Pukkah:

Please note that I wrote that 'to take your point further' we should 'strive' for finished goods. This need not happen in the short term but over the long term. The export-oriented goods you wrote about is a step/phase or the low hanging fruits from where we can start and is a point which, given the time and conscientious approach, we can surpass.

By the time the economy booms and income levels go up together with fast-developing infrastructure, the local demand for cars in your example will go up and we can then move from export-oriented goods to another phase. I agree, Rome was not built in a day and a journey of one thousand kilometres start with one step. But, are we ready to start? Have we started the first step?

LOL at 'you're jobless today.

I agree with you 100%, clearly get your point, yes we can grow into 'finished goods'

it's unfortunate the OP and others can's see this.

Godman_n: The best topic I have read on Nairaland. Whereas the poster was closer to the truth, he/she made some fundamental errors.

We cannot, and no country can, survive on Isolation. But we will also never succeed with the present so called free trade, that we have been lured into.

So long as we do not pull some serious (difficult, politically risky both nationally and internationally) strings, we will never catch up with the West.

The truth was that the western Economies were built with some levels of local protection of their economies; and our exploitation (Exploration,Slavery, colonizations, Neo-coloniazation, etc). Even today, they still deploy some measures to protect their economies and at the same time make sure that third world world countries do not protect theirs. The ways and manners they do this, are many and will takes pages to explain. But note that so many heads of states in Africa have been killed, some removed through instigated coups; because they wanted to protect their local economies, in ways not acceptable to powerful Western interests.

That apart, to those that encourage opening up the economy and competing in our areas of "strength". Are we aware that presently, we are far behind in so many factors of production that the only area we can compete is in raw materials. Even the oils we have will soon be replaced by some new scientific inventions like fission and battery technology.

To compete with the west in production, in an open economy was to be able to produce goods cheaper and better than theirs. The only area we can do this is in Agriculture where the western countries have manufactured several kind of subsidies to help their farmers over us; even against World Free Trade rules. In commercial/factory production, when we consider the factors of production (financing, Infrastructure, technological know how, Economy of scale among other); we see that there is no way we can catch up without some kind of political controls.

We must selectively raise tariffs to protect local manufacturers; we must enforce local content on essential sectors of our economy. We must enforce expatriate quota in companies operating in Nigeria. We must enforce our government agencies to patronize local goods. We must enforce same local content on all contract awards.

In essence, we must explore ways of protecting and encouraging local producers.

Also, I do not know why Africans cannot get special concessions from World Trade organisation. We should use our poverty rate to negotiate for favourable conditions from WTO.

A simple scenario is this. We are told in Economics that free trade (free movement of goods and service) will enhance world trade. We should ask an important and necessary question. WHY ARE THEY RESTRICTING FREE MOVEMENT OF LABOUR. If free movement of goods will bring down the average cost of goods world wide; so will free movement of labour.

But because it will affect the citizens of the western countries badly and rob off positively on us; No one wants to discuss that. Our unintelligent Impostors will never agitate for it.

In summary, we need serious levels of control; we must protect and encourage our local production, without turning to a pariah state. We must find a way to negotiate this (And there are several grounds for it);p we must do it diplomatically. We must find a way of beating the west in their game. To go for straight isolation is to call on them to strangulate us. And they will do it. Read up the fate of Haiti and presently Zimbabwe.

Very importantly, we can and should run a massive indoctrination of our people so that we can have more interest in our local life and products. Those that have interacted with any citizens of the developed countries would have noticed a near brainwash of their citizens to think along their national goal. The Chinese will never see wrong in the Socialism and controlled economy. The British believes so much on themselves. The Japanese, The Americans etc. When we do not believe in ourselves; how do we sell ourselves and our products to other.

The fact is that colonialism and our educational system have destroyed our psyche that we have come to believe that everything about us is inferior. So we do not only prefer to be and sound American, European etc; we also prefer their goods.

On a lighter joke, can someone tell me why most of us desire French Fries? I have been telling people how we rejected potatoes even in my villages; only for the same potatoes to be labelled and packed to be used to extorted money from us. Why have we not been able to explore and use our local delicacies other than "INFERIORITY COMPLEX"?

What we lack is leadership. If we have it, we can do a lot.

