The Lagos Chamber of Commerce & Industry (LCCI) has frowned at the disruptions and losses that businesses and individuals have suffered as a result of the border closure. It said corporates, large number of informal sector players and individuals doing legitimate businesses across the borders have become victims of the new directive.
In a statement, its Director-General, Muda Yusuf, said the closure of the land borders for close to two months has come with benefits and costs.
He said though reports indicate a drastic reduction in smuggling of rice, poultry products, sugar and smuggling of petroleum products outside the country. He said it is important to reckon with the costs, supply chain disruptions and losses that businesses and individuals have suffered as a result of the closure.
He said the decison has resulted in what he called innocent casualties.
He said: “Jobs have been lost, prices have skyrocketed, legitimate exports to the sub region have been halted, intermediate products for some manufacturers have been cut off, some multinationals companies have been de-linked from their sister companies in the subregion.
“The economies of border communities have been paralysed with consequences for unemployment and poverty. Over 90 per cent of Nigeria’s trade with the West African sub region is by road. We export manufactured products as well as agricultural products, detergents, toothpastes, plastic products, steel products, kitchen utensils, grains, ginger, onions, among others. We also undertake many re exports to the sub region. These are sources of livelihood of Nigerians doing legitimate businesses.”
Muda said there are also thousands of transporters who make a living from legitimate trading activities running into hundreds of billions of naira. He advised the government to weigh the costs and benefits adding that often, government fails to count the cost of its policy on the citizens and businesses.
The LCCI chief said the contribution of trade and commerce to the economy should not be underestimated as distributive trade sector accounts for about 15 per cent of the nations gross domestic product (GDP). According to him, traders play a major role in the value chain of the real sector activities in the economy as it is perhaps the largest employer of labor in the nation’s economy.
He argued that the position of LCCI on the border closure is not to diminish the importance of security in the border management process but for government to deal with neighboring countries that has been identified as sabotaging government efforts to curb smuggling and check insecurity. He advised that the situation should be managed and appropriate responses deployed.
Muda stressed the need to fix structural, institutional and policy shortcomings that perpetuate smuggling.
Muda identified the shortcomings in government policies to include weak institutional capacity to police the country’s vast borders across the over four thousand kilometers of land borders and 853 kilometers of coastline and the failure to deploy technology to manage the borders and international trade processes.
Others, according to him, are weak productive base in the domestic economy which aggravates production and operating costs, thus impacting adversely on domestic prices and competitiveness, high transportation costs and weak domestic connectivity including high poverty incidence which makes majority of citizens crave for cheap products, including food items.
Others are prohibitive import tariff which create compliance and enforcement challenges for the Nigerian Customs Services (NCS) and perpetuates corruption in addition to a foreign exchange policy which gives incentive to imports and penalises domestic production and exports.