By Omoh Gabriel
Since the Nigerian economy emerged as the largest economy in Africa as a result of the rebasing exercise, the attempt to frustrate the nation’s efforts to move forward has been orchestrated by foreign investors, their media and now the European Union and the United States of America. The new move arose when the CBN out of the desire to protect the nation’s foreign reserve restricted some 41 items that can be produced locally from access to official foreign exchange. These items are not banned but can only now be imported with the importer’s own sourced foreign exchange.
As soon as the measures were announced, threats and protests from foreign investors took over the airwaves. Many of the investors are pressing for further devaluation of the Naira instead of the restriction on access to foreign exchange by the 41 items.
It is curious that while at the the 2015 IMF/World Bank Group Annual Meetings, these multilateral financial institutions advised countries to take measures to deal with the peculiar economic situation confronting them, many of these countries which agreed to the suggestion are now seeing the action taken by Nigeria as anti-trade to the point of going to the World Trade Organisation to complain.
Truth be told, these complainants want Nigeria to perpetually import products from them. When Nigerians go to their countries to import junk goods to help clean up their environment, they do not complain. When Nigerians import their goods and keep their factories running and their youths in employment at the expense of Nigerians, they do not complain.
When Nigeria imports petroleum products from their countries while being a major exporter of crude, they do not complain. What Nigerians must know is that these foreign investors want to come in and buy Nigeria’s assets at give-away prices and then make fortunes out of them later. Last week, the United States and the European Union joined the fray to raise concerns at the World Trade Organisation about the Central Bank’s curbs on access to foreign currency, a WTO official said.
The report said “The bank, seeking to conserve its dollar reserves, said in June that importers could no longer get hard currency from the inter-bank market to buy 41 items including rice, cement, private jets, steel products, plastics and rubber, soap, cosmetics, furniture and Indian incense. “At least, nine WTO members raised concerns about the trade-related impact of the rules at a meeting of the WTO’s Council for Trade in Goods, the WTO official said.
The US representative at the meeting expressed “strong concern” about the effect on US exports such as agricultural goods, plastics, aircraft and aircraft parts and metal and metal products, adding that the affected exports were worth $500 million in 2013 and 2014, the official said. The US trade official also said the Central Bank had justified its action by saying it was “in order to encourage local production of these items”, which revealed its protectionist motivation. We are unaware of any effort by Nigeria to justify the measure at the WTO,” the WTO official quoted the US representative as saying to the meeting.
The EU official at the meeting said Nigeria also seemed not to have sought approval from the International Monetary Fund for its foreign exchange curbs, and said they were having a significant impact on trade. Other countries that had concerns about the curbs were Thailand, which was worried about agricultural shipments, Norway and Chile, which were concerned about fish, and Switzerland, Uruguay, Iceland and Malaysia, which were worried about the “systemic” impact”.
Looking at the countries that raised issues at the WTO, they were doing so to preserve their national economy. For instance, the Norwegian dried fish industry is close to bankruptcy after the CBN restriction destroyed their biggest market which was Nigeria. Nigerians have a huge appetite for ‘okporoko’, as unsalted, air-dried cod is known locally, using it as the key flavouring in the soups which accompany grain staples, the Norwegian Broadcasting Corporation NRK, reported recently.
The report said: “In a normal year, Nigeria is Norway’s biggest single market for stockfish, with the trade, mainly in dried fish heads and other off-cuts, worth some 486 million Norwegian kroner ($58m) a year. “But since Central Bank of Nigeria in June restricted importers’ access to foreign-exchange market for some goods, including stockfish, business has ground to a halt.
“Nigeria is our main market. Over half of our turnover is stockfish and if the business stops for a few months, our company will be rapidly in the red,” Erling Falch from Saga Fisk in the Lofoten islands told NRK. He has already laid off almost half of the company’s 50 employees to cut costs until business returns to normal.
He said that Nigeria was the main country worldwide with a taste for dried fish heads. Falch said that his company normally exported as much as 100 tonnes of stockfish to Nigeria every week in the peak season. Instead, he now has some 500 tonnes of unsold stock in his warehouse, which he fears may soon become unsellable.
It is no surprise that Norway and others being affected raised the issues at the WTO. It is equally understandable why Thailand joined the fray of those pushing that the CBN reverse its decision on the 41 items restriction. Bulk of the rice imported into Nigeria is from Thailand. The fact that rice is one of the items in the list of items with restricted access to foreign exchange poses a significant threat to its economy. Unfortunately, rice imported from these countries are poison in the sense that they have spent close to eight years in store before being exported to Nigeria, such rice being in store for that long have no nutritional value.
These countries are more concerned about the negative effect of the policy on their economies than the possible positive impact of the restriction on the Nigerian economy. Nigeria has an army of unemployed youths. Through importation of these items, local industries have folded up and many employees sent to the labour market.
The economy is shrinking and governments cannot pay workers. How long will Nigeria continue down this line? This is one time that Nigerians should rise in one voice and say to hell with these self-seeking countries that are seeking to ruin our economy. This is the time to be patriotic. Nigeria is our only country. We are the ones to develop it. We must stand behind the CBN and encourage it to place more items that can be produced locally on the restriction list.