Introduction
Trade relations between states are affected by the contiguous nature of their borders, especially in countries that share multiple borders. The Nigeria–Benin Republic border covers over 700 kilometres across six Nigerian states: Lagos, Ogun, Oyo, Kwara, Niger and Kebbi (Daily Trust 2018; WTO 2017). The proximity of the borders and the close cultural ties of the people facilitate trade between the two states. The two states maintain bilateral trade, and social and cultural relations. Nigeria plays a key role in the economy of the Benin Republic. Nigeria is the most populous country and the largest market in Africa and has one of the largest economies in Africa. It is also the continent’s leading oil exporter and one of the most important economic hubs of the West African subregion (WTO 2017; OECD 2012).
Smuggling at Nigeria’s and Benin’s border has led to the loss of government revenue and the proliferation of weapons which endanger the security of lives in Nigeria (Ships & Ports 2017; Malam 2014). Several attempts in the past to address the Nigeria–Benin border challenges, through bilateral efforts, led to the establishment of bilateral commissions such as the Benin-Nigeria Joint Grand Commission and the Nigeria–Benin Joint Committee on Smuggling (WTO 2017; Business Day 2018). These efforts have not yielded significant results. This is because the nature of the politico-administrative relations and roles played by the indigenous people inhabiting both border areas (for example in Idiroko or Seme) have been neglected by both governments for too long. Yet it is apparent that the residents of these areas are often used as intermediaries in aiding and abetting the smuggling of contraband goods, safeguarding illegal smuggling routes, protecting smugglers when being pursued by customs officials and border security, facilitating illegal movements and trading illegally for personal enrichment. This is facilitated by the special advantages conferred on the residents by living on the borders and sharing similar cultures, languages and world views.
Against this background, this briefing deconstructs the prevailing rigid perception of the border as it relates to trade relations between Nigeria and Benin. The prevailing view emphasises physical boundaries and interrogates the roles played by border politico-administrative relations and socio-cultural contiguity in shaping and influencing both formal and informal trade relations. However, the border is much more than a physical demarcation since in some instances physical demarcation or a boundary may not exist in the minds of those inhabiting the borderland areas. Alternatively, it may mean little or nothing to them if they share similar cultures and economic ties. This is the case between the Yoruba-speaking people that occupy both sides of the Nigerian and the Beninese border. People often criss-cross the border and interact with their kin on either side without paying attention to the physical border demarcation.
Most literature on border relations in Africa, specifically on Nigeria and the Benin Republic (such as Oramah 2017; Adeyinka 2014; Afolayan 2013; Isyaku 2017; Golub 2015; Benjamin, Golub and Mbaye 2015; Akinyemi and Aduloju 2017; Blum 2014; Bassey and Oshita 2010; Mitaritonna, Bensassi and Jarreau 2017) concentrates on border porosity and corrupt border security and the resultant illegalities like smuggling. Concerns extend to the impact of such illegalities on trade, economic development and national security while neglecting matters of border politics such as customs duties and taxes that sometimes reshape such illegalities.
The briefing explores politico-administrative relations between Nigeria and the Benin Republic. It discusses theoretical frameworks and issues that arise around contiguous nations, territorial border politics and respective consequent bilateral trade relations between Nigeria and the Benin Republic. It raises questions about the political economy of border and trade relations between Nigeria and the Benin Republic, and the impact of border politics on Nigeria’s trade security and national economy. The final section argues for the need for a win–win border and trade relationship.
Theoretical framework
The paper adopts a Marxist political economy approach. This approach places emphasis on mode of production, economic primacy and class struggle. A major proponent of this approach was Nigerian activist and social theorist Claude Ake (1981). Marxist political economy argues, among other things, that the mode of production is the major determinant of social relations. It also underscores the synergy between politics and economy, as well as the primacy of material conditions in shaping and reshaping the actions and inactions of people. In other words, this approach argues that political and socio-economic behaviours of people are always influenced by their economic state because – as noted by Ake – even though ‘it is a biblical truth that man does not live by bread alone, it is a more fundamental truth that man cannot live without bread’ (1981, 1). These perspectives will be used below in order to demonstrate that in bilateral trade relations, each nation state pursues its economic interest and power whether it is beneficial to the interest of the other partner or not. The pursuit of these varying degrees of interest by nation-states often results in manoeuvrability and, at times, conflicts and contradictions that shape and influence international politics and relations. Onah, Asadu and Amujiri (2022) noted that issues arising from the pursuit of interest, including trade relations, must be resolved before the accrual of values (earnings) from the object of politics will be maximised by nation-states.
