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Smuggling and the Nigerian Economy

A report by the World Bank on the level of illegal importation of goods into Nigeria from neighbouring Benin Republic and other West African countries should be a major concern to the Federal Government and the agencies responsible for management of the nation’s economy. According to the World Bank, an astonishing N750 billion ($5 billion) worth of assorted goods are smuggled into Nigeria through Benin Republic alone every year.

This amount represents about 15 percent of total smuggled goods through that border. The World Bank report also claims it has “enough evidence” that over $400 million (N6 billion) representing about 25 percent of the total current annual revenue collected by the Customs Service is lost through nefarious smuggling across the sub-regional borders.

The report, which was prepared by two of its leading experts on the African Transport Unit also noted that smuggling into Nigeria will further hamper the operational efficiency of the Customs Service and cause more revenue losses if urgent steps are not taken by government to tackle it. It advised a liberalisation of trade policies which encourage smuggling across the borders.

Put together, the report is troubling but not surprising, considering the increasing rate of smuggling across our borders, especially along the Benin republic axis. A combination of factors account for this unhealthy trend. One of them is the high cost of clearing goods in our ports and the laxity of enforcement of anti-smuggling laws by those charged with responsibility in the country. It is not unkind to say that the integrity of some of the customs and immigration officials statutorily charged with policing our borders is suspect. Many compromise their positions. Bad eggs among them are more concerned with lining their own pockets than checking smuggling activities, thereby denying government much-needed revenue.

Therefore, the World Bank report should not be ignored. It should be treated as a wake-up call to address systemic difficulties in checking smuggling through the Benin Republic borders, and others in the region. In this regard, information exchange is vital. This has become crucial because available statistics reveal that 13 per cent of traffic of goods from the port in Cotonou, the capital of Benin Republic, is destined for Nigeria, while about 75 percent of the containers that land at the Cotonou Port are headed for our country.

We also believe that the current rate of smuggling through the West African sub-region is encouraged by tariff differentials. This has made it more economically viable for importers to patronise other ports in the sub-region rather than Nigerian ports. Government should seriously look into the problem with a view to formulating better policies to redress the situation.

Also, government should take a hard look at some of the treaties of the Economic Community of West African States (ECOWAS). Some of these treaties encourage free movement of people without addressing its harmful effects. Often, this freedom of movement undermines the economy of other countries through unbridled smuggling of goods.

All in all, the World Bank report should be seen as a roadmap for designing new strategies for our country’s trade policy initiatives with neighbouring countries. This is crucial because inability to adequately check smuggling into Nigeria can undermine both national and economic security of the country, with attendant broad political implications.

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One Response to “Smuggling and the Nigerian Economy”

  1. shafiu h. bello says:

    Am a research student who wish to have a copy of this document. Pls what can do?

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