There comes a time that the nation, Nigeria, must get it right in the synergy of policy, between fiscal regulations and management of monetary balances, to ensure that the best economic indices are maintained for growth and development. The time appears to have come within the border closure strategem.
The Central Bank of Nigeria is the body vested with the powers to formulate monetary policies.. By this we mean how exactly Interest Rates affect Consumers. How the processes of drafting, announcing, and implementing the plan of actions taken by the central bank controls the quantity of money in our economy and the channels by which new money is supplied.
There must always be a monetary policy, that consists of management of money supply and interest rates, aimed at achieving macroeconomic objectives such as controlling inflation, consumption, growth, and liquidity…. These are matters that directly affect the polity.
These things are achieved by actions such as modifying the interest rate, buying or selling government bonds, regulating foreign exchange rates, and changing the amount of money banks are required to maintain as reserves.
On the other hand is the Fiscal responsibility of government, to put in place, her own policy on use of government instruments on revenue collection, taxes, collectibles, and receivables, and the management of expenditure, spendings and expendables, to influence our economy.
The use of government revenues and expenditures to influence macroeconomic variables must always be reviewable, renewable so as not to allow our country enter into a recession.
And, Nigeria has just gone through a recession of which we are just about recovering from… It is therefore important that a synergy be sought for and a grande policy formulated in bringing about a sound con-joined natural policy, which will address the growing concerns about what should be the conceivable optics, when the previous laissez-faire approach to economic management became discredited, particularly so as the country suffered from such during the time of the recent recession.
The president has factually stated the reasons for the closure of Nigeria’s land borders with Benin Republic, Niger, Chad and others — The matters of massive smuggling and unwarranted trade imbalances, leaving Nigeria to be the dumping site for many goods and Agricultural produce, especially of rice, that we either already have locally, and or the capacity to produce and be self sufficient in.
As reported in the media, accentuated by The News Agency of Nigeria, the restriction at the borders, have started to yield positive results.
The joint border security exercise ordered by the government and aimed at securing Nigeria’s land and maritime borders, are solid sector policy measures that were recommended by those entrusted with regulating our monetary and fiscal policies, namely the CBN, the finance ministry, with obvious input from the ministry of agriculture.
The synergy just had to be put in place in formulating a sustainable policy to help the nation achieve putting Nigeria and Nigerian produce and goods, first.
That synergy seemingly has berthed, and it is all good. So far so good.
The customs department has been recording phenomenal increases in revenues, ranging on the averages of N5 – N6 billion a day, as most goods smuggled through the land borders have had to be berthed, diverted to our sea ports.
Local products and farm produce are now gradually being accepted as worthy alternatives to more often than not, inferior imports. Farmers are finally having the sense of belonging and entitlement to the recognition of their sweats, industry and hardwork.
It would be recalled that as far back as July 2015, the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele had duly cried out for support in his own recognition of an impending recession, calling for the closure of the borders to avoid and avert capital flight, leaving the local producers and farmers in the lurch in the unproductive, uneven balance of trade that threatened then to cripple the Nigerian economy.
He called for such a wholesale holistic approach to sector policy formulation to avert a recession. The rest is history.
Here and elsewhere in the world at large, the activities of the smugglers are threats to self-sufficiency of any nation, more so to our own fledgling economy.
The successes being recorded in the agricultural sector are too delicate to be left in the lurch by the continued and renewed activities of smugglers.
Now that there are noticeable interests in small to medium to large scale investments in the agriculture sector, it behooves the handlers of the economy to help put in place not only the enabling environment, but also the fiscal and monetary protection needed to help indigenous businesses grow.
The Central Bank has also intensified upon the need to provide loans and facilities in the critical sectors of production including agriculture…
Agricultural Credit Guarantee Scheme Fund, Agricultural Credit Support Scheme, Commercial Agriculture Credit Scheme, Micro, Small and Medium Enterprises Development Fund, are some of the instruments put in place to stimulate growth, conscientiously and consciously by the CBN.
The implementation and disbursement of these instruments through the various banks, being diligently supervised by the CBN. It is therefore important that certain measures be put in place for the sake of the Nigerian economy hence the need for the border closures and other Allied matters at these present times….
That farmers are gradually going back to their farms, especially after the many cases of insecurity, farmers/herders clashes, that have noticeably and significantly reduced, a drain on the economy itself, the country must move forward.
Efforts such as the border closures will help to save huge sums of money which would otherwise have been expended on importing locally produced goods and rice using our scarce foreign reserves….!
A responsible CBN Governor cannot afford to allow smuggling of farm produce and other products at such alarming proportions to continue.
It would be recalled that the CBN Governor, Godwin Emefiele, in June of 2015, announced the restriction of the availability of forex to importers of 41 items including clothing and toothpick, as part of a series of protectionist interventions that have continued to happen since president Muhammadu Buhari got into office.
Today, the list has grown to 43 items. This is the mark of a good administrator of monetary policies.
For as long as Nigeria intends to keep her small but significant leaps in the right direction in averting yet another recession, the borders must remain closed for a longer time.
Our closest neighbour in the south of the country with a huge trading activity long standing traditional ties is Republic du Benin…
Her former president Thomas Boni Yayi soberly described his country as Nigeria’s 37th state at one time — Benin has for decades been a hub to facilitate informal and formal trade, as well as the smuggling of all goods, especially rice and motor vehicles.
World Bank figures have it that no less than 20% of Benin’s GDP is from importing goods that are then either smuggled and or reshipped to Nigeria… Not counting the goods smuggled in through bush paths, perhaps as huge as those coming through the land borders..!
The CBN believes and rightly so, that these activities drive up prices in Nigeria’s domestic markets and affect the country’s ability to mass produce for her citizens.
In August 2019, and as recently as on the 1st of November, The Central Bank Governor Godwin Emefiele attested to the gains on border closures, whilst delivering a lecture at the Edo University, Iyamho in Edo State, as he explained that it would also help in reducing the level of Boko Haram insurgency, kidnapping and cybercrime popularity, when the boom that is expected to come from the agricultural sector becomes our reality in a matter of 2 years. It is his belief that the noticeable idleness pervading the situation regarding our youths, losing hope, resorting to criminality, their frustrations stemming from lack of available jobs, will give way to the revolution to go back to the land and farm.
He is right!
Another statement of the CBN Governor’s, restricting forex to food importers in order to allocate more foreign reserves to diversifying the economy, is also the right thing to do.
Nigeria must accept these sacrifices for the sake of our economy.
China also took this kind of policy and sustained such for many decades in order to become the technological giant that China has become today… Why not Nigeria…!
“I will like to stress that we would ensure that more of these items will get on the list of items that are going to be restricted from accessing foreign exchange in the Nigerian banking industry, not just from the CBN source,” the Governor said.
The CBN Governor has also urged rice millers in Nigeria not to hoard rice or increase the price…. Again, the right thing to do, by overseeing and supervising even those in the production and manufacturing sector, during this period of stabilizing local produce.
This time around Nigeria must first survive.
It is only then that we can begin to love our neighbours no less, but certainly not more.
It is time to pursue more economic nationalism, as the CBN and others in the formulation of this policy have done. We must endure for short-term pain, to enjoy for long-term gain..!
This is about Nigeria, a must for Nigerians in a buy-in situation that can, and will lead to a massive payoff for us all as a new future in sustainable development and growth beckons.
Credit: Akin Osuntokun, Thisday