By Musa Haruna, Declan Essien, Gift Awah, Jude Kawyindagami
Access to sea is a deep national asset. It confers on lucky countries comparative economic powers and strategic geopolitical advantages. It also can and has made certain countries highly sought after even by bigger nations in need of allies.
At the turn of the millennium, a good number of nations had attained economic success primarily by building their maritime economy – also called the blue economy. The BRICS economic bloc of Brazil, Russia, India, China and lately South Africa could never have become emerging global powers without paying premium attention to the seas.
Other nations have followed suit – Singapore, Vietnam, Malta, Oman, Morocco, Panama, Saudi Arabia, UAE, Qatar, Sri Lanka, Indonesia, Thailand, South Korea, Malaysia, The Philippines, Ukraine and Iran.
Each of these countries deliberately combined smart thinking with access to sea for economic reengineering, recovery and rebound.
Nigeria, with its vast sea and inland water resources, should be counted in this league of maritime powers. But it is not.
Nigeria’s position in Africa – for long been displaced by South Africa, Egypt and Morocco – slides even further down the rung, and is made so by the tiny West African neighbours of Benin Republic and Togo.
Until a little over two decades ago, looking for Benin Republic on the African continental economic map would have been akin to looking for a pin in a haystack. Without crude oil, manufacturing or tech industry, Benin was a poor country whose citizens survived on subsistence fishing and agriculture.
With cotton as its export, Benin’s senior civil servants spent years in the queue jostling to obtain motorcycle loans. All that began to change the day Benin paused to take a second look at its eastern neighbour, Nigeria.
Seeing vast but under-utilized maritime potentials worth billions of dollars annually, the tiny republic quickly re-sized its modest seaport, determined to get a piece of the action from Nigeria. Soon Benin was building flyovers, bridges, hi-rise buildings, multiple-lane highways and other ambitious infrastructure.
Civil servants began to quit their posts to join other compatriots in the long chain of a lucrative transshipment enterprise to Nigeria. In less than a decade, the colour and character of the commercial capital, Cotonou, had been altered by a wide range of posh automobiles – particularly SUVs – enchanting architecture. Grand Marché de Dantokpa (a sprawling international market), glitzy bars, restaurants and fast-food outlets as transshipment trade to Nigeria spun a boisterous middle class.
At the expense of its giant neighbor, Benin Republic emerged from the economic wilderness. According to the World Bank, Benin’s economy is heavily dependent on the informal re-export and transit trade with Nigeria, which accounts for about 20% of its GDP.
The World Bank also said that about 80% of imports into Benin are destined for Nigeria. Ironically, Benin has only one seaport. Ordinarily, it should have no business transshipping cargoes to Nigeria, a country with eight ports – virtually all of them underdeveloped.
The ports are Apapa in Lagos, Tin Can Island port in Lagos, Warri port in Delta State, Calabar port in Cross River State, Port Harcourt port in Rivers State, Onne port in Rivers State and Koko port in Delta State.
Built in 1965, the Cotonou port was a French colonial inspiration designed to serve the landlocked Francophone countries of Niger Republic, Burkina Faso and Mali; each providing agro and industrial raw materials for export to France.
The most valuable of the exports was, and still is, Uranium – the critical radioactive material for nuclear power stations. Niger Republic is one of the few countries in the world with Uranium dedeposits.
Uranium from French mines in Arlit – a desert town in northern Niger – travel through the Cotonou port to France and other parts of the world. Today, the Cotonou port covers 400 thousand square meters. Its commercial quay contains four 155-meter berths, two 180-meter berths, one 220-meter berth for container vessels, and one berth for roll-on/roll-off cargoes.
Warehouses cover 57 thousand square meters and include a 65-thousand square meter container depot.
Notably, all the expansions witnessed in Cotonou Port are aimed at accommodating Nigeria’s ever-expansive import appetite.
One of West Africa’s leading shipping lines, the OT Africa Line (OTAL), has a terminal dedicated to handling containerized cargo. The terminal contains 7 thousand square meters of container space and container-handling equipment. A 2007 World Trade Indicators report recognized the Cotonou Port as third leading exporter in the West African region.
Curiously, Benin Republic has only two major export commodities – cotton and kapok. The latter is used for making fluffy pillows. The combined tonnage of these two cash crops can hardly make Benin the third leading exporter in West Africa.
So what is the mystery item that has added to cotton and kapok to push this tiny country up the export table? The answer is Nigeria.
The same 2007 World Trade Indicators report identifies “growing re-exports to Nigeria” passing through the Port of Cotonou as the country’s trade secret. Unwilling to show openly how much milk it is getting from the cow, Benin – as a routine – grossly underreports transit cargoes bound for Nigeria.
