In August 2019, President Muhammadu Buhari ordered the closure of land borders with the Republic of Benin and other neighboring countries. The (official) reason for this unilateral decision? Cursed be the foreign rice that floods the Nigerian markets! Cursed be the contraband which is losing revenue in Nigeria! Cursed be the “illicit” trade which reduces the outlets of Nigerian producers! For the Nigerian federal government, this involves banning certain re-export products and reducing smuggling activities.
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A protectionist policy aimed at food self-sufficiency …
Indeed, since the 1970s with the “Feed the Nation” program, Nigeria has wanted to achieve its desire for food self-sufficiency. The nearly 200 million inhabitants of Nigeria will one day be able to feed themselves only with local products: this is the deep will of the Nigerian leaders. To do this, the latter do not hesitate to use fiscal, customs or political measures to “favor” local production. For example, due to the extensive local rice development program, Nigeria has closed its borders to rice coming from Asia via Benin. With this act, the Nigerian president organized the impoverishment of his people and penalized the purchasing power of Nigerians three times.
… Far from achieving all these objectives
First, Nigerians are seeing their purchasing power decline as they now have to pay more for rice. Indeed, the price of rice has increased considerably. A 50 kg bag now costs around 22,000 naira (or $ 60) while it cost around 9,000 naira ($ 24). The Nigerian consumer has lost around 13,000 naira in purchasing power.
Second, the consumer, having lost 13,000 naira, can no longer use it to buy a shirt, bed linen or any other consumer product. What about Nigerian manufacturers of shirts, sheets, etc. ? Should we make a law to also prohibit the importation of shirts and sheets? This is how, by wanting to protect the Nigerian rice producer, we impoverish the Nigerian manufacturer of shirts or sheets. The minimum wage in Nigeria is set at 18,000 naira ($ 49). For a Nigerian earning the minimum wage, he had to work half a month to be able to afford a 50 kg bag of rice. Now, with the decision of its president, he must devote more than a month of toil to pay for the same mass of rice. Double labor for identical enjoyment!
Third, the consumer no longer has a choice. He is condemned to buy only one type of rice. He no longer has the privilege of the abundance of things. He no longer has the freedom to choose. It can no longer benefit from purchasing power gains, the fruit of international competition. By saying, long live Nigerian rice, we implicitly say long live the impoverishment of Nigerians! Even for the Nigerian producer, the decision to close the borders is a bad decision in the long run. As economic outlets are guaranteed, it is no longer exposed to price competition, and therefore no longer has an incentive to innovate in order to produce more efficiently by improving its factors of production. Its future export capacity is threatened.
The regional economy at the forefront
The economic consequences of this decision go beyond the single case of Nigeria. Benin and other neighboring countries have also had an impact. But, the people are organizing themselves to compensate for this planning of shortage thanks to smuggling, this very activity that we wanted to reduce. Moreover, because of its economic weight within ECOWAS, Nigeria must set a good example to positively influence the other countries of the community. With these unilateral decisions, it is Nigerian external influence that is eroded.
Between impoverishment and abundance of goods, what is better for the Nigerian people? Abundance! Abundance! Nigerian policymakers will cry. But their decision causes effects contrary to their desire. “In political economy, there is a lot to learn and little to do,” said economist Jeremy Bentham. Let this thought not stray from the minds of decision-makers so that they meditate on it day and night.
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