Cross border trade in grain between Nigeria and neighbouring Niger: Risk management assessment along Sokoto Illela-Konni border land

Abstract

Grain is an important marketable commodity that is hampered by risk of interrelated dimensions, particularly in borderlands of West Africa. Assessing the extent of risk in borderlands can be valuable for policy-makers and likely to contribute to increased regional trade through effective management. Risk management along the grain supply chain was investigated. The methodology was qualitative using desk review of literature and field survey and interviews. While the survey revealed evidence of substantial volume of grain exchange, most of the traders indicated transportation, high taxes and low production of grain as the most important risk factors limiting trade. Production was found to be limited by low access to agricultural insurance, fertilizer, irrigation and credit. Although farmers had access to production information, market information was inadequate. While public grain reserve exists to manage price risk; the capacity was insignificant compared to the magnitude of grain trade in the region. The guaranteed minimum grain price was not collectively determined but by government and their contractors.

Keywords:

• regional trade
• food security
• risk
• value chain
• borderland
• grain production

Public Interest Statement

Grain staple is an important marketable commodity within and between member countries of the Economic Community of West Africa States (ECOWAS). It constitutes a large share of farmers’ incomes and poor consumers’ expenditure. Despite long standing efforts of the Economic Community of West African States for increased regional trade, small farmers and traders are faced with uncertainty and risk in the region that includes sudden changes in output and input prices, production short fall from natural hazards, asset risk from death in livestock and institutional risk from changes in programmes and personal characteristics. Regional trade is an important channel for food security and should be promoted in the phase of international food price volatility and global climate change.

Acknowledgements

The study acknowledges constructive comments from participating researchers during the methodological workshops at LASDEL (Laboratoire d’Etudes et de Recherche sur les Dynamiques Sociales et le Développement Local, Niamey).

Notes

1. Ever since the ECOWAS treaty, a number of development and negotiations have followed in the last 3–4 decades. First is the revision of the treaty drawn up by an ECOWAS Committee of Eminent Persons in 1991/1992, and signed at an ECOWAS summit conference in Cotonou, Benin Republic, in July 1993. Thus giving rise to a reinvigorated advancement of a common market and a single currency, establishment of a West African Parliament, an Economic and Social Council and an ECOWAS Court of Justice. In 1994, a monetary union of the Francophone member countries in the region known as the Union Economique et Monetaire Quest-Africaine was formed. This meant a common convertible currency in (CFA) for the member states in UEMOA of ECOWAS. The countries are Benin, Burkina, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal and Togo. Other notable achievements include the adoption of ECOWAS passport/travelling documents, a Free Trade Area for unprocessed agricultural products was taken in 1980, and the signing of the Protocol on Non-Aggression and Mutual Defence Assistance took effect in 1981 and a common traveller’s cheque entered into circulation, a veritable asset for intra-regional trade promotion and, at the same time, a major step towards the realization of a single monetary zone (Eboh et al., 2004). Other progress includes the Common External Tariff (CET), regional agricultural policy alignment (ECOWAP) and the EPA negotiation with the European Union. ECOWAP was adopted in 2005 in Accra by the Heads of State and governments of the region. The aim is to have a common agricultural policy for the region that will enhance agricultural productivity and food security. ECOWAP is the regional version of NEPAD’s Comprehensive Africa Agriculture Development programme endorsed by the African Heads of State at the Maputo Summit in 2003. There is also the cross-border trade initiative programme (CIP) officially launched in 2004. CIP is a tool to facilitate the implementation of locally driven cross-border cooperation initiatives in all of the West African cross-border zones. That is an initiative, whereby states and local communities are directly involved in cross-border cooperation operations by relying on their expertise within the limits of the internal laws of each member state. One of such initiative is the cross-border corridor Kano-Katsina-Maradi in Nigeria launched in 2007.

2. ECOWAS comprises 15 countries of the West African sub region that include Cape Verde, Gambia, Ghana, Guinea, Liberia, Nigeria, the Sierra Leone, Benin, Burkina, Ivory Coast, Guinea Bissau, Mali, Niger, Senegal and Togo.

3. By article 12 of the ECOWAS treaty a customs union of the member-states will emerge within 15 years from the definitive entry into force of the treaty.

Additional information

Funding

This study is as a result of the financial support from CSFRS (Conseil Supérieur pour la Formation et la recherche Stratégique) and AFD (Agence Française de Développement) to IFRA—Nigeria for a sociopolitical Risks research study between Nigeria and Niger.

Notes on contributors

John Chiwuzulum Odozi

John Chiwuzulum Odozi holds a PhD in agricultural economics and a fellow at the French institute for research in Africa, University of Ibadan. His research activity includes risk, vulnerability, migrant remittances, income inequality, environment and governance. His research explores how the environment, socio-economic factors and policy interact with income growth and food security in Africa. This paper emerged from the collaborative study of risk assessment in the border region between Nigeria and Niger. The project was divided into three sub-themes: (1) assessment of faith-related risk; (2) assessment of risks related to the fragile state of the public sector at the level of infrastructures, border control and food security; and (3) assessment of risks in the context of migrations and extreme poverty. This paper looks at the effectiveness of institutions in the management risk related to grain production and cross-border trade in the region.