Then there is the informal type. Nigeria, for instance, imposes bans on, well, almost everything that is of interest to someone of power in Nigeria. But that does not stop the importation of those things. Importers simply divert the trade to Benin and then smuggle them from Benin to Nigeria. Rice is a particular case in point. In 2007, for instance, a Nigerian newspaper reports that the total import duty on rice in Nigeria came to about 100%, while in Benin it was 38%. In the same year, it was estimated that about 2,000 tonnes of rice was re-exported (smuggled) from Benin into Nigeria per day. If you are a smart importer you simply divert your rice to Benin, pay the import duty – and those guys are pretty well organised so you WILL pay the duty - and then smuggle it into Nigeria. While I was researching these issues in Cotonou in 2008, someone mentioned that she could almost believe that the Beninese government bribes Nigeria to prohibit the importation of some goods into the country so that Benin can make some money off it.
21st Century Authoritarianism
4 weeks ago