Nigerian government will double down on autarky drive

Significance

In late August, Nigeria’s federal government effectively shut the country’s border with Benin and parts of the western border with Niger for 28 days to stop what the federal government calls “massive smuggling activities”, especially of rice, undermining its self-sufficiency drive.

Impacts

• Nigeria’s ‘under-recovery’ costs on subsidised fuel sales may reduce as the illegal export of refined products is hampered.
• The closures will likely lead to even larger prices distortions, potentially resulting in more violent smuggling tactics.
• Broader trade could also be affected given the importance of Benin’s Cotonou port for Lagos businesses.
• Neighbouring states will face pressure to limit smuggling into Nigeria; Niger has already banned rice exports to Nigeria.