Great post, thanks for that.

You mentioned oil, it is one of the only exports that anyone will buy, even if you do not import from them.

faithin9ja:
Please don't you realize the richer your customer, the more money you make. US makes more money from South Korea because South Korea is rich enough to buy US products. And when we say products it's not just televisions and mobile phones. the amount of financial transactions between US and Seoul will dwarf Nigeria's (no Africa) entire economy many times over. Manufacturing, education, health, entertainment, financial services these are all bound up in the trade between South Korea and US (not to talk of other countries).

America is no longer a manufacturing economy, it is becoming a service economy. The absolute pinnacle of the capitalist pyramid. South Korea can be considered a manufacturing economy, like china or the rest of the BRICS. These are the middle of the pyramid, they fuel their growth from the bottom countries like Nigeria, who sell resources.

You want Nigeria to become a service or manufacturing economy correct? Well that is impossible within the global economy. If all of Africa became Industrialized were would we get our raw materials from? Industrializing nations use their natural resources for themselves. This system requires certain countries to provide the resources for others. If we all try to develope there will be no base and the system with implode. We need to stop trying to change the system and create a separate industrial economy within Nigeria, using our own resources to fuel our own economy.

pleep: It is time Africa embraced isolationism. The way I see it, this is the only good economic system for African countries.
The goal must be to stop all importation, and lessen our focus on exportation so that we can separate ourselves from the world economy. When everything we use is created at home we will have jobs for all our people. Over-dependence on importation is the main cause of the widespread poverty on the continent. We get everything from foreign countries, Africa is the dumping ground for the worlds crap, clothing and plastics from Asia, cars and electronics from Europe & America.

We will never make it in the global economy, even if we become G-20 the magority of Nigerians will still be poor. Economic growth means nothing if people are unemployed. Globalism is like a pyramid, the 3rd world forms the base. Leaving the global economy is the only way we get get real improvement in Nigerians quality of life.

Isolationism won't work,let me expatiate by borrowing the points you've alluded to:
1.Stopping Imports and Exports.
This is the quickest way to mass poverty,since there's no guaranty you'll get the best prices from a neighboring African country,also no guaranty that a neighboring country produces a necessary commodity in a quantity,quality and price that would prove beneficial.This would lead to reduced income for collective nations as a whole due to a lack of profitable trade.
Stopping imports & exports would also lead to mass unemployment,as some industries would have no incentives to produce or manufacture due to lack of guaranty of internationally aligned profit margins. This means less demand for labour.
Stopping imports & exports would also lead to a decline in industrial expertise,as we would be failing to learn from others who do certain things better.
Stopping imports & exports would turn us to "pariah" nations as you would sever international relations and goodwill you would otherwise have fostered.
Stopping imports & exports ignores the fact that some currencies i.e U.S Dollar,Euro,Yen are used benchmark pens for calculating value/wealth and we won't have access to them.(Let me explain, which would rather be paid in for your oil sale, 1Million U.S dollars or 1Million Zimbabwe dollars?)

Yes we need self sustainability but it needs to be done properly,with proper investment,and effective grass roots policy. The point is we have bad governance whose interest is not the welfare of the people. Unfortunately it can't be done in isolation because most African nations are poor,inept,badly run,seriously unstable and badly managed. They may have the resources but lack the expertise to harness said resources,or infrastructure to ensure profitable and sustainable extraction. More importantly it's a negative concept to want to embrace Isolationism as everyone knows to get ahead in life you need to know the right people and interact with them.Fact.

I have looked @ this thread and it is obvious that the topic is just another victim of opinionization, rather than the purview of experts, and at that those who are conversant with economics.

Succinctly put, isolationism will be a disaster, which in anycase is not an option since we currently rely on crude oil exports and refined oil imports.

Some things will have to work in tandem

- corruption reducing to acceptable levels
- decentralization of the economy to be driven by states and local governments also
- private sector oriented growth
- evolution of the economy, maximizing current state of the economy - agrarian - and encouraging policies that transition to agro-allied and later other manufacturing , advanced manufacturing and then service. Different states could grow at different paces, as India, Brazil and China in fact all economies evolve. Some parts of U.S.A still remain underdeveloped.

