West African Black Markets Collapse After Nigeria Ends Fuel Subsidy
The recent decision by Nigeria to eliminate fuel subsidies has sent shockwaves throughout West African nations, resulting in the collapse of a thriving black market that played a central role in the region’s economic activity. The abrupt doubling of prices for contraband Premium Motor Spirit, commonly known as petrol, from Nigeria has severely disrupted this informal sector.A report released on Monday by the reputable American news platform, Reuters, highlights the plight of black market fuel vendors and commercial drivers in Cameroon, Benin, and Togo, who heavily relied on smuggled petrol from Nigeria. Since the subsidy removal, their businesses have crumbled, leading to dwindling fuel supplies and long queues at official petrol stations, where prices have become more competitive.In Garoua, a town situated in North-West Cameroon near the Nigerian border, the cost of a liter of petrol on the black market used to hover around 300 CFA francs (approximately $0.48). However, it has skyrocketed to a minimum of 600 CFA francs, causing widespread dissatisfaction among customers who view the exorbitant prices as unjustified.The consequences of this fuel subsidy removal extend to commercial motorcycles, locally known as “okada,” leading to conflicts between hand-to-mouth riders and customers demanding low fares, regardless of the prevailing circumstances. Ousmanou Mal Djoulde, a rider in Garoua, has been forced to more than double his fares, resulting in many customers refusing to pay and his business experiencing a painful slowdown, as reported by Reuters.The trade in black market fuel holds significant significance in the local economy, with authorities often turning a blind eye or even being complicit. A Reuters reporter in Garoua witnessed a Cameroonian customs officer seated on a motorcycle being refueled with smuggled Nigerian petrol, emphasizing the deeply ingrained nature of this informal market.Regrettably, due to the lack of reliable data, the exact volume of fuel being smuggled from Nigeria remains unknown. Mele Kyari, the head of the Nigerian National Petroleum Corporation, admitted that 66 million liters of petrol leave their depots daily, but he was unable to provide an accurate estimate of local consumption. Smuggling is widely acknowledged to be rampant.Benin and Togo, neighboring nations to the west of Nigeria, have also experienced a decline in supplies and customers for contraband fuel vendors, while official petrol stations have witnessed an unexpected surge in activity. At the Hilacondji border crossing between Togo and Benin, several black market fuel stalls have closed, leaving vendors waiting with empty containers, hoping for potential deliveries.In the absence of immediate improvements, some individuals have resorted to seeking alternative livelihoods, such as fishing or engaging in other small businesses. The closure of informal fuel depots has left previously employed individuals without work, exacerbating the already alarming unemployment rate in the region.The United Nations reports that over 80% of employment in Africa is found in the informal sector, making it a crucial driver of economic activity. In Cotonou, the commercial capital of Benin located approximately 60 km from Nigeria, long queues have formed at official petrol stations, and some establishments have struggled to cope with the sudden surge in demand, particularly from commercial motorcyclists, known locally as “zemidjan.”Janvier, a worker at the JNP fuel station in Cotonou, revealed that their daily sales have skyrocketed from around 2,000 liters to up to 7,000 liters. However, the heightened demand has resulted in supply shortages, forcing them to turn away customers in their struggle to meet the increased needs of the local population.