Contiguous nations and territorial border politics: trade relations between Nigeria and the Benin Republic
The geographical location of any given nation impacts its internal and external (trade) relations (Gottmann 1951, 154). Thus, for contiguous nations, the territorial border could be an instrument for and object of politics. This is true of Nigeria and the Republic of Benin. Over the years, their contiguous borders, common culture and Yoruba language, and the porous nature of the borders, along with weak and/or corrupt border security architecture, have reshaped trade interactions and policy action of the two states. This has resulted in a face-off between the two governments. Chaos resulted from the current border closure by the Nigerian government against importation of goods by land from Benin, when on 3 July 2020 they placed an embargo on certain goods, with a subsequent shoot-out between customs and security officials combating smugglers (Vanguard 2020). This is akin to a Hobbesian state of nature – anarchy (Hobbes 1962) that can characterise the pursuit of economic relations-cum-power at the levels of interstate relations (Onah, Aduma and Obi 2021).
Between 2014 and 2017, Nigeria and Benin signed three bilateral agreements and memorandums of understanding on border patrols, trade facilitation and anti-smuggling (Ships & Ports 2017). The bilateral action is arguably statism (protectionism, interventionism) driven by the spirit of mercantilism. These regulatory frameworks have not yielded the desired results as the Benin Republic has continued to undermine the agreement (Ships & Ports 2017; Daily Trust 2018). For instance, the two states signed an agreement on 20 June 2019 that all export vehicles from either state should be escorted and officially handed over to the customs administration of the importing country. The reason given was to enable both sides to collect appropriate government revenue. The agreement worked for about three months, after which the Benin customs officials failed to police it effectively (Ships & Ports 2017). Thus, smuggling of contraband goods from Benin into Nigeria through the porous borders continued and increased, leading to border face-offs between the two countries (Abiodun 2021). The face-off between the two countries has confirmed the assertion of Onuoha (2008) that conflict rather than cooperation and competition also shapes relations between two states. In the first half of 2018 alone, 124,407 bags of rice, 11,319 cartons of frozen chicken and turkey and over 400 vehicles were seized by the Nigerian Customs Service (NCS) at various border stations (Vanguard 2018). Most of these seizures were made at the borders between Nigeria and the Benin Republic, particularly in Seme and Idiroko areas. It is likely that larger quantities of such goods may have been smuggled into Nigeria without being caught by the Nigerian Customs.
Nigeria’s trade policy regime vis-à-vis border management has been characterised by weakness and policy somersaults. Poor trade policy and its shabby implementation pave the way for state-centric capitalism driven by unhealthy competition and border trade crime, which Pauls (2021) noted to be elements of entrepreneurial capitalism saddled with crisis and contradictions. It seems that Nigeria’s political leadership relies more on the use of physical force in containing the challenges posed by its porous borders. Over the years, it has relied on the use of the NCS and other security agencies to contain smuggling along its borders with Benin. Yet such reliance and deployment of physical force have proved unproductive in combating smuggling, as is evident in the increasing border challenge. It has also used and still uses trade policies such as high tariffs and sometimes an outright ban on the import of certain goods through the land border. For example, in 2015, the Nigerian government banned the importation of rice through its land borders (WTO 2017). Table 1 sets out a list of products over an 18-year period, noting where imports to Nigeria were either banned or had a significant import tariff levied on them. Customs and security agencies were deployed to monitor, implement and enforce the border seeking to prevent smuggling.
