en Inter-réseaux Développement rural en Inter-réseaux Développement rural


The Agro-Pastoral Product With Neighbouring Coutries: What's at stake?

Nigeria is a central actor in the trade of farm and livestock
products between countries in the sub-region. This article
presents and analyses intra-regional trade in West Africa.

Trade between Nigeria and
its neighbours in West Africa
(Niger and Benin) and
in Central Africa (Cameroon, Chad,
Equatorial Guinea) is intense and
long-standing. As a consequence of
its economic importance (over 50%
of GDP in ECOWAS), population
(one out of every two West Africans
is Nigerian), and contrasting levels
of development compared to neighbouring
countries, Nigeria accounts
for more than 60% of intra-regional
trade in West Africa.
This trade involves primarily agricultural
products and manufactured
goods, in large part hydrocarbons. Over
50% of the petroleum consumed in
Benin and Niger is supplied by Nigeria.
Farm trade is nonetheless of
major importance, in particular the
foodstuffs that are consumed by the
Trade in agricultural products between
Nigeria and its neighbours has
expanded greatly over the last thirty
years, and now has a well-established
structure, including both formal and
informal elements. In addition to reciprocal
trade that complies to some
extent with current regulations, there
are exchanges that exploit the opportunities
created by the multiple trade,
fiscal and monetary divergences between
the Federation of Nigeria and
its neighbours in the franc zone.

Nigerian Exports to Neighbouring
As producer of 75% of the
dry grains grown in western and central
Africa, Nigeria is a net supplier
of millet, sorghum and maize to Niger,
Chad and occasionally northern
Cameroon. Transactions with these
three countries represent a volume
of around 500,000 tonnes annually,
and constitute a food safety valve for
Niger and Chad, countries that regularly
experience food shortages that
are more or less severe.
Root plants and tubers are the
second largest category of products
exported by Nigeria to neighbouring
countries, in particular yams and cassava
products (mainly gari). While total
production is estimated at around
80 million tonnes, Nigerian exports
of yams and cassava products do not
reach the volume of grain exports.
The third category of Nigerian agricultural
exports includes counterseasonal
crops, principally potatoes
and tomatoes. Nigerian potatoes, that
compete successfully with extra-African
imports on markets in Benin,
show that local products can find local
outlets if production is encouraged by
appropriate incentives, primarily better
access to the production factors (inputs
and irrigation) needed for cultivation.
Potatoes are grown in several irrigated
sectors that were initially intended for
rice or wheat crops in northern states
such as Kano and Jigawa.

Imports from the Surrounding Region.
Only a limited range of farm and
livestock products have been exported
by neighbouring countries to Nigeria
in recent years. The main imports are
cowpeas (niebe) and tigernuts (souchet),
mainly from Niger. Niger’s
cowpea exports have been erratic.
In the 1970s and 1980s, they stood at
around 300,000 tonnes per year, and
then fell to under 100,000 tonnes in
the 1990s. The policy deployed by the
government of Niger over the 2000-
2010 decade was based on better guidance
for growers, price incentives, and
organised harvest collection; it doubled
production volume, estimated at
over 1 million tonnes in 2008. Half of
the crop is exported to Nigeria that
implicitly supports cultivation of this
legume in Niger by offering a sure and
steady market outlet.
The market for live animals is also
growing rapidly. On top of exports
from Niger, Chad and Centrafrique,
via Chad and northern Cameroon, to
Nigeria there are now exports from Burkina Faso, via Benin. It is estimated
that one million head of cattle
are traded each year.