IF YOU ARE A GOOD STUDENT OF HISTORY YOU WOULD KNOW THAT "NO CIVILISATION WAS SOLELY DEVELOPED BY ITS OWN RACE"
EXAMPLES : EGYPT -- ENSLAVED THE HEBREWS TO BUILD THEIR CIVILIZATION, THE GREEKS AND ROMANS DID THE SAME THING TOO, EVEN THE PRESENT WORLD SUPERPOWERZ CIVILIZATION WERE BUILT BY OUR OWN FOREFATHERZ THE BLACKS.....MY POINT IS THE DEVELOPED WORLD IS RUNNING INTO A CHAOTIC CASE OF EXCESS SUPPLY N LTTLE DEMAND, AFRICA IS THEIR ONLY SOLUTION, LET THEM COME WITH THEIR FORIEGN INVESTMENT N WE WOULD ENSLAVE THEM ON OUR OWN SOIL TO BUILD OUR OWN CIVILIZATION [HISTORY MUST REPEAT ITSELF]...IN SUMMARRY THIS IS A BAD TIME TO BE ADVOCATING FOR ISOLATION!!!

mayoroflag: I have looked @ this thread and it is obvious that the topic is just another victim of opinionization, rather than the purview of experts, and at that those who are conversant with economics.

Succinctly put, isolationism will be a disaster, which in anycase is not an option since we currently rely on crude oil exports and refined oil imports.

Some things will have to work in tandem

- corruption reducing to acceptable levels
- decentralization of the economy to be driven by states and local governments also
- private sector oriented growth
- evolution of the economy, maximizing current state of the economy - agrarian - and encouraging policies that transition to agro-allied and later other manufacturing , advanced manufacturing and then service. Different states could grow at different paces, as India, Brazil and China in fact all economies evolve. Some parts of U.S.A still remain underdeveloped.

All they taught you in school was to regurgitate facts and speak jargon that no one can understand.

Krucifax:
Isolationism won't work,let me expatiate by borrowing the points you've alluded to:
1.Stopping Imports and Exports.
This is the quickest way to mass poverty,since there's no guaranty you'll get the best prices from a neighboring African country,also no guaranty that a neighboring country produces a necessary commodity in a quantity,quality and price that would prove beneficial.This would lead to reduced income for collective nations as a whole due to a lack of profitable trade.
Stopping imports & exports would also lead to mass unemployment,as some industries would have no incentives to produce or manufacture due to lack of guaranty of internationally aligned profit margins. This means less demand for labour.
Stopping imports & exports would also lead to a decline in industrial expertise,as we would be failing to learn from others who do certain things better.
Stopping imports & exports would turn us to "pariah" nations as you would sever international relations and goodwill you would otherwise have fostered.
Stopping imports & exports ignores the fact that some currencies i.e U.S Dollar,Euro,Yen are used benchmark pens for calculating value/wealth and we won't have access to them.(Let me explain, which would rather be paid in for your oil sale, 1Million U.S dollars or 1Million Zimbabwe dollars?)

Yes we need self sustainability but it needs to be done properly,with proper investment,and effective grass roots policy. The point is we have bad governance whose interest is not the welfare of the people. Unfortunately it can't be done in isolation because most African nations are poor,inept,badly run,seriously unstable and badly managed. They may have the resources but lack the expertise to harness said resources,or infrastructure to ensure profitable and sustainable extraction. More importantly it's a negative concept to want to embrace Isolationism as everyone knows to get ahead in life you need to know the right people and interact with them.Fact.

Can you open your eyes? You say isolationism will create widespread poverty, Africa already has wide spread poverty! Any system would be better than the one we have now!

Stop being pre-occupied with what other countries are doing. Europe has no natural resources, they have nothing we need. We can build our own knowledge, hell even starting from scratch will be better than what we are currently doing. Africans probably lived better 500 yrs ago than we do now, and with more dignity. What you said about currency does not apply, because as an isolated nation Nigeria would have its own currency separate from the global system. (perhaps backed by silver)

I have explained the reasons why Africa will never advance in the global economy, so far no one has even tried to disprove that.

Though I understand the poster's thinking, his proposal is flawed. Rather than leave the global economy, we should compete in it.