Nigerian taxation policy on imports of selected products across land borders (1995–2013, tariff rates in percentage).
| Product description | 1995 | 2001 | 2007 | 2013 |
|---|---|---|---|---|
| Beer | Banned | 100 | Banned | Banned |
| Cloth and apparel | Banned | 55 | Banned | Banned |
| Poultry meat | Banned | 75 | Banned | Banned |
| Rice | 100 | 75 | 50 | 100 |
| Sugar | 10 | 40 | 50 | 60 |
| Tobacco and cigarettes | 90 | 80 | 50 | 50 |
| Used cars | Banned | Banned | Banned | Banned |
| Used tyres | Banned | Banned | Banned | Banned |
| Vegetable oil | Banned | 40 | Banned | Banned |
| Wheat dough | Banned | Banned | Banned | 65 |
The top three types of goods smuggled into Nigeria through Benin are rice, poultry products like frozen chicken and turkey, and vehicles (Golub 2012; Golub, Mbaye and Igue 2019) in addition to flour, wheat and pasta. These goods are not produced in the Benin Republic. Rather, they are imported from Asia, Europe and America into Benin. From there, they are re-exported or smuggled into Nigeria, thereby deepening the mutual dependence of the Nigerian and Benin Republic economies. These countries are dumping grounds for goods produced by foreign multinational corporations (MNCs) that target an African, and especially Nigerian, market. This is affirmed by a report by the Nigeria Export Processing Zones Authority (Adeniyi 2019) that goods valued at N1.45 trillion are smuggled annually from Benin into Nigeria. It also pinpoints that the land border closure by President Muhammadu Buhari since 2015 (WTO 2017) aligns with how previous regimes in Nigeria managed politico-administrative border affairs. Yet, there have been few significant results achieved in terms of boosting revenue from customs duties and strengthening border security to curtail smuggling and sabotage. Meanwhile, for goods that are cheaper in Nigeria due to government subsidies, the government of Benin arguably encourages the smuggling into Benin, where it is cheaper to purchase through the parallel market (ibid.).
The political economy of border and trade relations
There are many different actors in the border politics between Nigeria and the Benin Republic, and they have contrasting interests. The first set of actors is the governments of Nigeria and the Benin Republic. Each of the states has particular needs, hence each government pursues different economic interests. The Nigerian government wants to protect local industries (especially in the agriculture, textile and automobile sectors) against competition from cheap products smuggled through the borders. It uses trade policies and high tariff imposition to pursue this interest, though such measures have not been 100% effective because of their poor implementation. On the other hand, the government of Benin wants to increase tax revenues from port charges on goods imported through its seaports for onward export or smuggling into Nigeria. It pursues this interest through a low-tariff regime and efficient port operations as well as encouraging smuggling and dumping of goods into the Nigerian market via the land borders. Benin also wants to benefit from the low price of goods, such as fuel, subsidised in Nigeria, hence it engages in the black market (Golub 2012). See Table 2 for clarifications on goods smuggled into both countries, and who benefits more from illicit trade.
Goods smuggled between the Benin Republic and Nigeria (1998–2010).
| Description of goods | Country/continent of origin | Transit country | Recipient country |
|---|---|---|---|
| Benin Republic to Nigeria | |||
| Small and light weapons (SALW) | Russia, USA, China, Europe | Benin | Nigeria |
| Rice | India, Thailand, Europe | Benin | Nigeria |
| Used tyres | China, Europe | Benin | Nigeria |
| Vehicles | USA, Europe | Benin | Nigeria |
| Poultry products | Benin, China, Europe | Benin | Nigeria |
| Flour, wheat, pasta | Asia, Europe | Benin | Nigeria |
| Nigeria to Benin Republic | |||
| Fuel | Nigeria | - | Benin |
| Cocoa | Nigeria | Benin | Europe, Asia, USA |
| Palm oil | Nigeria | - | Benin, Asia, Europe |
Importers and shipping companies are another set of players in the border politics in Nigeria–Benin trade relations. Trade success and profitability for corporate interests are shaped, according to the World Bank, by ‘low transport costs and easy access to quality [service] inputs’ (World Bank 2011, v). The Benin Republic’s port facilities are seen to be more efficient than those of the Nigerian competition. Benin ports enjoy higher patronage from importers and shipping companies who then re-export or smuggle the goods to Nigeria through the borders (Ships & Ports 2017).
