Border closure: LCCI laments supply chain disruption, losses

Muda Yusuf

PHOTO CREDIT: SHIPS & PORTS

 

The Lagos Chamber of Commerce and Industry (LCCI) has raised concerns over the losses and supply chain disruption suffered by genuine business entrepreneurs since the closure of the nation’s land border for close to two months.

LCCI Director General, Muda Yusuf, in a statement made available to SHIPS & PORTS  in Lagos on Tuesday, said while some benefits have been recorded in suppressing smuggling, the losses that businesses and individuals have suffered as a result of the border closure poses a dilemma.

According to him, “The closure of Nigerian land borders for close to two months now has come with benefits and costs. There are upsides and downsides. Reports indicate a drastic reduction in smuggling of rice, poultry products and sugar. The smuggling of petroleum products outside the country to neighboring countries has also declined considerably.  We note and appreciate these outcomes.

“But it is important to reckon with the costs, supply chain disruptions and loses that business and individuals have suffered as a result of the closure. Corporates, large number of informal sector players and individuals doing legitimate businesses across the borders have become victims of the border closure.  This poses a dilemma. The government means well, but there are many innocent casualties.

“As we celebrate the benefits, we should also count the costs.  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 sub-region.

“The economies of border communities have been paralyzed with consequences for unemployment and poverty. Over 90 percent 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, and onions, among others. We also undertake many re-export to the sub-region.

“These are sources of livelihood of Nigerians doing legitimate businesses. There are also thousands of transporters who make a living from these legitimate trading activities. These are costs that would run into hundreds of billions of naira. We must weigh the costs and benefits. Most often we do not count the cost of government policy on the citizens and businesses.

“We should not underestimate the contribution of trade and commerce to the economy of the country. Distributive trade sector accounts for about 15% of the nation’s GDP, which is estimated at N20 trillion. Traders play a major role in the value chain of the real sector activities in the economy. The trade sector is perhaps the largest employer of labor in the Nigerian economy.”

The LCCI Director General noted that this was not to diminish the importance of security in the border management process as neighboring countries have been sabotaging government efforts to curb smuggling and check insecurity.

He however noted that it is the responsibility of the government to manage the situation and deploy appropriate responses.

He said that until the government fixes the structural, institutional and policy shortcomings that perpetuate the phenomenon of smuggling and increases vulnerabilities, it would be difficult to put an end to the menace.