Nigeria: The Rise of Economic Nationalism by John Madaye

Nigeria: The Rise of Economic Nationalism by John Madaye

Faced with multiple economic challenges ,the Nigerian government may have concluded that drastic measures are needed to grow the economy beyond conventional prescriptions of Bretton Woods institutions.The new policy thinking emerged even before the recent national election as the Muhammadu Buhari administration had rejected proposed loans from the International Monetary Fund to bail out the economy.

Most observers had focussed on recent border closure but the action was just a signal of a broad policy shift. The administration appears to have concluded that elements of economic Nationalism may be needed in the short or medium term to address the structural deficiency in the national economy.The reality of the malfunctioning economy is that it is heavily burdened by importation with very low exports.The nation imports virtually everything including toothpicks among others.This deplete the treasury and drain up fund badly needed for development of national infrastructure and social services.

This realisation seems to have excited the thinking of restriction on import to ensure local production ,thereby savings the scarce foreign earnings.Quite strangely,the Central Bank of Nigeria originally spearheaded the new policy move before it spreads as a national goal.The CBN in several landmark actions restrict forex for importers of food items such as milk,palm oil and rice. Fund was then advanced to local firms that are ready to produce locally to stop massive importation that has been the bane of the economy.

The policy later developed into full blown physical restriction in form of border closure and raid on auto marts in Lagos and Abuja. Of all the manifestations of nationalism in the management of the economy ,the border closure is the most controversial.The government was able to establish that 90 percent of rice and automobiles importation into Benin republic are destined for Nigeria through smuggling.This fact was not controverted by Benin and other Nigerian neighbours.Breaking the cycle of sabotage is therefore considered a national security issue by the Nigerin leadership.

Reality is that Nigeria has openly send signals to the African Union that the continental free trade wont be a licence to turn Nigeria into a dumping ground. It is also a clear warning to Nigerian neighbours that the father Christmas of the old is no longer ready to accept explotation and destruction of her economy.

The shift has not been without attacks from regional bodies. The Economic Community of West African States had warned of violation of the community treaty by the continued closure. The Aftican Union had also signals displeasure at the action at a time the continent is preparing for a free trade zone. 

But a major endorsement came from the west with top officials of the World Bank and the International Monetary Fund conceding that Nigeria has the right to manage the border to stop smuggling and other economic sabotage.

Nigerian government has now provided further proof that her action was justified.Since the closure of the border ,government says it has seized over N2.3tn worth of contraband as a result of the intensive joint border patrol by security agencies.

The exercise, code-named Exercise Swift Response, is being coordinated by the Office of the National Security Adviser and the team comprises the Nigeria Customs Service, the Nigeria Immigration Service, the Nigeria Police Force and the Nigerian Army.The spokesperson for the Joint Border Security Exercise and National Public Relations Officer, Nigeria Customs Service, Joseph Attah, listed the seized items to include guns, ammunition, rice, vehicles, drugs and jerrycans of petrol.

 Attah said the joint border security, consisting of all the agencies working together, had recorded some achievements, while the NCS as a separate entity had recorded some feats as well.

“The worth of the seizures as of October 30, 2019 is N2,309,336,000,880. This is the cumulative sum of the various seizures.”
According to him, some of the items seized are “437,225 jerrycans of Premium Motor Spirit, popularly known as petrol, 363 vehicles, 32,814 bags of rice as well as several drugs, ammunition and guns.”

He added that 203 illegal migrants and eight traffickers had also been arrested.

Border closure’ll tackle all security challenges – CBN gov
Meanwhile, the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, says if the closure of the border is sustained for the next two years, it is capable of tackling all the security challenges currently being experienced in the country.

Speaking at the first convocation lecture of the Edo University, Iyamho, on Friday, Emefiele stressed that issues of insurgency, banditry and kidnapping would be totally eradicated if the closure is sustained.

He added that if the youth in these vices were gainfully engaged in meaningful activities, the insecurity would reduce to the barest minimum.

The governor, while responding to questions after his lecture titled, ‘The role of monetary policy towards economic growth in Nigeria,’ said, “I can tell you that if our borders remain closed for two years, the issue of Boko Haram, kidnapping, banditry and ‘Yahoo-Yahoo’ (Internet fraudsters) will stop.

