo near the Seme border, for example, it was observed that one cannot pay an Okada fare with Naira, as they only accept CFAs. As of today, 1000CFA goes for between N1950 and N2150 depending on the mood of the BDC operators at the Benin side of the Seme border known as Krakè. It is also interesting to notice that, on both sides of the border, the Beninoise BDC operators are on the borderline of both Nigeria and Benin Republic, such that, if one is buy- ing or selling CFAs, he must go to the table of a Beninoise, ditto if buying or selling Naira, he must appear before Beninoise exchange operators. They control about 99% of the exchange business at Seme, Owode and Idiroko borders.

However, it is not only the Dollars that determines the rate of the CFAs but the influx of Naira demand on the CFA is huge and the Beninoise are cashing out Nigerians on daily basis continue to throng the Seme, Owode and Idiroko borders in their thousands for both formal and informal trades, either to buy Tokunbo Cars, foreign Rice, Frozen foods, Tomatoes paste and groundnut oil, Okrika shoes and clothings, etc. Nearly all the reopened borders are opened to ETLS and other goods that are not on the prohibition lists. Some of those who responded to our enquiries noted that multiple checkpoints, Nigerians’ lust for foreign goods and thriving smuggling are some of the things government must tackle to find lasting solutions to the debasing of the Naira by Nigeria’s neighbours. Mr. Raji Rasak, the News Agency of Nigeria Badagry Correspondent spoke to our correspondent on the constraints of Naira/CFAs exchange at Seme Border. Raji attributed the first constraints to multiple checkpoints that cause gridlock from Badagry roundabout with over 50 road blocks, turning a journey of 15 minutes to two hours while advising the government to address the issue. “In fact, reducing the checkpoints to three standard ones from the over 100 we have today and rehabilitation of the Seme-Badagry portion of the Lagos – Badagry expressway is a major concern. It is sad to note here that the CFAs remain stronger against the Naira maybe because of the law of demand and supply.

“There is too much Naira chasing the CFAs from Monday to Sunday. They love Nigerians in Cotonou because they believe we are richer than them and could afford to throw away money hence they are taking advantage of our economic crisis”, Raji noted while calling for the total closure of the border with exception being the importation of rice and Tokunbo vehicles.

To halt the indignity Nigerian traders face, the President of Badagry Hengo Youth Association, Comrade. Felix Godonu, who doubles as the Community Liaison Officer of Badagry Port Project, said: “only a healthy government trade and currency policy could move Nigeria from an importing to exporting country and that is the easiest way to strengthen the Naira.” Noting that in spite of the high exchange rate, rice is still cheaper in Cotonou than in Nigeria, Godonu advised the government to consider the total reversal of the border clo- sure policy.

He said the policy has further strengthened smuggling ac- tivities which is mounting pressure on the Naira through the informal sourcing of the CFAs. He also bared his mind on the industrialisation of border communities and the need to empower the Nigeria Border Community Development Agency if the government is sincere about combating smuggling. Godonu also condemned the various task forces set up to police the border, saying that “all they do is to set up multiple checkpoints to harass travellers and extort traders as if Seme is a war zone”.

He wants those checkpoints dismantled and Government approved checkpoints at Gbaji and Agbara should “remain and better equipped to perform efficiently.” Another resident of Badagry who is a social media influencer, Manoah Kikekon, is also calling for the dismantling of the “too many checking points that have become official toll points especially for Customs, Mobile Policemen, regular Police, Immigration, NDLEA, Civil Defence Corps and Air Force”.

Kikekon is also of the view that, if the Federal Government is sincere about the Naira / CFAs wide disparity, the government should initiate a productive economy by investing in agriculture and bringing in investors who ship goods to Cotonou ports to invest in Nigeria. He also called on the government to “pay attention to technical education so as to drive the manufacturing and stop the policy that favours importation from China and elsewhere.” A Badagry based media entrepreneur, Ayo Akide, is of the opinion that, patronage of ‘Made in Nigeria’ products is a way to strengthen the Naira.

