Food importation: The long journey ahead

Q: With the calls for deregulation and subsequent weakening of local productive base, what future lies ahead of a country that imports almost everything, from tomato to toothpick?

Two economists hardly agree completely on any issue. That is understandable. What you see is determined by where you stand. However, it is not in terms of angle of elevation or depression, nor is it like in the case of two men looking at a rectangular box from opposite sides, with each side having different inscriptions on it. Rather, it is a product of subjectivity or mere conjecture, which is mostly touted as truism and so, disagreements cannot be in short supply.

Their reasons for disagreements are more akin to the case of the fabled six men of Indostan who, from various vantage points, described an elephant from their own personal subjective basis, each saying the huge behemoth was either like a tree, a trunk, a rope, a fan, a wall or a snake. One wouldn’t have faulted their individual conclusions but for the fact that none seemed to have attempted to feel more than just one part each, thus neglecting the others and thereafter bringing conflicting conclusions, and defending his vehemently, with utter disregard of the others’.

Another troubling fact about economists’ common disagreement is the lack of global consensus on the application of certain key indices. The metrics end up being circumstantial in application. Talk of GDP, unemployment rate, purchasing power parity, growth rates in general or specific terms, or even other common macro-economic indices. The various schools of thoughts that either lead to or arise from these variations in practice have become a veritable refuge for some political or economic activists of various persuasions, dishing out ideologies that perplex or confound rather than convince the public. The thoughts about these gladiators arose while reflecting on the economic theories that led us into such a strait as a nation. When the going was so good, we yielded to urge to liberalise imports, including importation of food that we are well placed to produce locally. The country slid gradually into a sorry state that food import bills came in hundreds of billions of naira annually. And, the importation of such staples as rice, wheat, corn and even soy were digging holes in our national treasury, while local farmers could hardly compete, or are discouraged from further production.

The protracted arguments about complete or partial ban on importation of goods into Nigeria are a case in point. After Nigeria went back and forth, since 1986, it should have been able to situate the argument in proper context and reflect the national interest. We should, at this point be reflecting honestly on how a stop-gap decision to import petrol to deal with some emergencies ultimately became an entrenched national policy, costing Nigeria trillions of naira over many years to date. The same applies to how sugar importation led in part to the closure of two promising local sugar companies (Savannah and Bacita) in Nigeria.

The same stop-gap argument is responsible for the massive assorted food importation such that foreign business interests, operating with local collaborators, began various ingenious methods of persuading the government to allow the importation of certain products into the country. One of the most ridiculous of such ingenuities was that of a cooking oil producer from Asia that wanted to bring their products into Nigeria under the guise of setting up local production, while surreptitiously setting up a tank farm in the neighbouring Benin Republic, which would have driven local investments in cooking oil business into certain perdition. It took a stubborn will of the government, operating in cooperation with local producers to force the hands of these importers back. They were operating under free trade argument, but the local producers wouldn’t have been able to compete.

I hear some foreigners say that Nigeria is one of the best places to invest. This is not in a positive sense of doing things right, but rather an arbitrary situation that permits briefcase business interests, who dump all manner of imported goods that can be produced in Nigeria, thus robbing the country of opportunity to produce locally as unfair competition is set off. The business of rice proves a point here. Failure to see the opportunity cost of banning or restricting imports, and the extent of capital flight that goes with import is largely responsible for the high decibel clamour for import liberalisation, mostly by foreign investors, operating through indigenous proxies.   I had to pick up, and read again, a document prepared in 2004 by three consultants titled “Policy and Institutional Framework for Import Bans in Nigeria,” where the hidden hands of a private sector advocacy group were clearly evident at the background. According to the document, “The work was commissioned by the Nigerian Trade Network (NTN) with support from Oxfam GB, the Nigerian programme. NTN is a coalition of national organisations working on trade and trade-related issues in Nigeria, with a view to mainstreaming trade in the national development strategy, while pursuing global economic justice and poverty reduction through the instrumentality of trade.”     The document made spirited argument for opening the floodgate of Nigeria for foreign imports, with a parched argument that foreign imports created about 65 per cent of jobs in the country as at then. The advocacy group, known as National Association of Nigerian Traders (NANTS), which made categorical statements in the publication, wanted import regulation levers broken so all types of foreign goods can come in. Their position was that import ban was leading to some kind of unemployment for importers.     The president of NANTS (the only one known then and now) posited that importation was good for Nigeria. The argument showed clear oblivion (or deliberate denial) that Nigeria gradually slipped from being a producer nation to an importing and trading nation, a situation that does not bode well for the country at any time. While the prevailing singsong was that of deregulation of almost everything, a doctrine that was promoted by the proponents of Structural Adjustment Programme (SAP), the motive was not grasped by those who played the instruments to the music.     The proponents of unrestricted importation were not trained in the school of thoughts of the likes of Jeffrey Sachs, Nobel laureates and erudite Paul Krugman and Joseph Stiglitz, or of Ha-Joon Chang, author of a book called “Bad Samaritans.” It is on record that Joseph Stiglitz committed the sin of propagating the views that unregulated markets did not produce economic efficiency or social justice. His criticisms and dissent regarding World Bank globalisation policies was portrayed as rebellion, which led to his sack from office as chief economist of the global financial institution.     Now that global oil fortune is down, the reality of the hollowness of NANTS (and NTN’s) disposition has dawned on us. Stigltz and his co-travellers have just been vindicated in out circumstance. How does a struggling nation survive under unfair and unhealthy competition? With the calls for deregulation and subsequent weakening of local productive base, what future lies ahead of a country that imports almost everything, from tomato to toothpick? Now that the reality of importation of food has become rather dim, how will Nigeria cope? What policy options do the promoters of importation have on the table that we may have to consider in the present circumstance?   It is now clear that the laissez faire doctrines that underpin the arguments in favour of unbridled importation has suffered a terrible setback in Nigeria’s case and may need to be jettisoned, at least for the time being until we are able to produce to feed ourselves and have extra for export, then we could embrace the liberalisation ideas once more when we could compete on a level playing field. It does not matter what free trade proponents say. Nigeria comes first.

Olukayode Oyeleye 

 

 Dr. OlukayodeOyeleye is the Special Adviser to the minister of Agriculture