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Nigeria’s border closure sparks mixed impact on economy4 min read

As for rice, the country’s agriculture lobby is loudly supporting the border closure

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Nigeria's border closure sparks mixed impact on economy
A picture taken in Maradi, near Niger's southern frontier on October 19, 2019 shows trucks parked after the Nigeria closed its border with Niger on August 20, 2019 to defend against smuggling. - The closure of the border by Nigeria has put trade at a stalemate since August 20, AFP reports. (Photo by BOUREIMA HAMA / AFP)

Two months ago, Nigeria slapped restrictions on cross-border trade with its neighbours, but there are mixed signals as to whether the controversial move is benefitting the country.

On August 19, President Muhammadu Buhari dramatically closed Nigeria’s land frontiers to goods traded with Benin, Cameroon, Chad and Niger, saying its economy needed to be protected from rampant smuggling.

The move has met with howls of pain in Benin especially, and cast a shadow over a newly-minted agreement to scrap restrictions on trade among African economies.

READ: Badagry-Seme border closure: A tale of hunger games?

But has it been beneficial for Nigeria, as the government has sought?

Evidence seen by correspondent suggests that any benefits are at the macro level — and the country’s many poor are likely to be among the losers.

The two main commodities being smuggled were petrol and rice.

Petrol was being sneaked out from Nigeria, where subsidies make the fuel half as cheap as in its neighbours, and resold.

Rice, on the other hand, was being brought into Nigeria, where consumers favour imported Asian-grown varieties over the locally-grown competitor, from Benin via its port in Cotonou.

The most visible winner from the closure is the Nigerian treasury, which has benefitted from the falling cost of petrol subsidies and from a rise in customs receipts.

READ: Nigeria’s border closure sparks tension after price hike of rice

“Nigeria, to her detriment, may have inadvertently subsidised (fuel) supply to a few West African countries for more than 12 years,” the Nigerian consultancy Cardinal Stone said in a report this month.

Sales of gasoline in Nigeria fell by 12.7 per cent after the border closure, which indicates that millions of subsidised litres (gallons) are being secretly taken abroad for resale, it said.

The reduction in consumption, if sustained, could lead to subsidy savings of around ₦13.5 billion monthly and ₦162.1 billion annually, it estimated.

In early October, Nigeria’s customs chief, Rt. Col. Hameed Ali, said customs receipts had reached a record level, of ₦5 billion daily, since the closure, with the bustling port of Lagos benefitting most as imports rise through official channels.

Gain and pain –

Nigeria's border closure sparks mixed impact on economy
A taxidriver fills his vehicle up with gas fraudulently brought from Nigeria in Maradi, near Niger’s southern frontier on October 19, 2019 after the Nigeria closed its border with Niger on August 20, 2019 to defend against smuggling. – The closure of the border by Nigeria has put trade at a stalemate since August 20, AFP reports. (Photo by BOUREIMA HAMA / AFP)

As for rice, the country’s agriculture lobby is loudly supporting the border closure.

Ade Adefeko, a senior executive in charge of corporate relations with the food giant Olam, said investment in Nigerian agriculture was being hamstrung by the rice trafficking, which is estimated to reach two million tonnes a year.

Olam has the biggest rice-growing business in Nigeria, owning 13,000 hectares (30,000 acres) of cultivable land of which only 4,500 ha. are being used because the sector is “not profitable” in the face of competition from Asian rice, he said.

But “since the border closure, locally-milled rice has started selling, and the entire rice value chain has been positively impacted by the closure,” Adefeko said. 

READ: Nigeria’s custom chief says Seme border closure has no ‘time limit’

He called for the border closure to be maintained “until the end of the year, and see how it goes on a longer-term.” 

The customs chief, Ali on Monday told reporters there was no “time limit… It will continue as long as we can get the desired results.”

But if the border closure is a boost for domestic growers, it has led to price increases for consumers.

Nigeria's border closure sparks mixed impact on economy

The price of a 50-kilo bag has more than doubled to ₦20,000, roughly the entire monthly income of a Nigerian living in extreme poverty — of whom there are an estimated 87 million in the country.

Traders in Lagos Island, a vast market of Made in China textiles and gadgets, say the closure of the borders had crimped supplies via Benin’s Cotonou.

“Lagos port is too slow and you have to pay too many bribes to get your goods out,” said a swimsuit hawker. “I have to cut down my margin by half.”

The annual inflation rate has edged up to 11.24 per cent in September, while food inflation ran at 13.51 per cent.

Filling a role –

A similar complaint is heard among people in Nigeria’s industrial sector, which is already struggling with the country’s notoriously poor transport system and electricity shortages.

Trade with neighbours is essential, they say.

“The intention of stopping smuggling is praiseworthy but the point is that measures have an impact on us,” said a foreign investor who specialises in the import and export of manufactured goods.

“As usual in Nigeria, it’s all down to a question of strength — you crush first and talk later.”

Between 10 and 20 per cent of Nigerian manufactured goods are sold to other countries in West Africa, with many of these items, such as pasta and cosmetics, exported through informal routes, mainly through small sellers who travel around the region.

“We need direct investments, we need industries to create jobs in this country,” said Muda Yusuf, director of the Chamber of Commerce in Lagos.

“Some people can celebrate but while they put their money to the bank, the rest of the people are suffering.” 

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Zimbabwe target cash shortages with new banknotes and coins

New two- and five-dollar notes were disbursed by the central bank on Monday.

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Zimbabwe target cash shortages with new banknotes and coins

Zimbabweans began using new banknotes and coins Tuesday, as the nation’s central bank seeks to ease chronic shortages.

