Nigeria’s next stage of economic growth will depend partly on its ability to make legitimate cross border commerce more competitive than smuggling, according to Bismarck Rewane, chief executive of Financial Derivatives Company Limited. Speaking at a Lagos Business School breakfast session on the economic consequences of smuggling, Rewane said the activity flourished where differences in prices, customs duties, exchange rates and the cost of transporting goods created profitable opportunities for informal traders. He argued that smuggling was not merely a border enforcement problem. It also reflected weaknesses in domestic infrastructure, trade policy and the conditions under which formal businesses operate.
Rewane identified textiles, consumer goods and refined petroleum products as particularly vulnerable. Manufacturers in these sectors depend on large sales volumes to cover substantial operating costs, making competition from untaxed imports especially damaging. Government also loses customs duties and other revenue, while consumers face the risk of unsafe or substandard products that bypass regulatory inspection. Citing Nigeria Customs Service figures, Rewane said the reported value of seizures increased from N17.56 billion in 2023 to N35.29 billion in 2024 and exceeded N59 billion in 2025. He noted that the number of seizures declined in 2025 even as their reported value rose, a pattern he associated partly with currency depreciation and the higher naira value of contraband. He cautioned that seizure values alone did not establish the total scale of illegal trade. Nevertheless, porous borders, established informal networks and price differences with neighboring countries meant smuggling was unlikely to disappear through enforcement alone. Among the measures he advocated were more predictable trade rules, improved infrastructure, narrower differences between formal and informal import costs and policies that support a stronger, more stable currency. Rewane also highlighted opportunities under the African Continental Free Trade Area and regional trade arrangements. Reducing the cost and complexity of lawful trade could remove some of the incentives that drive businesses and consumers toward illicit channels. Although smuggled goods can appear cheaper in the short term, the longer term consequences include reduced investment, pressure on local employment, weaker public revenue and safety risks associated with illicit fuel transport and products of uncertain quality
