Is Benin Republic sabotaging Nigeria economy?

Palm oil
Palm oil

Recent reports that the Republic of Benin may have been engaging in certain international trade practices that are harmful to the Nigerian economy particularly as it has to do with palm oil import and export should be of huge concern. Without wasting time, the Federal Government of Nigeria must take serious steps, either by sanction or stern warning, to deter Benin from continuing in this path of curious sabotage.
Local palm oil producers in Nigeria raised alarm, accusing the Republic of Benin of leading a ring of illegal importation of that commodity into Nigeria via the criminal process of taking more palm oil than it needs from Malaysia and then dumping the inordinate surplus in the Nigerian market, all this under the cover of a trade agreement, which significantly reduces importation duty on products originating from within ECOWAS jurisdiction. Ghana, Cote D’Ivoire, and Togo have also been named in this alleged re-exportation crime.

Normally, according to the ECOWAS Common External Tariff (CET), which standardises the tariff treatment of goods entering the economic community of West Africa, the duty payable on import of palm oil, a category-3 (final consumption) product, from a non-ECOWAS state is a maximum of 35 per cent. However, if originating from an ECOWAS state, import duties may go as low as 20 per cent for the same category of product, and zero per cent for so-called category-0 (essential social goods such as medicine) products. The accusation now is that the Republic of Benin and its alleged accomplice countries are pushing their excess palm oil imports from Malaysia into Nigeria, while pretending that these exports originate from within their own countries, thereby evading the 35 per cent duty payable on the product.

Quoted numbers appear to give credence to this allegation. In 2018, palm oil consumption in Benin was reported at 135,000 tonnes while its production in the same year was pegged at 60,000. However, rather than importing its consumption deficit of 75,000 tonnes, that country’s import of palm oil in 2018 goes up to a staggering 640,000. This, of course, begs the question of what the Republic of Benin did with its eventual palm oil surplus of 550,000 tonnes. The answer of the Nigerian local producers is that this egregious excess is exported into Nigeria at the expense of the latter’s economic advantage. And, to lesser degrees, the same number-based allegations are levelled against Ghana, Cote D’Ivoire, and Togo.

These are very serious allegations that the Federal Government of Nigeria must look into with seriousness it deserves. For it comes down, in the final analysis, to the question of whether or not Nigeria can trust the neighbours, which it lives and trades with. And it will be a horrible travesty of trust, fairness, and justice if these nations, for which Nigeria has stood in many ways and times as a pillar of support, have been engaged in such nefarious activities of economic sabotage against Nigeria as alleged.

Mr. Fatai Abiodun, the Executive Secretary of the Plantation Owners Forum of Nigeria (POWON), could not be more correct when he commented on the issue. According to him, “Given the brotherly role Nigerian plays in supporting the economies of its neighbours, they cannot be subverting its [Nigeria’s] economy and still expect support. Why should Nigeria suffer because it wants to assist other neighbouring countries?”

The Nigerian government is implored to get to the root of this matter with a view to taking appropriate actions. At the centre of this governmental action must be an investigation and possible reform of the activities of Nigerian Customs and Immigration services, two agencies that have been riddled with corruption allegations for so long but yet are very important to the integrity of the Nigerian borders. Is it possible that, rather than being reduced via deception, duties are not even paid at all on some of these commodities that enter through the country’s porous borders? And would this be due to incompetence or corruption within the rank and file of the immigration and customs services?

These are obvious key questions to pursue in an attempt to deal with the issues raised against Benin Republic and others. However, there must be some sense of urgency because the borders are so porous to admit hundreds of thousands of tonnes of palm oil daily. Questions must then be asked as to what else these borders have been permitting into the country without a trace of passage. In the main, the Customs and Immigration authorities should be thoroughly investigated by anti-graft and intelligence agencies. They have to tell the nation what may have aided and abetted this huge economic sabotage against Nigeria.

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