“CBN will promote this policy by making sure that we produce what we consume and eat what we produce.”
While decrying the actions of some neighbouring countries which he said was not helping matters, Emefiele vowed that the apex bank would not allow the country to be used as a dumping ground for smuggled goods.

The apex bank governor explained that instead of some neighbouring countries to develop policies to grow their own economies, they engaged in things that undermined the Nigerian economy.

He said when Nigeria as a country increased import duty on rice to discourage importation, such countries reduced their duties to get rice importation to be smuggled into Nigeria.
“We no longer want what they are importing to our country because we can produce them and CBN will do everything possible to promote domestic products,” he added.
Emefiele challenged youth and old to go into agriculture because it was one of the major ways to grow the economy.

Border closure is beyond food smuggling-Finance Minister 

Nigeria’s decision to close its borders is aimed at preventing weapons and drugs from entering the country and not just to stop food smuggling, Finance Minister Zainab Ahmed said.
In August, Nigerian President Muhammadu Buhari ordered the partial closing of Nigeria’s boundary with Benin to curb smuggling of rice, a staple. His administration further clamped down in October by restricting the trade of all goods across the land borders to curb smuggling from Benin and Niger into the continent’s most-populous nation.

It’s not only about illegal food shipments, Ahmed said Friday in an interview at the International Monetary Fund annual meetings in Washington.

“It’s also about security because that’s how ammunition comes into our country and that’s how drugs that are destroying our children also come into our country,” she said.

The initial shutdown of the Benin border has already caused food inflation in Nigeria to accelerate for the first time in four months, pushing up the headline number. The restriction came only two months after the countries signed up to the African Continental Free Trade Area, which targets greater economic integration through the removal of trade barriers and tariffs.

The continent-wide free-trade pact makes it even more important for countries to respect each other’s trade regulations, Ahmed said. Customs and securities agencies from Nigeria, Benin and Niger are in talks about the future reopening of the borders, she said.
“It’s about sanitizing the borders, getting our neighbors to conform with the commitments that we’ve signed onto.”

Why Border Remain Closed -Custom Chief

The Comptroller-General of Nigeria Customs Service, Col Hameed Ali (retd.), had earlier said that the closure would be sustained until neighbouring countries complied with the ECOWAS protocols on transit of goods.

He stressed that the closure of the border by the Federal Government was undertaken to strengthen the nation’s security and protect its economic interests.

Ali, at a meeting with border stakeholders, comprising freight forwarders and security agencies at Seme, said the closure was not intended to hurt anyone but to protect the nation’s interests.
He said, “Our interest is to make sure that our country is secure, the well-being of our people is ensured and our economy is secure. The step we have taken is in the interest of Nigeria; the step is not to hurt anybody but to protect our own interests as a nation.”

President Muhammadu Buhari had not hidden his desire to sanitise the border.He recently  called on Nigerians to continue to patronise locally-made products and services to grow the nation’s economy.He stated the Federal Government was committed to its mandate of providing assistance that would guarantee the growth of the Micro, Small and Medium Enterprises. The fair is to run till November 10 at the Tafawa Balewa Square.

News Agency of Nigeria quoted the President, represented by the Minister of State for Industry, Trade and Investment, Mrs Mariam Katagum, as saying, “I want to use this opportunity to reiterate my call for Nigerians to patronise made-in-Nigeria products and services.

“We must accept our new reality of promoting locally-made products as it is evident that this is where our New Nigeria will be realised. That is why I have constantly emphasised that we must be a nation where we grow what we eat and consume what we produce.

“This has wonderfully led to a massive nationwide agricultural re-awakening which without a doubt remains our most viable option for economic diversification as a government and nation.”

Meanwhile ,neighbouring nationa are feeling the heat.

Benin republic is hard hit but observers noted that the country has not treated Nigeria well.

Akufo-Addo recently expressed hope that talks between his country and Nigeria over the closure of the land borders would yield a positive result.

“There is a lot of room for continuing talks between Nigeria and Ghana in order for a breakthrough to be reached,” he added.

Beyond the attendant challenges ,Nigeria has clearly taken a path of nationalism. Experts are however worried that unless the policy shift is properly managed ,the nation may not reap much benefit.

But what is happening internationally when it comes to economic nationalism. ?

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