Editorial: It Is Time To Protect Nigeria

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President Buhari
President Buhari

In a bid to conserve the nation’s dwindling foreign reserves and salvage the naira from demand pressure, the Central Bank of Nigeria (CBN) recently expanded its list of goods whose importers are barred from purchasing dollars from the official foreign exchange market. The list of such goods include rice, cement, textile and toothpick.
The apex bank stressed that an import ban has not been placed on the 41 items on the list, but that importers desirous of shipping them in would have to obtain forex from sources other than the official window.
We commend the CBN efforts to build up Nigeria’s foreign reserve and save the naira from a free fall via this latest intervention. However, we contend that the apex bank’s policy only treats the symptom and does not address the cause of the malaise. A major reason for foreign reserve depletion and the falling exchange rate of the Nair is the fact that the Nigerian economy has long ago stopped being production driven to become import-dependent. That the price of crude oil has plummeted in recent times only tells half of the country’s sorry fiscal story.
The container economy Nigeria runs on today will only empty our foreign reserves sooner or later, sinking Naira’s value beyond redemption if the country does not take the needed drastic measures beyond merely expanding a list of forex imports ban. We hasten to add that the CBN’s expectation that the expansion of the aforesaid list would facilitate the resuscitation of local industries and boost employment might turn to be a mirage after all. Without being overly pessimistic, we submit that importers of the latest items added to that CBN list have since found a way around the policy to purchase dollars at the official foreign exchange market to continue importing the excluded goods, after all this is Nigeria!
We contend that building up Nigeria’s foreign reserves and raising the value of the Naira require more that the CBN intervention. It calls for a radical and complete U-turn from the import-dependent economy we operate today to a production-centric economy. For far too long, Nigeria has opened up its economy to free trade, no doubt taken in by the sophistry of neo-western economists who tell us this would help local industry grow the requisite muscles to compete on the global stage. The reality, however, is that being in their infant stage at the time Nigeria embraced free trade, indigenous industries stand no chance against their adult counterparts from the developed world, hence the death or comatose state of the manufacturing sector of the Nigerian economy today.
Against the grain of the neo-liberal free trade being promoted by the developed world today, we do not see the way out of the woods for the Nigerian economy if the country does not turn to protectionism. Simply put, Nigeria must first provide massive support and protection for indigenous production.
Those who support free trade with developing countries like Nigeria ostensibly to further our interests are in fact being disingenuous, as they seek only to protect jobs in developed countries. Years of free trade have not helped local industry to grow in Nigeria; they only killed off industries in the country.
The United States (U.S.), Germany and Japan are today leading economies of the World. But from the American Civil War to World War II, protectionism was the policy of the U.S., switching to free trade only in 1945, when most of its industrial competitors had been wiped out by the Second World War. Also, in the late 19th Century, Germany used protectionism to grow its industry. After World War II, Japan also embraced protectionist measures to pull itself up. These nations did not open themselves up to all sorts imports or embrace free trade until their local manufacturers have grown big enough to compete with the outside world.
Protectionism is the way to go for Nigeria and the Nigerian economy now.

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