Why Does Nigeria Keeps Killing the Goose -By Kator Ifyalem

The Guardian published a recent piece, Nigeria records more international passengers than Ghana. Yet more travellers are choosing to fly out of Accra.

That single fact is not an anomaly. It is a diagnosis.

Look closely enough at Nigerian sectors, aviation, ports, the currency market, manufacturing, and you find the same disease: short-term extraction dressed up as revenue strategy, until the host collapses and the extractors are left holding nothing.

Aviation: taxing the passenger off the plane:
Nigerian airlines currently contend with over 50 separate charges, taxes and levies spread across four agencies, NCAA, FAAN, NAMA and FIRS. Only a handful are visible on the ticket; the rest are quietly built into fares.

The comparison with Accra is not abstract. Industry figures put the international passenger service charge in Ghana at around $60, against roughly $100 in Nigeria. Add up the full stack of charges on a Lagos to Accra return ticket and you land near $116–$185 in taxes alone, before fuel, ground handling or the airline’s own margin enters the equation. A new $11.5 security levy added in December 2025 pushed the security-related charge on international tickets to $31.50, on top of everything else.

The result is visible in the West Africa regional data: passengers here pay an average of $109.5 in departure charges per international ticket, the highest of any African sub-region, against $30–$34 in Europe. IATA has now named Nigeria among a small group of African markets, alongside Ghana, Kenya, Angola and DR Congo, where aviation charges sit above global norms.

Airline executives describe routes where a full flight still nets close to zero profit once every agency has taken its cut. Each regulator optimises for its own line item. None of them is pricing for a market that keeps flying. The cumulative effect: travellers route through Accra, Lomé and Cotonou instead, airlines shrink their Nigerian schedules, and the same agencies chasing revenue end up taxing a smaller and smaller base.

Customs: the duty that exports its own tax base:
The pattern repeats at the ports. When import duty and the exchange rate used to assess it rise faster than the market can absorb, importers don’t stop importing, they reroute.

The 2014 hike in vehicle duty (35% duty plus a 35% surcharge, against roughly half that at Cotonou) is the textbook case. Government’s own Customs leadership eventually admitted the tariff had achieved nothing for local auto assembly after decades, while driving high volumes of vehicles through Benin Republic instead, with one estimate putting the annual revenue loss from diverted auto imports alone at around ₦200 billion. Manufacturers’ associations have made the identical argument about port charges and customs levies more broadly: every increase pushes cargo toward more competitive regional ports, encourages under-declaration and smuggling, and shrinks the compliant, tax-paying base that legitimate businesses represent.

The irony writes itself. The charge exists to raise revenue. Set high enough, it guarantees less of it, while quietly building an entire parallel economy of border smuggling that pays the treasury nothing at all.

Forex: round-tripping the currency into the ground:
If aviation and customs show public agencies extracting until the base moves elsewhere, the foreign exchange market shows the same logic running through private actors with a licence to touch the currency.

Bureau de Change operators were created to help ordinary Nigerians access retail dollars. The number of licensed BDCs grew from 74 in 2005 to 5,689 by 2021, a scale the retail-FX rationale never justified. At one point the CBN was selling $20,000 a week to each of over 5,000 BDCs, roughly $100 million weekly and $1.57 billion a year, ostensibly to meet small ticket demand. Regulators eventually concluded that a large share of that flow was instead being round-tripped: bought at the official or CBN allocated rate and resold into the parallel market at a markup, with some deposit money banks alleged to be running the identical trade at their own window. The CBN cut off FX sales to BDCs entirely in July 2021, citing exactly this abuse.

The naira paid the price. The gap between official and parallel rates widened for years, at one point exceeding ₦400 on a single dollar, before reforms briefly narrowed it, only for the currency to keep sliding toward ₦1,550 and beyond. Every round-trip is individually rational: buy low at an administered rate, sell high on the street, pocket the spread. Multiplied across thousands of operators and a few complicit desks, it manufactures the very scarcity and instability that then justifies the next round of capital controls, which creates the next arbitrage opportunity. The traders profit on the way down. The currency, and everyone holding naira denominated income absorbs the cost.

Manufacturing: profit today, industry tomorrow:
The textile industry in Nigeria is the starkest version of this story. In the mid 1980s it was the third largest in Africa, running over 700,000 spindles across roughly 175 mills and directly or indirectly supporting an estimated 17 million Nigerians. By the 2010s, all but 25 of those mills had shut. Employment fell from 350,000 to under 25,000.

The causes are well documented, an import ban that created a thriving smuggling economy instead of stopping one, counterfeit “Made in Nigeria” fabric flooding in from Asia at a fraction of local cost, erratic power forcing mills onto diesel, and interest rates north of 30%. But industry insiders and union leaders point to something more deliberate underneath the policy failures, well connected importers who profited handsomely from bringing in cheap, often smuggled fabric, even as it hollowed out the very industry that had employed their neighbours. The World Bank estimated smuggled textile imports through Benin at $2.2 billion a year, against local production that had shrunk to $40 million.

Nobody planned to destroy the industry. Enough people simply chose their own margin over its survival, transaction after transaction, until there was no industry left to profit from.

One architecture, four sectors:
Different regulators, different products, same design flaw, every actor, state agency, importer or currency trader, treats their slice of the system as a cash cow to be milked immediately, rather than an asset to be grown. Nobody is pricing for the long game. Everybody assumes someone else will keep the base alive.

The base does not stay alive. It moves to Accra, to Cotonou, to a Chinese factory undercutting the local one, into a parallel market spread that no productive activity ever touches, and takes the jobs, the tax revenue and the strategic capacity with it.

This is not a call for sentimentality over commerce. It is a question about time horizon. What would it take, in aviation, at the ports, in the forex market, in manufacturing, and everywhere else this pattern shows up, for extraction to be paced to what the system can actually sustain?