Informal Trade Fuelled by Nigeria’s
Protectionist Stance.
The exchange
of agricultural and pastoral products
drives trade that is mutually beneficial
for States and for the private sector.
Trade development is hindered,
however, by the unpredictable nature
of Nigerian trade policy and by the
numerous obstacles (periodic import
and export bans on certain products,
graft by inspection and enforcement
officers) that relegate a portion of
transactions to the informal sector
or even to illicit trafficking.
Indeed, the outstanding feature of
Nigeria’s trade relations with its neighbours
is the prevalence of informal (i.e.
unrecorded) transactions for a certain
number of products. This trafficking
probably began with cocoa deals in the
late 1960s and early 1970s. The civil war
in Nigeria disrupted trade channels in
Nigeria, facilitating contraband cocoa,
much of which passed through Benin
to reach the international market. Although
Benin had no cocoa plantations
on its territory, cocoa accounted for
40% of the country’s official exports
between 1968 and 1970.
The measures deployed by the Nigerian
government to counter the effects
of the second oil crisis, including
rationing or outright embargoes
on certain mass market commodities
(rice, wheat, wheat flour) gave rise to an
almost-legal form of smuggling: re-export
trade. In this type of transaction,
a country imports consumer products
in excess of its domestic needs, and
exports the surplus to other countries,
taking advantage of differing protective
trade tariffs. Unlike through-country
trade that allows land-locked countries
to receive supplies via coastal countries,
re-export is a fraudulent activity.
It involves products that are either
banned or highly taxed as imports by
the country of final destination.

The underside of Intra-ECOWAS Trade

This contraband remains vigorous,
and is stimulated by the market protection
measures taken by the Nigerian
government. For example, Nigeria’s
protection of the rice market went from
an initial ban on imports, to a 300%
duty in 1994, then 100% in 1998, and
finally stabilised at a tariff around 50%
at the beginning of the 2000s. Since
the adoption of the Common External
Tariff (CET) by ECOWAS, the rate of
protection is now 30% for Benin and
31% for Niger, positioning these two
countries as the largest re-exporters
in the zone. Re-export volume is estimated
to exceed 500,000 tonnes
per year. After rice re-exports come
butcher meat, in particular poultry
cuts (over 50,000 tonnes traded) and
golden apples.

Trade Driven by Opportunity and
Trade in farm products
and livestock is organised and carried
out via structured merchant channels,
sometimes on a regional scale. The economic,
financial and strategic stakes
are high for this trade, and the different
stakeholders—States, economic operators
and consumers—are not always
all winners. The overall value of trade
in agrifood products between Nigeria and neighbouring countries is estimated
at more than $1 billion, broken
down as follows: exported livestock
on the hoof, $350 million; re-exports
from neighbouring countries to Nigeria
(rice, poultry cuts, apples), $300%
million; locally grown grains, $200 million;
and about $100% million for other
contraband (cowpeas, yams, cassava
flour, potatoes, tomatoes, onions, other
spices) for the most part from Nigeria
to neighbouring countries.
The added value of these transactions
goes essentially to economic operators,
some of whom have formed networks
with very strong ties to complicit public
authorities. This trade has allowed
a class of prosperous businessmen to
flourish, whose strategies constantly
defy the rules set forth by regional integration
organizations and by States.
The countries involved (Nigeria,
Benin, Niger, Cameroon and Chad)
do not share the same analysis of the
effects and impacts of these transactions,
even though all agree that they
help consolidate the ongoing regional
integration process. For Nigeria, the
re-exportation situation is less a factor
mitigating the effects of the economic
and financial crisis that has diminished
urban consumers’ purchasing power,
than it is a phenomenon that wipes out
the government’s efforts to jumpstart
domestic agricultural and industrial
production. Inversely, for Benin and
Niger this type of transaction brings
considerable financial resources, and
their budgets, fuelled by various taxes
levied on re-exported products, would
be in serious trouble if re-exports were
eliminated. The recent crisis between
Benin and Niger that arose over the
rationing of Niger’s vegetable oil imports,
in part re-exported to Nigeria,
is a good illustration of how these
two countries have internalised the
economic stakes associated with this
quasi-official contraband.
The creation of the ECOWAS customs
union, with a five-band CET, will
bring on a restructuring of the regional
market and more fluid intra-community
transactions. National fiscal regimes
will have to be harmonised to
accompany this union, however—Niger
and Benin apply 18% VAT, compared to
5%in Nigeria—if it is to significantly
reduce contraband and foster an attractive
market zone. The hesitation
and procrastination observed in the
CET negotiations leave little room for
hope that this will be achieved in the
near future.

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