EXCEPT the security situation improves in the North-Eastern part of the country within the next few weeks, Nigeria may continue to lose out in the benefits of ECOWAS sub-regional trade, especially with the commencement of the Common External Tariff (CET).
Already, informal sub-regional trade with neighbouring countries like Niger, Cameroun, Chad among others has suffered a huge blow with many manufacturing firms shutting down operations in the region as a result of growing insurgency by Boko Haram.
With the commencement of the CET among ECOWAS member countries on January 1 this year, implementing the provisions of the tariff has remained unrealistic in the North-Eastern region of Nigeria.
Specifically, assaults from the terrorist group have affected the free movement at the borders between Nigeria, Chad, Niger and Cameroun; thereby undermining the provisions of the ECOWAS free movement protocol.
The Financial Action Task Force (FATF) noted that most of the borders in West Africa are porous and there are many ungoverned spaces around the vast boundary lines.
Despite enjoying huge informal trade within the borders, the FATF noted that all the countries lack the capacity to effectively monitor the borders and boundary lines which is a vulnerability that can be exploited by terrorist groups to establish training bases for their members, and to transport and distribute weapons, across the sub-region.
Hitherto, the National President, Nigerian Association of Chambers of Commerce of Commerce, Industry, Mines and Agriculture (NACCIMA) Alhaji Mohammed Abubakar, described the growing insecurity in the Northern region as one undermining the growth of industrial firms in the country as many firms have had to cease operations in the region.
Indeed, the National Consortium for the Study of Terrorism and Responses to Terrorism had expressed concerns on the need to address the security issues through multilateral cooperation as part of efforts to address cross-border vulnerabilities.
Research Associate for the Centre, Scott Menner, said, “despite the May 2014 Paris Summit for Security in Nigeria where Nigeria and its neighbours agreed to cooperate on security issues, all of the parties have a long history of failing to establish clear measures for multilateral cooperation to address cross-border vulnerabilities. Some also hold historical grudges from border conflicts. The two major issues preventing effective cooperation are the right of pursuit across international boundaries and intelligence sharing.”
A former deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, recently noted that “…the security situation has affected farmland production and that has led to increase in food prices.”
Last year, it was not a surprise that Nigeria statistics Bureau raised alarm that food prices escalated to 9.8% in June, and inflation hit 8.2 per cent, the highest in the past 10-month.
In a recent publication too by US base independent research body, Brookings, titled The Impact of Conflict and Political Instability on Agricultural Investments in Mali and Nigeria, the effects of conflict on the agricultural sector are largely due to the risk of being attacked by insurgents.
“People across all value chains feared movement outside protected areas because of attacks by the insurgents, farm workers feared attacks while grazing animals, processors lost workers when families left the conflict zone, and traders began limiting their movements,” it stated.
Without mincing words, the agricultural sector has become a primary target for militants in need of supplies, as Brookings’s data showed that cash, food and equipment were more likely to disappear. It also added that the danger has made other things like transportation more risky and therefore more expensive, which again put pressure on the economic output.
Though the authors stated that the impact of Boko Haram on the Nigerian economy is still localized, the instability has had an effect on the agricultural products from the north and has severely reduced cross-border trade with Cameroon, Chad and Niger, Brooking noted.
Also, it should be pointed that Niger, Cameroon and Chad are yet to survive the serious economies threat posed by the crisis in Central Africa Republic (CAR), Mali, Libya and South Sudan. The series of attacks earlier distrusted trade activities in the various borders. Niger which is currently experiencing food scarcity and ranked one of the lowest nations (187th in 2013 by the United Nation’s Human Development Index) is faced with shaky economic situation and limited basic social services, leaving serious negative impacts on the locals.
According to the World Integrated Trade Solution (WITS) however, Niger ranked Nigeria’s 4th export partner with partner share of 11.08% in 2010 and 5th in 2011 with 5.00% partnership share.
Though recent figures are updated, movement of goods between Niger and Nigeria remains slow as the region’s landlocked position, desert terrain, poor infrastructure and environmental degradation pose serious challenge in a clime dependent on subsistent farming.