However, what Benin Republic seeks to conceal are actually open secrets; made so by shipping declarations provided in their home countries by European, American and Asian exporters doing business with the Cotonou Port.
Measured from mirror import data reported by these overseas exporters, it was discovered that between 2000 and 2005 for instance, the flow of goods entering the customs territory of Benin had been significantly higher than what Benin reports for imports. The volume of goods entering Benin, a country of 11.5 million people, was 219 percent compared to a ratio of 94 percent for Nigeria – a country of over 200 million people.
Official figures from the Cotonou Port suggest some spooky economics. It suggests that Nigeria – a country of over 20 times in size and population than Benin and with about the same proportion higher in the disposable income of their respective citizens – was consuming far less goods than its tiny neighbour.
Nigeria is about two-third of the 349 million-population of the 15 ECOWAS countries. In commerce, setting up shop in Nigeria, is equivalent to setting up shop in ten ECOWAS countries. Adding disposable income – a key factor that sees an average Nigerian owning three mobile phones with the inevitable urge to buy another before year end – setting up shop in Nigeria alone could as well translate to setting up shop in 14 ECOWAS countries.
Whilst there exists official re-exports to Nigeria from Benin, unofficial channels consists of smuggled re-exports of imports that pay ECOWAS common external tariffs (CET) and/or Benin’s tariffs to the Benin’s treasury.
The World Bank study cited earlier also mentioned that the greatest unofficial trade from Benin to Nigeria is in used cars, rice, clothing and textiles, as well as general consumer goods. The Big Four Commodities are second-hand automobiles imports controlled by Lebanese cartels, rice by Indian cartels, textiles by Chinese cartels and frozen food from Brazil and elsewhere. All are aimed at Nigeria.
Cashing in on Nigerians’ craze for cars, Benin determinedly made its port an automotive center especially for European brand cars. As a result there is well established overseas car shipping services to Benin from the United States and Europe.
Automobiles are the number one import to Cotonou from the United States. The vehicles take less than 20 days to reach Benin. Luxembourg-based shipping company BIM e-solutions says an average of 10,000 cars arrive at the Cotonou port from Europe monthly. According to the Nigeria Customs Service, many are smuggled across the border into Nigeria. Logistics to facilitate such cross-border illegalities receive apparent state approval and support from Benin – several times accused by the Nigerian government of allowing into its port items on Nigeria’s Import Prohibition List.
Like Nigeria, South Africa also has eight ports. Unlike Nigeria however, all of the ports are commercially developed and positioned to play an important role in the South African economy and in the economies of landlocked members of the regional Southern African Development Community (SADC).
The Durban Harbour welcomes about 4,500 vessels yearly and about 83,000 containers per month. This South African port alone conducts trade worth over $45 billion annually. It is the largest and busiest shipping terminal in sub-Saharan Africa. And that is coming from a country barely one-fifth of the population of Nigeria.
The Durban Harbour, as it is popularly called, is the second largest container port in Africa. The first is the Port Said in Egypt. Durban is the fourth largest container port in Southern Hemisphere. First is Jakarta in Indonesia, second is Surabaya in Indonesia, and third is Port Santos in Brazil.
The distance around the Durban Harbour is 21 kilometres. The port has 58 berths which are operated by more than 20 terminal operators. South Africa takes special pride in its seaports every time it tells the world it is ready for business.
It is not clear if Nigeria is listening to the business language of South Africa, its arch political and economic rival on the continent. South Africa dominates and leads the 16-member regional economic bloc, Southern African Development Community (SADC) that includes Angola, Botswana, Comoros, DR Congo, Lesotho, Malawi, Mauritius, Mozambique, Madagascar, Namibia, Seychelles, Swaziland, Tanzania, Zambia and Zimbabwe.
Maritime power is one of the economic tools South Africa uses to lead. Nigeria should be doing same in the ECOWAS economic bloc.
But if there is any national strategy to make Nigeria the maritime hub of the sub-region, Benin Republic and Togo already have bad news for Nigeria. The tiny Francophone countries understand that in the battle of the deep water, it is swim or sink.
A third Francophone country, Niger Republic, has joined to make Nigeria a deep-sea paradox. This landlocked country has joined the maritime trade; achieving the impossible by transshipping cargoes to Nigeria – a country with eight seaports.
This investigation was carried out under the Collaborative Media Engagement for Development Inclusivity and Accountability Project of the WSCIJ, with funding from the MacArthur Foundation.