Despite the low officially reported trade flows, a substantial amount of reciprocal trade exists between Cameroon and Nigeria. The reasons for the limited reflection of these trade flows in official statistics can be found in the large underreporting of the value and volume of trade, as well as some smuggling. But most of the discrepancy arises from trade that passes official border crossings but is not recorded in its entirety. It is consequently not illegal, but rather informal.
Most trade between Cameroon and Nigeria takes place along 10 major corridors, both inland and on the coast. These cross-border corridors are linked in with domestic transport networks in each country, often covering long distances. Seven of these corridors are situated in the northern part of the border, two in the West, and the last corridor covers products that are transported by sea. Map 1 gives a geographic overview and Annex F provides additional details on the corridors.
Map : Overview of major corridors for cross-border trade
Most traffic in the north (Far-North and North Regions) flows along the corridor from Maiduguri to Kousseri or Maiduguri to Maroua. While the former serves mainly as a transshipment route to Chad, but is largely impassible during the rainy season, the later serves as major supply to the Extreme North. Other important corridors are running from Mubi to Guider and from Jimeta/Yola to Garoua. The infrastructure on all of these corridors is in extremely bad state. With the exception of Limani on the Maiduguri to Maroua corridor, and Fotokol on the Maiduguri to Kousseri corridor, no bridges over border rivers exist.
Trade in Western Cameroon (North-West and South-West Regions) mainly flows along the Onithsa/Enugu-Bamenda corridor, which is being rehabilitated by the African Development Bank with support from the World Bank by 2014. Currently, road conditions on the Nigerian side are generally good, while large sections of the road from Ekok to Mamfe and Bamenda on the Cameroonian side are in very bad condition and are virtually impassable during the rainy season. Among other things, the rehabilitation project will develop or reconstruct the road and two bridges, carry out periodic maintenance of 192 km of road, remove obstacles to the free flow of traffic by building a joint border post, limiting the number of checkpoints, and controlling axle load.22 However, the component on removing obstacles and simplifying procedures at borders seems to be less developed than the physical reconstruction. Some traffic also flows from Enugu via Abonshie to the north of the Western region. Roads here are also in very bad state and no crossing at the border river exists.
Trade by sea between Cameroon and Nigeria mostly passes through Tiko/Limbe – Calabar and Idenau – Oron. Once goods have cleared customs in Limbe, Tiko, or Idenau, most are transported by road to Douala. This sea-road corridor has the advantage that it is relatively fast and secure, and large shipments can be made at one time, e.g., a ship carrying fifteen to twenty 20-ton trucks per trip. Ships often operate twice a week and work on a set schedule. There is only limited bilateral trade through Douala port, largely because of the high cost of clearing customs there, as traders claim.23
Magnitude of Existing Trade Flows
We estimate that Nigeria exports more than 213,000 metric tons of non-oil products with a value of 769 million USD to its neighbor annually, more than forty times official estimates. Of these, USD 176 million is estimated to be products made in Nigeria. Even assuming that official statistics exclude re-exports, our estimates still find Nigerian exports to be more than twenty times larger than what official Cameroonian import statistics report.
While Cameroon’s non-oil exports are generally lower in both volume and value, we estimate them to be worth about forty times more than official estimates. This study estimates that Cameroon exports about 160,000 metric tons of goods annually, with a value of 226 million USD, of which USD 62 million comprises products made in Cameroon. Again, assuming that official statistics exclude re-exports, our estimates put Cameroonian exports to be about forty times larger than official Nigerian estimates for imports from Cameroon.
According to official estimates, non-oil imports from Nigeria to Cameroon are important compared to the much smaller CEMAC region, while non-oil imports from Cameroon into Nigeria are negligible compared to imports from West Africa. Putting our estimates into perspective to official estimates, Table 2 demonstrates the huge discrepancies between official and unofficial statistics.24 It also shows that according to official statistics, Nigeria’s imports from Cameroon are only about 2.4 per cent of imports from the ECOWAS region, while Cameroon’s imports from Nigeria are equal to about 1.1 percent of imports from CEMAC. However, comparing our estimates, which include informal trade, to formal trade statistics makes these flows look extremely large. However, they would have to be rightly compared to similar estimates for cross-border trade within each bloc which do not exist. Petroleum exports from Nigeria to Cameroon dwarf non-oil trade while there are also petroleum exports from Cameroon to Nigeria, but this study focuses on non-oil trade.
Table : Official data and estimates for bilateral non-oil trade flows
Sources: COMTRADE data, using import data and averages for 2008-2010, where available; own estimates
This substantial discrepancy is largely the result of the way in which customs duties are actually applied and the corresponding values customs officials report. What is often described as ‘illegal’ trade effectively is trade that is openly undervalued, in a process that is known to all involved stakeholders. Because imports are cleared depending on the size of the truck, rather than the value of the goods, as directed by regional customs offices, customs declaration forms reflect values that correspond to payments made. This report describes the methodology in greater detail below in the section on customs procedures at the border. It reveals that existing customs valuation methods significantly undervalue both the volume and value of cross-border trade.
Even though the observed trade values are significantly above those reported in official trade statistics, the potential to expand trade flows seems to remain significant, particularly for exports from Cameroon. Estimates of a simple gravity model with a large number of control variables suggest that the trade potential for exports from Cameroon to Nigeria is two to three times higher than what we estimate. At the same time, exports from Nigeria seem to be higher than the estimated potential, possibly reflecting geographic factors of remoteness that the gravity model might not fully capture (see appendix) in estimating the potential.
