Mohammed Tumala

INFORMAL CROSS BORDER TRADE NIGERIA – 2013/14 ESSD – CBN – Mohammed Tumala

Discussion Outline

1

Motivation and Objective

2

Approach and Findings

3

What Next?

Motivation 1

2

3

3

Sub-Saharan Trade still

ECOWAS Group

Border

BOP Reporting

active

finds growing

Communities

with Current

trade volume

dependent on

account data

The trade tradition has continued. The ECOWAS is also promoting free movement of persons, goods, services, and capital within the sub-region.

The bulk of the transactions on duty free goods are not of primary concern to the customs authority and therefore

ECOWAS-WAMA (integration) established a BOP compilation Harmonization Group which found that "goods traded with immediate neighbours that are transported by road and relevant to inter ECOWAS trade goes largely unrecorded because much of it does not

trade

gaps

These communities are

Nigeria has over 2500

inhabited by peasants, herders,

miles of land border with

and informal/micro business

four countries (Cameron,

operators involved in staple

Chad, Niger, and Benin

foods exchange which goes

Republic). ECOWAS Group

mainly unrecorded by the

observed growing volume

customs authority.

of trade with no corresponding data.

Objectives 2

1 BOP Objective

Knowledge of Items of Trade

The Statistics Department of the Central

Identify the category of

Bank of Nigeria compiles the BOP for Nigeria,

commodities of trade and how

and the ICBT study was undertaken to close

these are ferried across the

data gap in the current account. Specifically

borders.

to Estimate quarterly value of informal/unrecorded trade between Nigeria

Approac h Step One

Step Two

Step Three

Reconnaissance visits to border

Data collection: 7 days

Data processing: cleaning,

communities, selection of sixteen

(continuous) in each month of

analysis, report writing.

(16) active border sites between

June 2013 to May 2014. The

Stakeholder engagement and

Cameroon, Benin Republic, and

starting dates in each month

report dissemination. It should be

Niger. Identification of monitors.

were randomly selected.

noted that stakeholders were

Some borders in the northeast of the

Paying attention to: Units and

engaged from conception to

country (mainly with Chad and

Prices! Monthly visits to sites to

dissemination. Aa Inter Agency

Cameroun) were excluded in view of

monitor and retrieve records

Technical Group coordinates the

the active insurgents’ activities in those locations.

2013

BOP compilation and data

2013/14

harmonization.

2014/2015

Findings – Total trade – N1,090.89 billion ($6.91 billion) 1,200.00

Total trade was N1,091 billion or $6.91 billion

1,000.00

N825.74 billion or 75.7% on Food

800.00

N557.68 of N825.74 billion on Food within ECOWAS Region N139.37 is non-food

600.00

400.00

200.00

-

To tal Trade

Import

Export

Veg. & Animal Prod. & Food stuffs

ECOWAS - Veg. ... & Food stuffs

Findings – Total Exports – N435.28 billion ($2.76 billion) N435.28 Billion Exports

N33.31

74.31

327.66 Cameron

Benin Republic

Niger

Findings – Total Imports – N655.61 billion ($4.15 billion) N655.61 Billion

Imports

N59.54

94.96

501.12

Cameron

Benin Republic

Niger

Findings – merchandise trade estimates

Quarter

2013:Q3

2013:Q4

2014:Q1

2014:Q2

Total Export (N'Millions)

49,069.42

249,861.90

78,714.52

57,632.23

Total Imports (N'Millions)

169,968.66

140,915.72

138,144.34

206,583.78

Findings –items of trade Total Trade in N'Billions Product Category Vegetable Products Animal and Animal Products Transportation Equipment Foodstuff Textile Products Machinery and Equipment Chemical and Allied Products Mineral Products Raw Hides, Skins and Leather Wood and Wood Products Plastic and Rubber Products Metal Products Footwear and Headgear Miscellaneous Products Stone and Glass Total

Exports 295,710.60 4,008.83 684.58 32,450.78 28,165.60 24,759.32 13,536.72 18,070.00 303.54 7,781.69 2,787.73 3,302.36 1,621.53 1,701.39 393.42 435,278.09

Imports 322,560.75 133,898.70 92,637.43 37,109.80 18,741.41 11,620.16 21,104.88 2,285.28 9,437.86 360.94 4,664.99 176.17 661.34 341.05 11.76 655,612.52

Total Trade 618,271.34 137,907.53 93,322.01 69,560.58 46,907.01 36,379.47 34,641.61 20,355.28 9,741.39 8,142.62 7,452.72 3,478.54 2,282.87 2,042.44 405.18 1,090,890.59

Share in Total 56.7 12.6 8.6 6.4 4.3 3.3 3.2 1.9 0.9 0.8 0.7 0.3 0.2 0.2 0.0 100.0

Findings – Every food item in the market were traded Live animal & products (goats, sheep, cows, camels, chickens, eggs, meat, etc.); Grains (millet, maize, sorghum, rice, wheat); Beans; Sesame Seeds; Vegetables (veg. leaves; onions, Moringa leaves, Cabbage, potatoes, tomatoes, etc.); Yam/cassava & flour; Cooking Oil; Sugar; Fruits (Dates, oranges, banana, Plantain, apples, pineapple, etc.), Kolanuts, Bread; Fish; Groundnuts; Soya Beans; Beverages; Tiger Nut; Garlic; Semovita; Spaghetti; Ginger; Noodles; Cotton Seed, bread; Sugarcane, Pumpkin, Cashew Nuts; Cheese Balls; Coconut, Tea; Shear Nut; Cocoyam; Herbal Products; Watermelon; Ice block, Water; Grasshopper, Tobacco leaf;

Way Forward – Policy Developments 1. This study was not repeated because of insecurity. Niger Republic showed interest in collaboration in future studies.

2. BOP compilers monitored the importation of key food items by neighboring countries against their food demand. Substantial part of these imports ended up in the Nigerian markets. This had informed trade policy actions by Nigeria.

3. Promotion of local production of Rice and Maize in Nigeria – 2015 - 2017 recorded substantial growth in rice importation to Nigeria mainly through the Benin/Niger borders. This affected local production.

Way Forward – Policy Developments 4.

In 2019 Afreximbank funded UNECA to conduct a one-year pilot project to collect data on ICBT along the Abidjan-Lagos corridor of West Africa as part of the implementation of AfCFTA. The project was conceived to provide a framework for a national, regional and continental policy by identifying the scale, magnitude and characteristics of informal cross-border trade in the continent.

5.

The Continental Methodology for ICBT Data Collection in Africa has been developed by the African Union Commission following this project and the decision of the third AU Extra-Ordinary Special Technical Committee on Finance, Monetary Affairs, Economic Planning, and Integration.

6.

Nigeria participated in the finalization of the ICBT draft report which included institutional arrangements for ICBT. Future ICBT data collection will follow the methodology to be issued by the AU.

THANK YOU