How 0.5% tariff will impact trade between Alliance of Sahel States and Nigeria – Experts
Experts and traders in Kebbi and Katsina states have said that the 0.5% tariff imposed on goods from Nigeria and other ECOWAS countries by the Alliance of Sahel States will in the long run have negative consequences on the economies of Niger, Mali and Burkina Faso.
They said in separate interviews with The Syndicate that the tariff would also affect the largely small scale trading activities between the ECOWAS and AES countries.
Alhaji Abubakar Dallatun-Kalgo, National Publicity Secretary of the National Shea Products Association of Nigeria (NASPAN), said the tariff would have drastic effects on the ECOWAS protocol on free movement of persons, goods and services.
He added that the attendant results was going to have negative implications on the three countries of Niger, Mali and Burkina Faso.
“Niger, Mali and Burkina Faso are all landlocked countries and depend largely on ports in Lagos, Cotonou, Lome, Accra and other Coastline Countries.
” Therefore, the remaining ECOWAS countries may likely impose the same on goods and services from the Sahel countries of Niger, Mali and Burkina Faso.
” The larger implications have to do with fraternal relationships among communities in the region.
” They have been ties for centuries through marital and and other historical relationships but the new policy is drifting such engagements apart.
” It may not stand the test of time, but in the long run they may likely see wisdom in returning to the ECOWAS fold and become active players in the African Continental Free Trade Agreement (ACFTA),” he said.
On his part, Malam Nasiru Karofi, an Economic Analyst, opined that introducing the levy would reduce volume of trade between the military led-Sahel states and their neighbours.
“If such trades continue the countries may generate some revenue,” but they must allow free trade to earn that revenue.
He added that if the exporting countries factor the levy into their cost and it reduced their profits, they might look for trade partners outside of the military led states.
“I am not unmindful of the fact that the percentage charge is small but is significant in terms of the volume,” he said.
In Katsina State, traders in Mai’adua local government which shares border with Niger Republic said the new tax will affect small businesses, lead to revenue losses, and encourage smuggling.
Traders in Kongolom, a border town with Niger Republic, said the tariff would disrupt businesses of the largely small scale traders in Nigeria and Niger.
One of the traders, Alhaji Muhammad Mamman said that the tariff would disrupt the long-standing trade relationship between countries in the region as many traders along the border rely on daily transactions to sustain their businesses and families.
“Small and medium scale businesses might not afford the expenses forced by this new tax. If fewer goods move across the border, markets in Mai’adua and other areas will suffer, leading to economic stagnation,” he said.
Mamman forecast that smuggling would increase as traders might look for ways to bypass the official channels, which may lead to revenue losses.
Malam Abubakar Sagir, another trader said instead of imposing more taxes, both countries should work on improving trade policies that encourage economic cooperation.
He said business in the border communities has already been affected by the past border closures and diplomatic issues, especially between Nigeria and Niger Republic.
Traders, he said, might reduce their imports or look for alternative routes to avoid the levy, which comes with its own risks.
On his part, Alhaji Kabir Sani, an expert and a businessman, revealed that majority of the traders in Nigeria and Niger depend on small profit margin.
“Any extra cost will affects our ability to compete; adding a 0.5% duty will only make things worse.
“Instead, both governments need to find a better way to support trade, not make it harder.
“If this continues, business will slow down, and both Nigerians and Nigeriens will suffer,” he added.
