Buhari’s economic policies: a tilt from globalization by Johannes Wojuola

President Muhammadu Buhari’s determination to boost the nation’s economy does not seem to click with the tenets of globalization of trade as enunciated by the Western world. This is because the West, including the neo-liberalist and the Brettingwood philosophers, see the peculiar nature of the approach as theoretical.

The conclusions by both groups is based on their penchant for a free market space, unfettered by government inhibitions and stringent policy controls. They also look for opportunities for the dumping of all sorts of goods, especially, sub-standard and fake products.

Although globalization favours free market space, the reality is that the Nigerian milieu objects to such position on grounds that it prefers to avoid the luxury of the now for investment in the future.

One flaw noticed in the free market clause is that it brings together countries that are unequal in terms of competition of goods and services in the market place as there is no level playing field for such activity. Big economies have been found to always dominate the smaller economies on issues concerning international markets and such is achieved through capitalist and free-trade policies.

For instance, the Brettingwood school of thought favours the devaluation and the free float of the Naira so that the currency loses value against the Dollar. They also support the flooding of the Nigerian market with foreign goods in order to make profit at the expense of the Nigerian producer.

Evidence has shown that globalization does not create symbiotic relationships between unequal countries. It rather fosters the bigger above the smaller.

Studies have shown that each country that achieved industrialization has at some point adopted some form of economic nationalism or the other which involves the application of initiative, policies to protect, encourage and promote local efforts targeted at development and growth. 

England, China and the United States are popular examples. At some point, they introduced policies that asserted control on their local economies through the imposition of tariff and the restriction on the movement of goods. All these were geared towards boosting their industrial productivity and tapping into resources that had become fallow.

These same countries constitute the present day beneficiaries of globalization because they had looked inwards and produced what they consumed, placed priority on the development of local industries, patronized locally manufactured goods and enforced laws that protected their local markets from cheaper imported goods. Having satisfied local demands, their industries went further to produce for export which opened the doors for foreign exchange earnings. 

Based on the foregoing, one wonders why Nigeria’s economic nationalism should be viewed differently by the same West.

Despite the antics embedded in globalization, Nigeria has opened its eyes to see the gaps in the arrangement and the attendant conspiracies and has therefore decided to act in its best self-interest to get things right by tinkering with its contents and demands.

To achieve the feat, the Buhari administration has not dumped globalization agenda in its entirety, rather it only on focused on striking a balance between economic nationalism and globalization. This has been done by simply allowing the free inflow of goods that are indispensable based on the fact that they are not produced in the country, while restrictions are placed on luxury items that starve and weaken local entrepreneurship and production.

Nigeria spent $2.4 billion on the importation of rice between 2012 and 2015. When the present administration came into office it delisted rice from the government’s foreign exchange window. The decision has saved Nigeria about $5 million daily. 

By the end of 2017, a total ban on the importation of rice would be effected. Government action on rice has already boosted local production such that farmers would be in a position to satisfy local demand by the time importation of the commodity is struck out of the import list. It is a win-win situation because the consumption of local rice is fast becoming the norm, while the local producers are smiling to the banks.

Apart from rice, the Buhari administration also placed a moratorium on the provision of Foreign Exchange by the Central Bank for the importation of 41 items. These items ranged from cement, palm oil, meat, furniture, toothpicks, soaps and cosmetics, tomatoes, tomato paste to textiles.

The items made the prohibition list because the raw materials for their production and even the finished products are readily available in the local markets. Like the experience in rice, local producers of the items have sprouted across the country and they are in business. 

For Nigeria’s fledgling industries and manufacturing sector to grow, an environment for their success must be created by closing the borders to stop the importation of foreign alternatives. 

The imposition of higher tariff on imported automobiles is beginning to yield dividends as more automobile assembling plants have started investing in Nigeria. So far, 22 automobile companies including Honda, TATA and Toyota are on the list of such companies.

The revival and rehabilitation of local refineries and the construction of new ones through private initiatives have given the government to confidence to announce a plan to stop the importation of fuel in 2019 when the refineries are expected to produce at full capacity.

In summary, economic nationalism, coupled with protectionism is needed for Nigeria’s industrial and economic growth. The nation requires some break from globalization in order to put its acts together and look inwards to identify areas of comparative advantage in the production of goods and provision of services.

If this is not done, Nigeria will remain a perpetual consuming nation, while targets set to attain the status of a producing nation or economically independent country will continue to be a mirage

Globalization is a blessing and a curse. For Nigeria, the realization that there must be a balance between economic nationalism and globalization remains the way to go. Based on the premise, globalization is the hope for tomorrow even though it is by application, the curse of today for Nigeria.

Johannes Wojuola wrote this piece from Abuja. Follow him on twitter via @Johannxs

Source: dailytrust.com.ng