The decision of Nigeria to abolish fuel subsidies has had a profound impact on the region, resulting in the collapse of a thriving black market in several West African countries. The elimination of subsidies has disrupted the informal sector, which played a vital role in the economic activities of these nations. The sudden doubling of prices for smuggled petrol from Nigeria, known as Premium Motor Spirit or PMS, has had severe consequences for black market fuel vendors and commercial drivers in Cameroon, Benin, and Togo, who heavily relied on these illicit supplies.
According to a recent report published by Reuters, the subsidy removal has caused the downfall of businesses in these countries, as fuel supplies dwindle and long queues form at official petrol stations, where prices are now competitive. In Garoua, a town in North-West Cameroon near the Nigerian border, the cost of a liter of petrol on the black market has surged from around 300 CFA francs (about $0.48) to a minimum of 600 CFA francs, leading to discontent among customers who view the high prices as unjustifiable.
The repercussions of this subsidy removal extend to the commercial motorcycle sector, locally referred to as "okada," resulting in conflicts between struggling riders and customers demanding low fares regardless of the circumstances. Ousmanou Mal Djoulde, a rider in Garoua, has been compelled to more than double his fares, causing many customers to refuse payment and leading to a significant slowdown in his business.
The trade in black market fuel holds such significance in the local economy that authorities often turn a blind eye or are even complicit. In Garoua, a Reuters reporter witnessed a Cameroonian customs officer refueling his motorcycle with smuggled Nigerian petrol.
Unfortunately, reliable data on the volume of fuel being smuggled from Nigeria is lacking. Mele Kyari, the head of the Nigerian National Petroleum Corporation, acknowledged that 66 million liters of petrol leave their depots daily, but he was unable to provide an accurate estimate of local consumption, highlighting the rampant nature of smuggling.
Neighboring countries Benin and Togo have also experienced a decline in supplies and customers for black market fuel vendors, while official petrol stations have seen a sudden surge in activity. At the Hilacondji border crossing between Togo and Benin, some black market fuel stalls have closed, leaving vendors waiting with empty containers for potential deliveries.
In the absence of any improvements, some individuals have sought alternative livelihoods such as fishing or engaging in other small businesses. The closure of informal fuel depots has left previously employed individuals without work, further exacerbating the already high unemployment rate.