The Zimbabwean dollar is being gradually reintroduced, after a prolonged loss in value caused by decades of economic mismanagement that forced the country to rely on US dollars for a decade.

New two- and five-dollar notes were disbursed by the central bank on Monday. 

One Zimbabwean dollar is currently worth around six US cents.

“Bond” notes — a legal tender pegged to the US dollar — were introduced in 2016 to alleviate chronic cash shortages and ease a transition back to Zimbabwean dollars.

These were then supplemented with electronic RTGS dollars in June 2019.

But cash remains hard to come by, and most people use mobile money and now-banned foreign currencies to pay for goods.

Withdrawals remain capped at a maximum of 300 new Zimbabwean dollars ($18) per week per customer – which buys less than three kilogrammes of beef.

Account-holders wait long hours to draw cash.

In Zimbabwe’s capital Harare, bank customers remained sceptical.

“There is no difference,” Milton Mushangwe, 37, told AFP. “The withdrawal limits remain the same.”

“We are still getting the same small amount of 100 dollars or less,” added another customer, Richard Govha.

Zimbabwe’s reserve bank said that only 31 million new Zimbabwean dollars (less than $2 million) had been disbursed so far, of a planned total of one billion that is to be drip-fed into the system over the next six months.

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The growth of digital and online marketing in Africa

Is Digital Marketing for Africa? How have businesses gained by marketing online?

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Growth of digital marketing

Innovative changes have over the years, proven to be a constant. Ways of doing things are changing globally at a rather fast pace; things that affect the way we live, the way we travel, study, do business, run homes and families, interact with others etc.

The influence of innovation is simply overwhelming! One sector that has been touched by the transformative wind of innovation is the business sector. In this article, we are going to evaluate the growth of digital marketing in Africa. Before we dissect the topic, let us first look at the meaning of digital marketing.

What is digital marketing? 

Wikipedia defines digital marketing as the marketing of products or services using digital technologies, mainly on the internet, but also including mobile phones, display advertising, and any other digital medium. From the definition provided by Wikipedia, one may sum up the meaning of digital marketing as the use of technologies in marketing as opposed to the traditional ways of marketing we all know.

Before the digital era, marketing and advertisements were only done using traditional methods such as public announcements, newspaper, radio, television, billboards, posters and flyers. Digital marketing on the other hand employ methods such as social media marketing, search engine optimization (SEO), search engine marketing (SEM), e-Commerce marketing, content marketing among other methods.

Advertising has been taken to a whole new level through the help of online marketing. Business owners, especially startups in Africa now save millions hitherto used in running newspaper advertisements and paying for sessions on television channels that expire after a short time. They now spend less than half of that amount to advertise on various digital platforms, which enjoy more audience than the traditional means, including television and newspapers. 

The state of online marketing in South Africa

 In South Africa, a study by World Wide Worx in collaboration with Cisco Internet Business Solutions Group found that as at the year 2010 the number of South African internet users have grown beyond 5 million. Ever since figures continued to advance upwardly.

By 2016 the number of internet users stood a little below 29 million. That was more than half of South Africa’s 52 million population. With that number of internet users, digital marketing will continue to grow in leaps and bound in South Africa.

Kenya and Digital Marketing

In Kenya, the story is pretty much the same as in South Africa. If you are familiar with Kenya’s marketing terrain, you will understand how big it has grown in a very short period.  Just a couple of years ago, expensive traditional methods of marketing still thrived in the country but today the story has changed as around 22% of all media consumption in Kenya is digital.

What is more, this number is growing fast! The German online portal, Statista reported that Internet advertising spending in Kenya is expected to grow from US$72 million in 2015 to US$151 million in 2020.

Digital marketing in Nigeria

Digital Marketing started to gather momentum in Nigeria around 2012 with the entry of e-commerce platforms such as Jumia and Konga in the country. The period between 2015 to 2019 saw a massive increase of Small & Medium Enterprises in the country with a population of 190 million people.

According to Statista, Nigeria had 92.3 million internet users in 2018 and it is projected to grow to 187.8 million internet users in 2023. This was 47.1 per cent of the population in 2018. It is expected to climb to 84.5 per cent in 2023. With 92.3 million people using the internet, the place of digital marketing in Nigeria’s business space has been secured. The prospect for the growth of digital marketing in Nigeria seems pretty good.

From the situation reports in South Africa, Kenya and Nigeria – three of the largest economies in Africa, digital marketing is growing really fast in the continent. The future of Businesses in Africa can now be viewed better through the lens of the digital.

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Nigeria extends border closure to January 31

Illegal importation of cheap rice is seen as a major cause of the decision by the Nigerian government to close its borders

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Nigeria extends border closure to January 31

Nigerian President, Muhammad Buhari has announced an extension on the country border’s closure with neighbouring countries until 31 January, 2020.

The Nigerian government closed all its land borders two months ago in a bid to stop smugglers and criminals who pose a threat to the country and its economy.

“Mr President has approved the extension of the exercise to January 31, 2020. Consequently, you are requested to convey the development to all personnel for their awareness and guidance,” Victor Dimka, the Deputy Comptroller of Customs in charge of Enforcement, Investigation and Inspectorate, directed in a memo.

Even though the border closure had bore fruit, a few objectives are yet to be achieved.

Illegal importation of cheap rice is seen as a major cause of the decision by the Nigerian government to close its borders.

While some businessmen in the West African country say they have made huge losses since the directive took effect, officials are confident there is more to gain once the desired objectives are achieved.

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