Foreign governments from outside the continent, such as Thailand, China, India and Russia, are also important actors. While Thailand and India are known to be sources of the various brands of foreign rice being smuggled into Nigeria, China accounts for most of the contraband and substandard products (Nkamnebe, Onyedinma Ezenweke and Anionwu 2009). Russia is among the major sources of arms and ammunition (OECD/SWAC 2001; Vanguard 2018; Benjamin, Golub and Mbaye 2015). These countries earn foreign exchange from exporting such goods and sometimes they trade the goods through the ‘parallel’ market or informal channels. In this way, these foreign governments avoid the various taxes and also government security scrutiny. The influence of foreign governments makes the economies of both countries structurally dependent on external forces and goods. This is the result of neoliberal economic market forces controlled by MNCs from Europe, the USA and Asia that dominate domestic industry provision.
Lenshie, Joshua and Ezeibe (2021) observed that the prevailing ideology of globalisation and the practice of neoliberalism drives a rhetoric of market-oriented forces and reduction of trade obstacles: the consequences for Africa have been dire. Ezeibe et al. (2020) and Ugwueze, Ezeibe and Onuoha (2020) observed that neoliberalism – with MNCs operating through global capitalism, and inherent overriding influence on the economies of domestic firms – is destructive and has made local firms in Africa vulnerable to external competition. It has also shrunk the regulatory powers and functions of the state. The vulnerability of African firms in the face of foreign MNCs revolves on neoliberalism.
The impact of border politics on Nigeria’s trade security and national economy
The impact of border politics in contiguous states could be either positive or negative depending on, for example, how well the states use their borders strategically. Among the negative impact of Nigeria’s inability to use its land borders strategically is the loss of government revenue (Ships & Ports 2017). Tax on goods imported into Nigeria or exported from Nigeria to other countries is one of the major sources of government revenues. But because of the violations in the bilateral trade agreements between Nigeria and the Benin Republic, most goods pass through the informal channels making use of the porous borders. Such trade is often not recorded and taxed, as a result of the political and business elite’s connivance with customs authorities and border security, who undermine government revenue generation policies due to the huge amounts of illegal money they make through smuggling, whereas mostly only petty or medium businesses pay customs duties and are taxed at borders accordingly (see Benjamin, Golub and Mbaye 2015; Ships & Ports 2017; Mitaritonna, Bensassi and Jarreau 2017).
Formal bilateral trade between Nigeria and the Benin Republic has increased, yet there is a general problem in Africa where trade among African states has continued to experience uniform challenges partly because most states on the continent produce similar goods which are mainly cash crops. Thus, the volumes of exports on the continent are very low.
It can be extrapolated from Table 3 that intra-African export indices for Nigeria and Benin show a low volume of trade. Their official bilateral trade levels are low. Given the huge traffic of goods that transit through Nigeria’s various porous borders with the Benin Republic, one can argue that most of the trade between Nigeria and Benin passed through the informal channels. Most of those who engage in informal trade do not have the necessary documents such as the Economic Community of West African States (ECOWAS) passport and travel certificate, but they are usually able to pass through the borders by bribing the border security (Ibeanu 2007). If the value of all the informal trade were to be captured, it is very likely that official bilateral trade would increase.
Export concentration indices in Nigeria and the Benin Republic.
| Country | 1995 | 2000 | 2005 | 2010 | 2016 |
| Nigeria | 0.85 | 0.92 | 0.88 | 0.80 | 0.73 |
| Benin | 0.67 | 0.59 | 0.40 | 0.33 | 0.31 |
Source: Adapted from African Export-Import Bank (2018).
The Benin Republic exports more goods to Nigeria despite its relative disadvantage in terms of small population and natural resources when compared with Nigeria’s large population and rich natural resources.
