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NIGERIA/NIGER TRANSIT TRADE: ANY FUTURE?

 

NIGERIA/NIGER TRANSIT TRADE: ANY FUTURE?

Bashir and Hassan Bello

Over the years, the Nigeria-Niger Joint Commission (NNJC) has been at the forefront of championing the course for landlocked Niger Republic cargoes to transit through Nigerian Ports, in an attempt to boost the economy of the Republic of Niger in line with the Almaty Programme of Action, APoA, now Vienna Programme of Action, VPoA for Landlocked countries and transit countries working toward the achievement of the Millennium Development Goals, MDGs.

Hence, the workshop held by key stakeholders and participants from both countries in Abuja recently, could not have come at a better time. Indeed, it is the icing on the cake of a long-drawn bilateral trade talk between both countries.

But even as the excitement is on about the prospects of a viable Niger/Niger Transit Trade deal, some thoughts must be spared to take into cognizance the United Nations’ Council for Trade and Development, UNCTAD, technical overview of the objectives and challenges of international trade. This would go a long way in creating further understanding of the nature of transit trade vis-à-vis the role of ports, customs and transportation system required for a seamless international trade and cooperation.

UNCTAD defines Trade Facilitation as the “Transparency and efficiency in International Trade supply chain through Simplification, Standardization, Harmonization and Modernization.” It is also “An ongoing and multi-agency function” that’s “better achieved through collaboration between the public and private sector.”

For there to be effective Trade Facilitation, certain principles would need to come to play. These are: Reduction and Alignment of the process of International Trade, Common Procedures and Documentation, Efficient IT use; Clear, Specific and Easily Accessible Information for all involved; and of course, Legislation, Regulation and Administrative procedures that could often times become a snag in the process of effective transit trade.

An effective international and trade also encourages and indeed thrives on the use of technology in such aspects as Containerization, Shipping Networks, Shipping lines, Airlines, Airports, as well as on Transit Operations to eliminate the bottlenecks that undermines transit trade.

Barriers that could hinder transit trade for Landlocked Developing Countries (LLDCs) are distances to and from overseas market, border crossing, delays and cost, and also the dependence on neighbours’ infrastructure and services, such as road and rail systems, inland freight stations and port facilities.

Taking goods in transit from Lome to Ouagadougou as a case study, according to the world banks, services in cost is about 15% the transit cost, excesses charges and unnecessary public services add another 14%, unnecessary private services add up another 16% and bribes for passage of goods incur another 28%, bringing it up to 73% on the cost of transit.

WTO TFA adopted a number of measures aimed at specifically addressing transit, such as guaranteed systems, choice of route, fast tracking of transit traffic and removal of transit fees to ease transit trade, while some proposed measures relevant to transit are risk assessment, automation, time limit for customs release, cooperation between traders and customs authorities and a single-window facility for both clearance and release of cargoes.

Corridor arrangements agreements, harmonized border procedure, customs transit arrangements and bilateral/regional/multilateral transit agreement are other facilitation measures that have been ratified into the WTO TFA.

Although the need for there to be an unhindered transit trade has been emphasized previously at several WTO forums (freedom of transit, non-discriminatory treatment, no delays or restriction, no excessive or unlawful levies, etc), it by no means presupposes that no level of control may be exercised by transit nations. Indeed, the Barcelona Statute on Freedom of Transit reiterates that: “Sovereign States shall in no way be infringed to protect their legitimate interests, i.e. there is a right for the transit State to set requirements for granting access or transit rights.”

The Barcelona statute further states: “Transit can be regulated or restricted by terms and modalities set by the transit State”, adding that, “transit conditions, in general, are subject to bi-or multilateral negotiations.”

Thus, as a platform for successful engagement in International Trade, the Doctrine of Negotiation is vital.  Annex ‘D’ of the WTO General Council decision reached on August 1, 2004, sets out modalities for a healthy negotiation in International trade. The established modalities are to clarify and improve the GATT Articles V, VIII and X, which are to reduce transaction costs of trade. Others are “special and capacity building in developing countries and LLDCs,” and also to increase cooperation amongst Customs authority of member nations.

The WTO TFA also provides an avenue for further understanding through the International legal instruments and international trade standards as a means of strengthening ties among nations involved in transit trade deals. This instrument is open to all UN member states and can be used as the basis for regional or bilateral cooperation. The only concern would be in the preparedness and capacity to implement its provisions.

However, some stakeholders both from within and outside Nigeria worry about the proposed transit trade negotiation that is ongoing between Nigeria and her landlocked neighbours. The premise for such concerns is not farfetched, as over time Nigeria has suffered criticisms over the inefficiency of a number of its political leaders and relevant agencies. Some say opening a transit trade route between Nigerian and her West African neighbours is more a question of integrity and competence, than of necessity.

The opinion is that Nigeria, given her status and geographical location in the region, should have had no problem opening a strong transit route for landlocked countries in West Africa, in a continent where other regions in East and Southern African already have functional transit corridors.

According to the Permanent-Secretary of the Ministry of Transport of Nigeria, Mr. Mohammed Sambo Bashar, “In the West and Central African sub region, freight movement along the main transit corridors is hindered by physical and non-physical bottlenecks, which cause transport costs to be high, thus adversely affecting export competitiveness and posing formidable obstacles to the import of essential capital goods, food and fuels.”

However, in spite of the hiccups to transit trade in mind notwithstanding, it is noteworthy to mention that the gains by far overwhelms the challenges, as a viable transit trade would boost the economy of such landlocked countries like Niger, Chad, Mali and Burkina Faso, whilst also improving the GDP of the transit State, like Nigeria.

The workshop may have come and gone, and far-reaching decisions and resolutions may have been made. It is the implementation of mutual decisions agreed upon at the workshop, that the global community waits to see.

Some of such agreements reached by participants, as contained in a communiqué released at the end of the workshop includes; “the need for aggressive sensitization of cargo owners and other stakeholders because the programmes are largely not known to LLDCs including Niger Republic and the need to have the political will and commence walking the talk on identified solutions to bring back Niger-bound cargo to Nigerian ports for the benefits of both national economies.”

Other resolutions agreed upon are: “The need for establishing/strengthening bilateral, multilateral and regional transit transport agreements to facilitate international trade along the transit corridors between the coastal states and LLDCs,” as well as the “establishing of joint border posts to ensure security and safety of lives, goods and services.”

The urgent need for Nigeria to provide a “truck transit park along the Lagos-Ibadan expressway in addition to the sites already proposed by Nigerian Shippers’ Council to accommodate the truckers that would be carrying cargo without which the Niger Economic Operators will not patronize Nigerian ports” was also addressed.

According to UNCTAD, “it’s a win-win situation for countries involved in transit trade.” Transit trade has been known to upgrade standards of living of the poor and middle class in transit countries as it boosts rise in induced-economic activities like restaurants and hotels, repairs and workshop, and also creates opportunities for investment in warehousing, vehicles and ports.

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