Coming and going: Border and regional infrastructure set for upgrades

Reliable road connections will prove crucial to a regional ambition to further integrate the free movement of people and goods. Already accounting for some 90% of domestic trade, road transport also facilitates significant trade along Nigeria’s 4047 km of land borders. Ranked 146th of 189 by the World Bank’s Ease of Doing Business index in terms of cross-border trade and 100th of 155 countries in logistics performance in 2010, there is significant room for improvement. With support from multilateral financing agencies the country is investing in road upgrades to improve its links to surrounding countries, taking advantage of its strategic position at the crossroads of West and Central Africa.

FLARE-UPS: While connections to northern land-locked neighbours like Niger and Chad have been imperilled by regular border closures in the midst of a flare-up in violence linked to Boko Haram, focus is shifting to southern links to the east (Cameroon) and west (Benin), long-established as crucial trade corridors. Price corridors between the euro-linked CFA zone and the naira zone have contributed to significant smuggling, along the Benin and Cameroon borders in particular. The growth in formal and informal trade with neighbours has prompted the upgrade of two key road connections. With Nigeria’s (formal) trade with ECOWAS just N553bn ($3.5bn) in 2011 (albeit up from N264bn, or $1.69bn, in 2005) compared to total trade with Africa of some N2.03trn ($13bn), there is significant scope for growth in road-based cross-border trade.

LAGOS TO ABIDJAN: The four-country corridor from Lagos to Côte d’Ivoire’s capital Abidjan is the global gateway to landlocked West African countries, with ports handling all traffic to the north. ECOWAS, with support from the World Bank and the African Development Bank (AfDB), has invested $405.5m in the corridor’s facilities since 2010, aiming to improve infrastructure, reduce the non-logistics costs of inefficient soft infrastructure and implement the regional protocol on the free movement of goods and people. The World Bank likewise allocated $90m to help support the project in May 2012.

KEY CORRIDORS: A key segment of the trade corridor is the 178-km road from Lagos to the border town of Seme onto Cotonou, capital of Benin, a crucial link for Nigerian imports as well as for its exports to the rest of West Africa. “The Seme Area Command is one of the busiest borders in the country as it serves as the major gateway between Nigeria and the ECOWAS sub-region,”

Alhaji Inde Dikko Abdullahi, the controller-general of Nigeria Customs Service, told local press in November 2011. The AfDB estimates some 23% of Beninese imports were re-exported to Nigeria in 2010, while significant smuggling persists in both directions. Launched in April 2009, the state of Lagos’ N220bn ($1.4bn) expansion of the 60-km Lagos-Badagry expressway from four to 10 lanes and the establishment of toll gates is currently under way, and will include an upgrade of the remaining 18 km onto Seme.

While the first lot of the project from Lagos to Amuwo-Odofin is handled by domestic construction firm Julius Berger, the state government launched a tender for work on the second lot, covering 24.5 km onto Okokomaiko, in November 2011. Four additional companies bid for the contract: local players Moreno-Marina–Lagoon and Salini Nigeria, and the Chinese Civil Engineering Construction Company (CCECC) and CGGC Global Projects. CCECC won the contract and work began in February 2012. With the Lagos-Badagry upgrade due for completion by 2015, this key piece of infrastructure will accommodate growing traffic. “The project will not only open up the West African market to Nigerian businessmen and traders, but will also affect positively the value of properties along the corridor,”

Kadri Hamzat, the Lagos state commissioner for works and infrastructure, said in a January 2012 statement.

But road upgrades are only one component of the region’s trade facilitation agenda. The EU, under its ninth development fund, has extended €37m to ECOWAS for the construction of three joint border posts, at the Togo-Ghana and Nigeria-Benin border crossings.

The Seme-Krake border is notorious in its inefficiency, with multiple checkpoints run by different services, including immigration, Customs and tax departments, as well as separate border controls operated by Benin. Authorities expect the combination of border controls when the joint border post is completed in 2013 will significantly speed up formalities while reducing irregular practices such as smuggling and corruption.

OPEN THE BOTTLENECK: Nigeria’s federal government established a task force on cross-border trade in March 2012 to study remaining bottlenecks in implementing the free movement protocol, focusing its attention on the Lagos-Seme link as a pilot. Yet doubt remains over Nigeria’s commitment to trade liberalisation, particularly the role of Customs: the country’s Customs revenue actually increased significantly in the first half of 2012 to N3.32trn ($21.25bn), from N2.76trn ($17.66bn) in the first half of 2011. While export earnings declined in line with efforts to promote exports, import tax revenues are growing. But despite concerns, road upgrades will improve traffic flows along this axis.

LOOKING EAST: Long isolated from Nigeria’s dynamic greater Lagos region by a dilapidated east-west highway, border trade in the south-east is set for a strong boost from improved road connections. Important ( formal and informal) trade already links Nigeria to its eastern neighbour: Nigeria became Cameroon’s largest source of imports in 2011, accounting for roughly a quarter of its imports. The Nigeria-Cameroon highway project was originally mooted in the 1980s, but only became bankable in 2008, when donors including the AfDB, the World Bank and Japan's Agency for International Development agreed to support part of the cost of the $500m project, with Cameroon and Nigeria covering 11% of project costs each. The highway is a key segment in the long-planned Trans-African highway, expected to link Lagos to Mombasa. Work on the 433-km road between Enugu to north and central Cameroon began in June 2010 and is due for completion by 2013.

The AfDB financed 89% of the $167m construction costs on the Nigerian side, from Enugu to the Ikom-Mfom border crossing. Nigerian contractor PW is upgrading the 53-km section from Ogoja Junction to Ikom, in Cross-River State, for N6.38bn ($40.8m). Nigerian-Lebanese construction firm Setraco was awarded the N9.75bn ($62.4m) contract for upgrading the Enugu-Abakaliki road. Work on the 280-metre, dual-lane bridge over Cross River will be finalised by the end of 2012.

TRANSNATIONAL MARKET CENTRES: In a bid to promote expansion in bilateral trade, the Ministry of Trade and Investment announced plans in 2011 to establish six “transnational market centres” along Nigeria’s borders, one of which will be at the Ikom-Mfom border crossing. The two countries signed a bilateral agreement on border security in February 2012 to crack down on informal trade while boosting formal trade flows. They plan to establish a joint border post to reduce the time needed for administrative processing, and introduced a tender for its design in July 2012.