Saturday, March 14, 2009

Free traders


I went to the huge used clothing market in Agege today to answer a question that has been bugging me: why do so many hawkers and traders here (especially used-clothing sellers) journey to the neighboring Republic of Benin to get their merchandise? What could that tiny country possibly have that they don’t have here in Nigeria?

Answer: sensible trade policy. As I now understand, those vendors are not just going to Benin to buy things, but to smuggle them back in to Nigeria to sell. For example, in an effort to prop up the struggling domestic textile industry, the Nigeria government has banned the import of used clothing, most of which comes from the U.S. and Europe. That raggedy old t-shirt you donated to Salvation Army will probably end up in a market like this, to be unloaded in big bundles that look something like this:





So, instead of shipping the “okrika”, as it is called here, directly into Lagos’ huge port, it goes first to Benin, where it is bought by Benin middle-men, sold to Nigerian traders, smuggled over the border, and then resold again.

No doubt this is
bad economic policy which does nothing to encourage poor Nigerians to buy the expensive, locally-made fabric, which apparently costs up to $20 per yard. In the global marketplace, Nigeria is no longer a competitive place to make textiles – while labor is cheap, local producers have to power their own generators and drill their own wells, among other expenses.

It also extracts a huge human toll on the vendors and traders who make the trip. Think of the time and money wasted on all those needless trips. It can also be dangerous. Seven people died last month when a van of rice being smuggled into Nigeria caught fire.


4 comments:

  1. Hey Sean:

    It's interesting to read your blog. A couple of quick points:

    1. Your reference to "up to $20 per yard" for locally produced fabric seems a bit of an exaggeration. Locally produced wax-prints are available at Balogun and Yaba and many other markets. The going price is (or was when I was last in Lagos a few months back) less than half of what you quote--even for an oyibo/onye ocha!

    2. While it's tempting to take the tragedy of the seven deaths in the burning vehicle as a sign of the dangers of smuggling, if the people in that doomed van had been transporting legal rice, they still probably would have died. It's driving, in particular in an unsafe car, that is perilous, not smuggling.

    3. Regarding what you call "bad economic policy": if the Nigerian government wanted to police the border, it could end most of the smuggling. The government allows smuggling as a safety value, because it seems not to have the will to provide stable electricity and boost local production in ways that could provide reasonably priced items.

    I'm envious that you're in Lagos. Hope you're having fun.

    ReplyDelete
  2. Thanks for commenting, rn! And thanks for correcting me on the price of Nigerian fabric.

    You are certainly right that driving in Nigeria is dangerous whether or not you are smuggling goods across the border. But that only furthers my point -- that all the trips these traders have to take puts them at risk.

    Incidentally, although the photo I posted seems to show a pretty big haul, some traders I've spoken to carry across much smaller loads as a way of avoiding problems with customs officials. But smaller loads only mean more trips, of course.

    Its interesting what you say about the government's ability to end the smuggling. From what I can gather, there is a combination of a) a porous border with many roads across it, and b) corrupt customs officials. Roads could certainly be closed, but how easily could the Nigerian government put an end to the culture of corruption? I wonder.

    Anyone else have thoughts on this?

    ReplyDelete
  3. Nice observations, Sean. I am actually writing my Ph.D dissertation on the trade in okrika, and I found your observations fascinating. Yea, you are right, it is a combination of a porous border and corrupt customs officers. You probably should also know that the fact that many African boundaries run through ethnic groups essentially means that the borders would be porous. For one, many people live on one side of the border but work on the other side. Just like many have family members who happen to be citizens of different countries, but who are within walking distance of each other. Short of building very thick walls between the countries, the borders are going to be extremely difficult to police.

    You also wrote about volume of trade. Sure, many buy only in small quantity, but not mainly because they try to avoid trouble with customs official, but because of their trade model. Those who buy in small quantity are mostly traders who sell only in small quantity, and who are more comfortable with going through opened bales and selecting certain items that their customers favour. There are others who buy in quantities of up to 30 bales of clothing, mainly because they are wholesalers.

    This is running too long so I will stop here. I recently wrote a post about the consumption of okrika in Nigeria here so you can check it out.

    Rgds,
    Loomnie

    ReplyDelete
  4. Thanks for commenting, Loomnie. That's interesting that you are doing your dissertation on the okrika trade -- I can't wait to read it.

    I read your blog post and found it fascinating. I was in Yaba just yesterday and walked down a street (Popo Street?) full of okrika vendors who said they were formerly inside the market. They also spill onto the railroad tracks nearby.

    Somehow the market association has been able to negotiate with the authorities to allow them to sell there until the market is rebuilt. Otherwise this kind of street trading would never be allowed in the "new" Lagos.

    ReplyDelete