Few things have irked President Muhammadu Buhari more than the fact that Nigerians import toothpicks. The president has often expressed barely disguised puzzlement that Nigerians are importing this supposedly superfluous item. Recently, he told journalists:“The biggest shock is when I asked the Governor of the Central Bank what we have been buying with foreign exchange, and it’s all food items, beginning with toothpicks”. President Buhari appeared mystified that “Nigerians are so sophisticated that they use only Chinese toothpicks”, saying, “I didn’t believe it and I still don’t believe it”.
Rice is another bugbear of Nigeria’s anti-food import policy makers. In an interview with BusinessDay on 6 August 2015, the Central Bank governor, Godwin Emefiele, asked with a tinge of horror in his face: “Why should we import rice when we know that across the rice belt in the northern part of this country, hundreds of thousands of metric tonnes of paddy rice are piling up and cannot be sold?”
Of course, it was this policy mind-set that led to the infamous forex exclusion list, the hit list of 41 items, including toothpicks and rice, banned from access to foreign exchange. The Economist magazine, in an article aptly titled “Toothpick alert”, quipped that the list must have been drawn up by “someone wandering around a home and a building site and randomly pointing at items”. This column was also critical of the measure, in a piece titled, “CBN forex ban: A bad policy that hurts Nigeria’s image” (BusinessDay, 3 August 2015).
Last week, after a year of swimming against the tide on foreign exchange policy, the government finally capitulated and introduced a market-driven, flexible exchange rate regime. Hurray! But instead of using the opportunity to correct the anomaly created by the forex ban, the CBN insisted that “The 41 items classified as ‘Not Valid for Foreign Exchange’ … shall remain inadmissible in the Nigerian forex market”. The retention of the forex exclusion list confirms that the ban wasn’t motivated by forex problems in the first place, but rather it was a deliberate protectionist measure. For, if forex was the problem, the new market-driven exchange rate system should control import and export appropriately. Truth is, maintaining the forex ban seriously undermines the image of a liberal economy that the government wants to create with the flexible exchange rate.
More on that another day. For now, my concern is the constant attack on food imports. I call this attack control freakery, and worry about its effects on human liberty and wellbeing. When President Buhari said rather condescendingly that Nigerians must be “so sophisticated” to use Chinese toothpicks, he was attacking, in principle,what Aristotle called “the higher good of living well” or what Thomas Jefferson described as “human life and happiness”. The idea that using Chinese toothpicks is indicative of being “so sophisticated” is an attack on taste, lifestyle, health, and social progress!
Of course, toothpicks and rice are easy targets because both are seemingly so basic in their functionality that any type would seem to do nicely! For instance, for the president, a man of fabled Spartan living, a “sandal-wearing ascetic”, as The Economist once called him, any small stick could, perhaps, serve as a toothpick. Which is why he is miffed that anyone would even contemplate using imported toothpicks. Indeed, when the president says emotively that “all those billions of dollars” are spent to import toothpicks and rice, some are likely to respond: “Haba! Ordinary toothpick? Common rice?” But how ordinary are toothpicks and rice?
Well, the toothpick is the oldest instrument for dental cleaning. According to Wikipedia, “In the 17th century, toothpicks were luxury items similar to jewelry”. Of course, they come in different varieties; in wood, plastic, metal etc. But the value of each type of toothpick is based not only on its aesthetic appeal but also its functionality. For instance, the world-renowned Mayo Clinic in the US, recommends using a plastic toothpick (called a dental pic), instead of a wooden one, to clean the teeth, as they clean more effectively and prevent injury to the gums. So, Mr President, toothpicks are not ordinary sticks! Clearly, if Nigeria can’t produce high-quality and hygiene-enhancing toothpicks that people want to buy, the government should not castigate or stop those who prefer foreign toothpicks if they can afford them, that is, if they can pay the market-determined, forex-driven prices.
Of course, rice, too, is not ordinary, nor, indeed, is any food item. Food security is not just about the availability of food, it’s also about quality and healthy food. And unless the government wants to turn Nigerians into prisoners, who have to eat what they are given, it is morally indefensible to control the tastes of the people, provided, I repeat, they can pay the market-determined prices for foreign food items. This is why a flexible exchange rate, which allows the market and prices to influence demand, is always a more optimum policy instrument than import ban or prohibitive tariff barriers.
But the critical issue here is whether a government should deny its citizens the benefits of trade, namely, the freedom to have access to greater varieties of goods at the right quality and the right price. This is what Adam Smith called a “system of natural liberties”, which is the bedrock of trade. And to deny Nigerians the key trade benefits of choice, quality and value is to immiserate them by reducing their standards of living and general wellbeing.
Think of it. Even the government itself admitted in the “Nigeria Industrial Revolution Plan (NIRP)” that the quality of Nigerian products is generally poor, and said that “Nigerian firms need to improve products and process in a number of products areas”. When the EU banned several Nigerian food exports last year because they contained “a high level of unauthorised pesticide”, Senator Joshua Lidani said: “If the EU bans our products, it means they are not good for local consumption”. In other words, if the food items are not good for Europeans, why should they be good for Nigerians? A few years ago, I did some legal advisory work on the EU food law, and experienced EU’s rigorous food safety standards, based on the precautionary principle. Nigeria doesn’t have such standards. Yet, the government wants to force-feed everyone with locally produced food!
But the hypocrisy of Nigerian leaders is even more galling. They live in opulence in Aso Rock, with several billions of naira budgeted for catering and upkeep alone, yet they are carping about Nigerians who use Chinese toothpicks! Recently, President Buhari flew abroad for ear-infection treatment. Presumably, Nigerian doctors and healthcare service are not good enough to treat him. So, why, then, is he or his government blaming Nigerians for not buying locally made goods? Bear in mind that, according to the NIRP, even the public sector, let alone the private sector, hardly uses Made-in-Nigeria products! Yet, the government wants to dictate the tastes and constrain the choices of the general consumer public.
Of course, nothing is wrong with governments trying to influence behaviour, and they often do this through exhortation, information, regulation and taxation. In this case, exhortation and information are better than regulation(i.e. bans) and taxation (i.e. prohibitive tariffs). Thus, the “Buy Naija” campaign is a sensible form of exhortation. The Ministry of Investment, Trade and Industry (MITI) should collaborate with the Ministry of Information and the Manufacturing Association of Nigeria (MAN) to intensify such campaigns. Also, the government and industry can inform the people about the quality of Nigerian products, provided such information is not misleading. But the government should not regulate (i.e. ban imports) except to prevent harmful and substandard products from entering Nigeria, and to penalise dumped and subsidised imports. And tariffs should be designed to generate revenue and not to restrict or stop imports. Only an open trade and investment regime, coupled with a flexible exchange rate policy, will make Nigeria a truly competitive economy. In such an open economy, protectionist import-prohibition lists and forex exclusion lists are anomalies!
Olu Fasan
