Home / PERISCOPE / Nigeria’s Transit Deal With Landlocked Neighbours: Any Future?

Nigeria’s Transit Deal With Landlocked Neighbours: Any Future?

Nigeria’s Transit Deal With Landlocked Neighbours: Any Future?With the widening scope and volume of international trade and the requirement by countries to enhance their economic well-being and GDP, there is no better time than now for the bottlenecks that hampers the free-flow of bilateral and multilateral trade agreements among nations to be tackled head on. Hence, the basis for key stakeholders from Nigeria and her Northern neighbor, the Republic of Niger, to meet with a view of strengthening bilateral ties with both countries and to iron out modalities for a robust transit trade agreement in which Nigeria opens her corridor to Niger-bound merchandise.

Transit trade is germane to the economic viability of most countries, particularly countries that are hemmed in and surrounded by land, like Niger and Chad, etc. The costs and trade difficulties faced by many landlocked countries are daunting, from the time it would take to move goods from other countries’ port, to high tariff and charges and high inflation margin.  According to available records, “It costs 5 times more to transport a 20ft container from Tema to Quagadougou (1,040km) as compared to moving same from Newark to Chicago (1, 030km).”

But in line with living up to its responsibility as an active member and signatory to the World Trade Organization’s (WTO) agreement on transit trade facilitation, and alleviating the challenges faced by Niger in international trade, Nigeria is opening up its seaports for access to Niger.

This, however, is not a new development. In fact, trade relationship between Nigeria and Niger go all the way back to 1971, when the Nigeria-Niger Joint Commission for Cooperation (NNJC) was set up. And even before then, both countries had built a formidable tie that transcended the frontiers of commerce. It goes without saying therefore, that establishing a workable transit trade agreement with Nigeria stands to boost the slow economy of Niger, in line with the Vienna Programme of Action for Landlocked Countries and also for the transit countries, like Nigeria, working towards the achievement of the Millennium Development Goals (MDGs).

The workshop, which was jointly organized by the Federal Government through the Federal Ministry of Transport, the Nigerian Shippers’ Council (NSC), the Nigerian Ports Authority (NPA) and the Nigerian Maritime and Safety Agency (NIMASA), held penultimate week at the prestigious NICON Luxury Hotel, Abuja, with the theme: “Promoting Transit Trade For Greater Economic Integration of Landlocked Countries: The Case of Nigeria/Niger,” had in attendance dignitaries and representatives from relevant government organizations and agencies from both Nigeria and Niger, as well as from ECOWAS and the United Nations Conference on Trade and Development (UNCTAD).

In the keynote address, the Head of the Civil Service of the Federal Republic of Nigeria, Mr. Danladi Kifasi, had reiterated that building a robust transit-trade corridor was not only critical to the economy of Niger, but would also be beneficial by boosting the GDP of Nigeria in the long run.

Mr. Kifasi, represented by the Permanent-Secretary of the Career Management Office in the Civil Service, Ambassador Danjuma Shemi, thus pointed out the urgent need for Niger’s Economic Operators to return to Nigerian ports for the shipment of their goods, even as he decried the shoddy handling of transit trade by some government and agency officials, often as a result of their poor understanding or deliberate attempt at undermining the importance of transit trade.

“Many people,” he said, “including regulatory agencies often lack the needed understanding to properly situate the transactions and procedures involved in handling the trade.” He added that, “officials of such agencies therefore, inadvertently hinder the trade instead of facilitating it.”

Also speaking at the occasion was the Permanent-Secretary of the Ministry of Transport of Nigeria, Mr. Mohammed Sambo Bashar. He noted that landlocked countries like Niger are constrained in their drive to effectively participate in international trade as they often have to depend on coastal States for the movement of their merchandise, thereby facing an array of besetting administrative, technical and logistical snags.

Towing the line of the Danladi Kifasi, Mr. Bashar asserted that beyond the euphoria and excitement of a transit deal being reached, ironing out modalities for the effective implementation of such agreement was as important as the agreement itself, noting that the practical implementation of transit trade agreements as is presently available leaves room for improvement.

His words: “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.”