Table 4 indicates that Benin is exporting more goods to Nigeria than Nigeria to Benin, despite Nigeria’s population, landmass, GDP and economy when compared with those of Benin. In the official bilateral trade records, the Benin Republic enjoys surplus trade and a favourable balance of payments, while Nigeria has both a trade deficit and an unfavourable balance of payments. For example, in 2010, the value of exports from the Benin Republic to Nigeria stood at US$42.3 million while the value of Nigeria’s exports to Benin for the corresponding period was US$4.2 million, resulting in a trade deficit of US$40.1 million for Nigeria. Even though the value of Benin Republic exports to Nigeria declined in 2016 to US$6.6 million, Nigeria’s exports to Benin for the same period were valued at US$1.5 million: there was still a deficit of US$5.1 million. In terms of quantity, the ratio of Benin Republic’s exports to Nigeria’s is 5:1. In other words, for every single item that Nigeria exports to Benin, Benin exports five items to Nigeria in return (Mitaritonna, Bensassi and Jarreau 2017).
A win–win approach to border and trade relations?
International trade is often seen to operate as a zero-sum game where exported goods represent a ‘win’ and imported goods represent a ‘loss’ for the economy. Yet there is, arguably, always some benefit for both winners and losers in trade among nations (Wolla and Esenther 2017). In the politics of international trade, nation-states tend to pursue interests that are self-seeking. The good of their national economies, and those within them, are shaped by the balance of class forces and the beneficiaries of contemporary capitalism (ibid.). Is it possible under these circumstances to manage the pursuit of competing capitalist interests in such a way that each state could be a winner? It is this idea of managing differing interests to ensure a win–win situation that gave rise to the principle of mutuality and collective bargaining in bilateral and multilateral trade. A win–win for both states does not mean equal benefits for each state, but it does mean that each state benefits from something tangible at least. It is in that sense that border and trade relations between Nigeria and the Benin Republic could be managed to ensure more mutual benefits for both states.
The two states have made important and mutually beneficial commitments, particularly in the areas of trade and cross-border security (WTO 2017). There have been efforts by the government of Nigeria to address challenges posed by the border on its bilateral trade with the Benin Republic. Apart from entering into bilateral agreements with the Benin Republic, the Nigerian government has also signed memorandums of understanding with the Beninese government on trade promotion and smuggling prohibition (Ships & Ports 2017; WTO 2017; Business Day 2018). The latest measure was the establishment of the Nigerian Office for Trade Negotiations in May 2017. Nigeria is playing catch-up through policies, reforms and collaborations to strategically reposition its trade relations with Benin in order to boost benefits from trade.
Conclusion
The paper submits that border porosity, the ECOWAS Protocol on Free Movement of People and Goods and weak/corrupt border security are negatively affecting trade relations between Nigeria and the Benin Republic. But border politics is another salient factor whose impact on bilateral trade is even more dire. Although the porous nature of the borders and corrupt border security make Nigeria vulnerable to smuggling of goods through Benin, it is border politics that triggers or creates the conditions that initially encourage border smuggling. The economically dependent set-up of the two neighbouring countries has been exacerbated by poor domestic policies driven by the corrupt ruling elite. That elite has discouraged productive homeland economic activities and encouraged foreign MNCs and governments to use their countries as dumping grounds. Benin has been used as a willing gateway and conduit in this activity against Nigeria.
The failure of the Nigerian government to maximise the potential inherent in border politics has made its borders more vulnerable to cross-border smuggling and illicit trade. This has added to further negative effects, among which are trade insecurity, poor bilateral trade revenue and trans-border crimes. This briefing asks the question of whether it is possible for the governing and economic elites to shun self-serving promotion of foreign goods. Under what conditions would this be possible, what kind of state would be necessary to facilitate it, and in whose ultimate interest would it be? This briefing highlights elements of radical political economy that emphasise the pursuit of power and economic dominance by nation-states in shaping bilateral relations. The political and business elites of the two economies sacrifice national interest for personal gain, paving the way for corruption and smuggling at the borders, which lead to the underdevelopment of the two economies.