After sixteen months of blockade, Abuja has reopened its borders with Benin and three other countries (Cameroon, Niger and Chad). And contrary to forecasts, the Beninese economy has been able to show some resistance. Explanations.

Relief and fervor. The reopening of the borders between Nigeria and Benin was welcomed by the border populations of Sèmè-Kraké (Benin) with popular jubilation. Many Beninese symbolically crossed the border “just to make sure it wasn't a hoax”.

In August 2019, at this very border post, thousands of trucks full of goods were blocked, leaving many traders to their distress. From now on, the relief can be read on all faces and the fervor has regained its rights.

" At last ! Business will resume,” says Hamed, a motorcycle taxi driver who will be able to resume his job of transporting goods between the two countries. "The celebrations will be beautiful", happily foresees Kadidjath accustomed to supplying customers in Lagos with food products.

Satisfaction with the authorities

The Beninese authorities took advantage of the lifting of the blockade imposed by the large eastern neighbor to highlight the resilience of the Beninese economy. "We have resisted and our economy has shown its resilience...", defended the minister spokesperson for the Beninese government, Alain Orounla, when Nigeria's decision to reopen the borders with its neighbors, including Benin, was announced.

"The predictions of scarcity and famine" launched against Benin did not work because "extraordinary work has been done...", justified the minister.

A blow to Benin's economic activity and relative resilience

In fact, according to the World Bank, the closure of the Nigerian borders dealt "a severe blow to Benin's economic activity". This "decelerated to 6.4% in 2019, against 6.7% in 2018, i.e. a growth rate of GDP per capita of 3.5%", noted the Bank while recognizing "a relative resilience”. How to explain it?

Shrinking trade

For the Beninese minister in charge of the economy and finance, Romuald Wadagni, "Benin has made a lot of efforts" in recent years to "modernize its customs services" and "intensify the fight against customs fraud" so that "smuggling has no influence on the figures of the Beninese economy".

According to an official from the Ministry in charge of the Economy, “official exchanges between the two countries have shrunk” but “State coffers have not suffered unduly from the official cessation of smuggling activities”.

In September, Benin's General Directorate of Customs announced that "for the first eight months of the year, 219.170 billion CFA francs were mobilized, i.e. an implementation rate of 75% compared to initial forecasts, while that the IMF in its review credited Benin with no more than 60%”

Internal tax revenue exceeds customs revenue

Bruno Amoussou, veteran of Beninese politics and current president of the Progressive Union supporting the action of President Patrice Talon, remembers the closing of the Nigerian borders in April 1984 under the same President Muhammadu Buhari.

He finds that the impacts on the Beninese economy were more severe in the 1980s than today because, according to him, "reforms that led to a change in the structure of the Beninese economy" such as "the increase in internal tax revenue which brings in as much resources to the State coffers as customs revenue”.

Indeed, according to the quarterly economic outlook, published by the General Directorate for Economic Affairs of the Ministry of Economy and Finance in April 2020, "customs tax receipts in the fourth quarter of 2019, therefore after the closure of the borders, amount to 89.28 billion CFA francs while tax revenue from taxes is 155.47 billion CFA francs”.

The rice of discord

But in fact, as most players acknowledge, smuggling has never stopped between the two countries. According to the economist Idelphonse Salou: “Benin and Nigeria share more than 700 km of border of which a hundred are officially controlled. The rest is essentially porous. Today, the two States do not have the means to carry out surveillance likely to put a stop to smuggling”.

Our great eastern neighbor must now show humility

Like rice: massively imported by Beninese traders from Asian countries, it is sold much cheaper in Nigeria and fiercely competes with local rice production.

This rice has never disappeared from the smuggling circuits. Since 2019, its price has increased in the Nigerian market like most staples. Last month, the inflation rate hit nearly 15% in Nigeria, its highest level in three years.

Proof that Nigeria has also suffered the full brunt of the consequences of its own protectionist measure. For Idelphonse Salou, "our great eastern neighbor must now demonstrate humility and understand that it is together with its neighbors and not unilaterally that lasting solutions can be found to the problem of smuggling".