• Nigeria’s border shutdown disrupts supply chains across West Africa

    28 November 2019

    On October 14, Nigeria closed all of its land borders to curb food smuggling as well as the entry of weapons and drugs into the country, making it the latest African nation to adopt such measures. The border closure has recently been extended until at least January 31, 2020.

    Earlier this year, Kenya, Rwanda, Sudan, and Ethiopia shut down parts of their own borders. These closures, which were imposed for a variety of reasons including security and health concerns, had relatively little impact on cross-border trade on the continent.

    However, with one of Africa’s biggest economies set to keep its land borders closed until at least January 2020, those shipping by road throughout West Africa should be aware of the increasing challenges the closures are expected to cause and plan accordingly.

    Biggest seaport to face further congestion

    As Africa’s second largest economy and its leading oil producer, Nigeria has become a gateway to the region for many companies expanding into West Africa in recent years. Transnational corridors passing through its territory, such as the Lagos-Mombasa Highway that links Nigeria with Cameroon, the Central African Republic (CAF), the Democratic Republic of the Congo (DRC), Uganda, and Kenya; or the Trans-Sahara Highway which connects it to Algeria via Niger, serve as crucial regional connections across the continent.

    However, as the land borders remain shut, these routes will be considerably less accessible and those transporting their goods in or out of Nigeria will have to divert to other points of entry, likely reinforcing existing logistical challenges at its air and sea gateways. The Lagos Port Complex, the country’s main seaport, has faced extreme congestion for years with berthing times for incoming ships averaging 12 days in mid-November 2019.

    Moreover, in light of the increasing congestion, carriers have threatened to go on strike to pressure the concerned authority to find a solution to ensure smooth traffic in the area. Carriers and forwarders fear the situation will worsen further as more ships are expected to berth at the port until land borders reopen.

    Businesses in neighboring countries affected

    While the quality of the continent’s road network varies significantly across regions, the vast majority of freight is still moved across Africa via roads. Thus, Nigeria’s decision to cut access to its road network quickly had a noticeable impact on import and export activities in neighboring countries such as Benin and Niger, where queues of trucks increasingly choke up checkpoints on both sides of the border.

    Small scale businesses in Nigeria, which depend on moving their goods to neighboring countries via road, have already experienced a negative impact on their revenue merely a few weeks into the closure. Similarly, businesses that export their products to Nigeria are also facing increasing financial losses.

    Perishable goods like vegetables were among the first to be severely affected by the closure as traders from both sides of the border were unable to move them to nearby markets. The closure also cut off the movement of numerous semi-processed and manufactured products to and from Benin, Togo, Ghana, and Cote d’Ivoire, including food, raw materials, leather, and chemicals. Even the goods that traders could take back to nearby warehouses or ones that never left storage are leading to additional costs as storage times far exceed initial calculations.

    The closures could have consequences far beyond the duration of the current border restrictions. Investors are already looking to shift their focus to other West African markets while companies located in Nigeria are beginning to relocate their businesses to other African nations. Local businesses in neighboring countries may also begin searching for new suppliers elsewhere to fill their growing supply shortages if the closure persists. As a result, supply routes throughout Africa that currently cross through Nigeria could be permanently altered.

    Border closures likely to remain a threat to road transportation

    While all previous border closures were eventually lifted, their increasing use and frequency will likely pose significant challenges to supply chains relying on road transport across the continent, should more governments decide to use border restrictions as a means to pursue their political agendas.

    As Nigeria’s border closure continues, some businesses have reportedly considered using trucks registered in Nigeria to deliver and pick-up goods in neighboring countries. However, no overarching formal solution has been proposed so far to cushion the closure’s impact on cross-regional trade.

    As operational processes at other points of entry continue to improve, organizations should also consider changing to air and sea-based cargo transportation to enter Nigeria. The Port of Onne in eastern Nigeria has significantly increased its productivity in 2019 and could become a reliable port of entry into the country in the coming year.

    In addition, supply chain managers should continue to proactively monitor the situation in the countries they do business in to gain an insight into operational difficulties before they manifest as disruptive political or economic decisions. Spotting early warning signs of impending border closures, which are regularly covered in local media sources, can help companies to reduce their response times, avoid costly supply delays, and implement mitigation measures earlier. Those doing business across Africa are advised to engage with their local suppliers to align on current delivery schedules and adjust delivery times in countries prone to road disruptions and border delays.

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