Nigeria throwing away billions of Naira at the Lagos-Seme border

Despite multi-billion naira World Bank upgrades, the Seme Border remains a ghost of its potential as trade restrictions fuel smuggling and drain the national treasury. A visit to the border post paints a gloomy picture of the situation.  For years, Nigeria’s trade policy has leaned heavily on a blunt and increasingly ineffective instrument: the outright […]

Despite multi-billion naira World Bank upgrades, the Seme Border remains a ghost of its potential as trade restrictions fuel smuggling and drain the national treasury. A visit to the border post paints a gloomy picture of the situation.

 For years, Nigeria’s trade policy has leaned heavily on a blunt and increasingly ineffective instrument: the outright ban. 

While intended to protect local industry or curb illegal inflows, the bustling yet burdened Seme Border proves daily that prohibition is rarely the most profitable solution for a nation in need of revenue.

Stretching between Lagos and the Republic of Benin, Seme is arguably Nigeria’s most modern and accessible land gateway.

Recognising its strategic importance, the World Bank recently funded a comprehensive facelift of the border station, transforming it into a model of efficient cross-border infrastructure. 

Beyond international financing, private stakeholders—from logistics firms to regional trade bodies—have invested heavily in bonded terminals, warehouses, and trailer parks tailored to facilitate seamless trade.

The infrastructure is there. The technology is ready. The storage capacity is unmatched. Yet, Seme remains underutilised.

Despite these massive investments, the federal government has maintained a stranglehold on the movement of certain high-demand goods, most notably used vehicles (Tokunbo). 

The official justification is the need to curb smuggling and encourage local assembly. 

However, the reality on the ground presents a stark paradox: diehard smugglers, undeterred by the bans, simply move their operations into the “black market” or through porous coastal routes.

Meanwhile, the country bleeds the very revenue it desperately needs to fund the national budget.

The numbers tell a compelling story. If these restrictions were replaced with a transparent, technology-driven tariff system, Nigeria could collect billions of naira in legitimate import duties. 

These are funds that currently disappear into the pockets of non-state actors or are lost entirely to the Republic of Benin’s economy.

 In an era where the government is scrambling to diversify revenue away from oil, leaving such a lucrative tap closed is an economic own-goal. 

The deeper issue is a lack of strategic flexibility. 

Border management in Nigeria has defaulted to the easiest path: restriction. But in economics, the “easy” path is often the most expensive. 

By failing to weigh the trade-offs—enforcement costs versus revenue potential, and informal smuggling versus formal trade facilitation—the government is undermining the very modernisation efforts championed by its international partners.

The Seme Border should be a beacon of legitimate, revenue-yielding trade for the West African sub-region. 

It has the warehouses, the data collection hubs, and the strategic location to become a primary engine of the Nigerian Customs Service. What it lacks is a policy rethink.

 To fix the economy, we must fix the borders. 

 It is time to move beyond the era of bans and ask a fundamental question: What if the most effective way to stop smuggling is to stop blocking trade and start taxing it efficiently?

 

Dele Akinsola resides in Lagos