The DRC’s 'inspection générale des finances' (IGF) has identified several key figures – including Joseph Kabila's former prime minister ... Augustin Matata Ponyo – involved in the disappearance of more than $205m for the Bukanga Lonzo agroindustrial park project.
Such smuggling is also why the 16-month border closure dealt a relatively minor financial blow to traders.
Four portly men flaunting all the trappings of wealth, from their gold-framed glasses to their heavy watches, were on their way out of a customs official’s office.
Almost immediately after the door shut behind them, while they were collecting the mobile phones they had been asked to leave with the duty officer to prevent them from being able to record any funny business, one of them pulled out a thick wad of cash.
In the waiting area, a half-dozen visibly stunned people watched as the man conspicuously counted ten or so bills before handing them to the young customs officer managing the reception desk.
Car trunk brimming with bags of rice
The officer looked quickly around the room and shook his head no, but ultimately gave in and pocketed the money. The four men, grinning broadly, exited the building and rushed back to their car, the trunk of which was undoubtedly brimming with bags of rice. Finally, they proceeded to head in the direction of Nigeria.
This scene unfolded in Nigeria in early January at the Sèmè-Kraké joint checkpoint, one of the main border crossings with Benin. It shows that shady dealings are once again possible along a border that reopened on 16 December after a 16-month closure.
Abuja’s decision to reverse the blockade was made as unilaterally and suddenly as it had announced the closing of the border back in August 2019.
People in Benin had expressed serious concerns about the move since the country’s trade with Nigeria accounted for about 20% of GDP at the time.
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However, the disaster that many had predicted never came to pass, even though the closure had an immediate – and catastrophic – impact on farmers near the border with Nigeria, as they sell 80% of their output to their neighbour.
Posting a 2% growth rate in 2020, Benin managed to mitigate the impact of the border closure, even as the Covid-19 pandemic raged on and with the rest of West Africa projected to report negative growth in the range of 2%-4%.
The announcement of the reopening of the border was well received on both sides, though for the time being it only applies to pedestrians and a small number of private vehicles. Legal trade flows have yet to resume.
Patrols and inspections
In attendance at the inauguration of Ghana’s President Nana Akufo-Addo on 7 January in Accra, Aurélien Agbénonci, Benin’s foreign minister, shared his concerns with his Nigerian counterpart, Geoffrey Onyeama, who apparently promised he would speed up the reopening process.
On the same day, a Beninese customs officer, speaking on condition of anonymity, told us: “Nothing has changed. We haven’t received any instructions concerning freight transport. The border has never been closed on our side. We’re putting up with it.”
In Nigeria, dozens of trucks are stuck just a few hundred metres away from the office of Bello Mohammed Jibo, comptroller of the Nigeria Customs Service, who told us that goods can in fact be transported over the border, “except for prohibited products like rice, tomatoes and vehicles”, among others.
Jibo adds that Nigerian customs officers have “taken advantage of the closure to step up patrols and inspections” in an effort to combat smuggling, and were given instructions “to only let in goods transported via containers that came through the port and to turn away bulk goods”.
In reality, the only trucks able to cross the border are those belonging to the Dangote Group, a conglomerate owned by Nigerian billionaire businessman Aliko Dangote. An ally of President Muhammadu Buhari, Dangote was granted an exemption in November 2020 covering the goods his group imports through the ports of Cotonou and Lomé.
Record inflation in Nigeria
In addition to the concerted efforts of the Economic Community of West African States and Benin’s finance minister Romuald Wadagni and foreign minister Agbénonci to facilitate the reopening of the border, Dangote’s lobbying and the worsening situation in Nigeria pushed Abuja to act.
Inflation has reached record highs in the country, with food prices jumping 18.3% in November, and US dollar restrictions imposed on importers have poured fuel on the fire.
“Major sector players, like Dangote Farms and Olam, have a sufficient supply of rice to immediately meet the surge in domestic demand in the wake of the border closure. They are the big winners of this crisis,” says Léopold Ghins, a policy analyst and economist with the OECD’s Sahel and West Africa Club who argues the measure has severely harmed the business environment.
At the outset, Abuja justified the border closure by saying it wanted to protect its domestic market from tonnes of “re-imported” rice and frozen poultry unloaded in Benin and then sent onwards to Lagos.
Though goods inspections are not under her remit, police superintendent Maylise Wannou, who works at the Kraké Plage border checkpoint, observed that the closure “triggered a rise in smuggling”.
In fact, just a stone’s throw away from the checkpoint, on Benin’s side of the border, rice wholesalers have not shuttered their doors. And according to one such wholesaler, business has not stopped.
“After a few difficult weeks, people found ways around the closure. Before, Nigerian importers crossed the border via road, but when the border was closed, they started coming here in boats. They arrived on the beach to load rice and then left to head back to the other side,” a seller says, pointing to the shoreline close by. “Since the reopening, smugglers have gone back to making overland trips.”
“After being transported on dugout canoes, the rice was sometimes wet on arrival and it took a long time to dry. Things are getting back to normal now,” he adds.
The constant activity just a few kilometres west at the Cotonou port, where time-worn heavy machinery are working nonstop, backs up the seller’s account.
“The impact will be modest overall. The port handled 10.1m tonnes [MT] of goods in 2019 and something in the range of 9.5 to 10MT in 2020,” says Kristof Van den Branden, head of sales and marketing at the port.
Despite lower volumes in the final months of 2019, traffic was up on 2018 (from 9MT).
Cutting the umbilical cord
“Of course, rice trade flows were down (from 1.4MT to around 600,000 tonnes), but the industry continued to grow, even with the border closure and the pandemic. Cotton export flows also boosted volumes,” adds Van den Branden.
Benin’s official line is that it used the shock to “accelerate the diversification of its economy” and cut the umbilical cord with Nigeria. But inside the country’s ministries and security agencies, officials concede that the border has remained porous, including on the Nigerian side.
The business community often prefers Cotonou’s port to that of Lagos because customs duties are lower there and the waiting period for goods to clear customs is never longer than three days, in contrast to up to 30 to 35 days in Lagos.
“It can be faster and therefore cheaper to go through Cotonou, ship the goods up to Niger and then bring them back down to Nigeria,” says an official from the Benin Port Authority.
In the words of a Beninese minister: “It’s difficult to curb rice smuggling when the reality is that most of the people carrying out such activities are Nigerian and, on our end, it’s not really in our interest to put a stop to it.”
For Agbénonci’s part, “Closing the border undeniably had an impact, but very quickly [President] Patrice Talon made it about how we needed to ‘kick our habit’ of reliance on the Nigerian economy. And that’s what was done.”
While maintaining that “diversification has paid off”, one of Agbenonci’s government colleagues had a different take on the situation: “Smuggling activities are largely organised by a number of people working at Nigeria’s security agencies – the same agencies that were supposed to stymie this kind of thing. All the border closure did was change the smuggling routes. The measure won’t help at all if we don’t do anything to fight corruption.”
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