Dealing with these bottlenecks therefore, is the main task of all relevant parties putting together this transit trade deal, to forestall any collapse of the system before it even takes off.

On his part and in line with the flow of the workshop, the Executive-Secretary and CEO of the Nigerian Shippers’ Council, Mr. Hassan Bello who gave the welcome address, observed that the status of Niger Republic as a landlocked country has over the years hampered its economic aspirations as direct access to the sea is the way by which 90% of global trade is moved.

Fortunately, Nigeria is open to several waterways and has viable seaports; hence Niger and other neighbouring landlocked nations could have their merchandise delivered through Nigerian corridors under a robust transit-trade agreement, which may be lacking at the moment.

According to Bello, the Nigerian transit corridor had been the primary access to the sea for Niger and Chadian Economic Operations before some challenges emanated in 1996 and later in 2006 when the Olusegun Obasanjo-led government privatized Nigerian ports with no special provisions or considerations for transit goods, as was the case under public operations of the ports.

He affirmed that Nigeria, being a coastal State, has obligations to her landlocked neighbours under international conventions and agreements to facilitate their access to international trade for their socio-economic development and growth.

Speaking further, Bello said that an efficient transit trade system would also portend major economic benefits for Nigeria as the increased use of the Nigerian corridor for movement of transit goods belonging to landlocked countries would impact well on the countries revenue and create efficiency within the transport system.

“Moving transit cargo through our ports will help achieve economies of scale and attract more transport operators,” he said, which would in turn lead to a “favourable cycle in which higher trade volumes will drive more efficient transport operation…”

However, before we get to the point of establishing a viable transit trade corridor with Niger or any landlocked nation, a number of germane considerations must come to bare vis-à-vis fundamental transit policy issues, infrastructure development and trade facilitation through inter-ministerial and inter-agency collaborations, as well as public private partnership concerns.

The principle of multilateral trade transactions amongst nations as highlighted by the WTO in its ‘Bali Package’ is key to the subject of transit trade. The overall aim of that Package is to help governments “improve their border procedures, reduce trade costs, boost trade flow and reap greater benefits from international trade by simplifying customs procedures and reducing inefficiencies that create delays in cross-border trade…”

Bearing these in mind, the urgent need for government of both countries (Nigeria and Niger) to enhance the efficiency of their relevant trade, transport and commerce agencies cannot be over-emphasized. The Nigerian government especially, could do more to thrash out the discrepancies that organizations like the police and customs are known for, both home and abroad.

Perhaps the clean-up of these organizations should be given an immediate priority before we proceed to open up our corridors to Niger and any other country interested in accessing our ports. It is said that a king does not invite important guests into his palace when he is still in his underpants, else his bottom would be seen and the word would go round.

Now is certainly not the time for officials of these agencies to make brisk money under unscrupulous circumstances, thereby dragging the name of the country through in dirt.

In effect and as mandated by the WTO, member countries involved in bilateral and transit trade must strive to improve transparency, standardize documentation procedures in order to eliminate corporate inefficiency, boost trade turnover and gain international accolade.

It is in pursuance of this that government, in the words of Hassan Bello, is stepping up efforts to create a “conducive business climate aimed at attracting FDI, rehabilitating infrastructures and addressing issues like security and corruption” in its drive to facilitate transit trade.

Searchlight would also need to be beamed on the issue of security and cross-border terror that countries around the Lake Chad Basin are presently combating. It would appear that no one is talking about the impact that ongoing terrorists activity would have on transit trade. Indeed, it may not yet be ‘uhuru’ for any transit trade agreement that has or may be reached in the future.

We have too much on our plates already as we grapple with corporate inefficiency on our hand and trying to keep our already porous borders safe on the other hand. Would establishing an open trade route for other nations not expose our weakness? Could a transit trade deal just be what terrorist elements need to infiltrate other parts of Nigeria to extend the scope of their dastardly operations beyond the north-east?

In spite of the combined military offensive against Boko Haram, the militant sect seem to have a way of bouncing back and wrecking havoc both on civilian population and military personnel. Some are therefore of the opinion that no tangible or sensible trade agreements can be reached between Nigeria and any of her neighbouring countries, unless terrorism is first stamped out.

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