Nigeria smuggling threatens local industry and revenue

Bismarck Rewane, CEO of Financial Derivatives Company Limited (FDC), has stated that Nigeria’s future economic growth depends on the government’s ability to close the policy, price, and infrastructure gaps that allow smuggling to flourish.

Speaking at a Lagos Business School breakfast session, Rewane described smuggling as a form of unpriced competition that undermines the formal economy. He noted that while smuggling has decreased, porous borders and persistent price gaps make total elimination unlikely. The depreciation of the Naira is reportedly accelerating the value of smuggled goods across Nigerian borders.

Rewane identified several victims of smuggling, including the government through lost customs revenue and taxes, local manufacturers facing unfair competition, and formal businesses losing market share. He specifically noted that Fast-Moving Consumer Goods (FMCG) and downstream refining are highly vulnerable because they rely on high volumes to offset thin margins. In contrast, the telecommunications, building materials, and pharmaceutical sectors are less exposed to these effects.