He said: “Our taste for luxury and foreign goods is the only reason why a poor country like Benin Republic is taking advantage of Nigerians who troop their country everyday to buy Chinese goods and European vehicles.” He wants the Nigerian Government to look inward and invite more foreign investors who will set up factories in Nigeria. Akide also pleaded with the government to lift the ban on items with no comparative advantage and invest more in agriculture, especially rice farming. He is also not happy with the multiple checkpoints from Badagry round to Seme Border, calling it “ridiculous and makes the frontier look like another Gaza Strip.”


More people speak

A Nigerian Immigration official, who preferred anonymity, is equally not happy at the influx of Nigerians coming across the border on a daily basis in spite of the high exchange rate and the unfriendly disposition of Cotonou traders. He argues that to strengthen the Naira and stop the embarrassment, Federal should put in place tough measures. He said: “If I have the powers, we should lock up the border and let everyone go and feed themselves”, but he also wants the government to “lift ban on goods we don’t have in Nigeria, like vehicles and let importers choose either to use our ports or Cotonou ports. “The second is rice because presently Nigerian rice growers do not have the capacity to meet up local demands. Let importers bridge the shortfall and pay duty on them,” he quipped.

A Lagos-based auto dealer, Chukwuemeka Onyehatara, who would not allow his picture taken, said he can’t stop trading in Cotonou because his customers prefer Tokunbo vehicles as they are accident free. He however, stressed that the troubles associated with getting CFAs is cumbersome and discouraging. Revealing that auto dealers now source for dollars when going to Cotonou, he said he and his colleagues only buy a million CFAs to do some running and for miscel- laneous use. He also revealed that they purchase dollars from white people at Cotonou Port. Prince Adewumi Adeyeye, a resident of Badagry and agriculturist who deals in dwarf coconut from Ghana also lamented the multiple checkpoints and the exchange rate at the border, saying the Naira has lost both weight and value and wants the border fully reopened to ease the exchange tension and further boost the economy of the border communities which has collapsed since 2019 when the border was first shut down.

Alhaja Sulaimon Muinat, an Oyo Indigene but based in Mushin Lagos is a rice merchant and a regular visitor to Cotonou. She speaks a little of French and their local Fon; she said her language advantage has actually helped her transborder business. She said her single trip is worth N10 million and she sources for the CFAs through her customers of many years and usually sends the money ahead. Asked if she’s not bothered about the high exchange, she said will do the mathematics and still make her gains. “I buy quality rice and I have quality customers from Akure, Ondo, Osogbo, Ife, Ekiti, Benin even from Abuja and so on.”

She advised the government to open the border for rice importation so that people can pay duty and bring them in. A senior public servant, Ovi Kuton, said his opinions are based on his personal pains and convictions that all is not well with some government policies and attitude of the people. Condemning in clear terms, the multiple check points, he noted that they have become a major hindrance to business.

He said travelling through the borders is a huge headache as compared to what is obtainable in neighbouring countries where there is decorum and laws are strictly obeyed. He also attributed the influx of Nigerians to Cotonou and high rate of the CFAs to available cheap and markets due to Benin Republic’s low import tariff and said “until Nigeria could beat that, then nothing is going to happen. We either produce for our people to buy or lower our import tariffs. “Another option available to the Government to save the Naira is to formulate and implement policies to accommodate SMEs and ensure For- eign Direct Investment (FDI) incentives, thus, boosting export and strengthening the Naira”, he said.

Islie:
…as currency continues to depreciate

‘We either produce or lower import tariff to strengthen Naira’

‘Too much Naira chasing CFAs, so operators take advantage





https://newtelegraphng.com/nigerias-neighbours-reject-naira-opt-for-cfa-dollars/?utm_source=rss&utm_medium=rss&utm_campaign=nigerias-neighbours-reject-naira-opt-for-cfa-dollars

Nlfpmod

Elusive001:
Over a hundred check points? Are we serious? Imagine this in conjunction with the mad tariffs by nigerian customs. No wonder the price of things will continue to Skyrocket.

Bizibi:
Somebody should give me one reason why buhari shut our borders

Putindbutt:
None of our business, if you want to buy from our neighbours and demanded their currency, that's good for them. We also enforce that only naira must be traded in nigeria.