You say to leave the global economy, if you do, and stop importing/exporting - where will your funds come from? without exporting our crude oil (and natural gas and any other agricutural products we still have), your purse will dry out and we will become another poor nation begging for foreign aid.

You cannot improve your economy if you do not export, you cannot export if you do not manufacture, you cannot manufacture if you have no electricity and if the cost of manufacturing in nigeria remains very very high .... you see where I am going with this.

Yes I completely agree that the first step is to stop recieving all forms of foreign aid, for me, foreign aid is another form of slavery, but rather than force the chains aound our throats, african goverments actually seek to enslave themselves by collecting this foreign aid.

So, 1st - stop foreign aid, 2nd - get your house in order, fix NEPA, Oil refineries, roads,corruption etc, - this will lead to rapid industrilisation and development from within which can then be exported to the rest of the world.

Cheers.

Nigeria cannot leave the global economy, but we must look for a way to reduce our cost of borrowing.Corruption is the number one problem, but there seem to be a deliberate attempt by western governments to under-develop Africa countries. How do you explain us borrowing at 15% interest rate when we have constant income.Our former president with the help of our current minister of finance agreed to stupidly receive debt write-off of 18billion and by so doing, paying the Paris club 12billion. To me dat looked like debt re-financing over a longer period of time.
No country can develop with dat interest rate hanging over its head. Our banks and discount houses love the interest rate because it guarantees them constant profit, but the real sector suffers because their cost of capital becomes very high.

Isolation from the global economy is not necessarily good or bad, but like everything else, it needs balance. It is better to just remove the negative policy (internationally and nationally) and review contracts that exploited the average african.

African leaders are the key to this as they may need to look inward and start doing things that favor the continent like re-negotiation of previous deals, stop pollution and stop making africa a dumping ground, maybe stop being so short sighted, they need to have mutually beneficial allies unlike the previous 500 yrs.

It must not isolate itself from asia since it is the driving force for economy at the moment and contact with them seems small still, also, they've never imposed aggressively on africa. In fact, working with them is more beneficial as some of them have humble beginnings just like Africans and work extremely hard against all odds - a visit to asia will make you understand this better.

Billyonaire: North Korea and Cuba are examples of separatists economy; China and Taiwan also operated separatist economies due to their communist regime. The poster is making a valid suggestion, but I think we should try to balance staying connected to world economies and remaining economically independent. The less we import, the better for our development.

Cuba is doing better than the whole Africa continent Cuba's health care is better than America's and the only reason cuba is doing "bad" is because of American embargo

Cuba is not doing badly by any stretch, the economy is stagnant but the peoples standard of living is excellent. That should be every countries goal.

For that guy to bring up cuba was just dumb.

indeed

pleep: Cuba is not doing badly by any stretch, the economy is stagnant but the people standard of living is excellent. That should be every countries goal.

For that guy to bring up cuba was just dumb.

@ Pleep

Obviously you have already decided what answers are acceptable to you. I rest my case. I wish this thread the best in finding answers to op's question.

Actually I am with pleep on this. Isolationism, to an extent, would protect Africa from exploitation and rapid poverty. Why do you think some African countries have gold and diamonds n abundance, but almost none of them can afford gold chains. Don't you find it ironic. We are under selling our resources and our leaders easily sell us out when offered bribes from others. If you have gold, use it to make gold chains, electronics and consume it yourself. Self dependence is the key. We have the market, we have the resources, we have the man power and skills. What we need is a visionary leader to harness that and convert that to local products and improved consumption, and overall creation of wealth. Anybody that does not see anything wrong with our leaders' incessant quest (begging) for foreign investors is an astute mo*ron.

Well u need a mixture of technology and innovation to convert the raw materials to goods that will serve demand / fill gaps. There’s actually nothing wrong in selling to the world market if you ask me, so long the correct prices and going market prices are paid. But what applies is that few people are bribed to sell out our resources to foreigners at give away prices. The buyers injects a bit of technological modifications and re-sells back to us at hundreds if not thousands-fold of the price we have sold our valuable raw materials. For example Coltan (columbite–tantalite) is a raw material that is in very high demand. Without this raw material we wld not have mobile phones and lap-tops. This product is found in Congo, at locations controlled by the rebels with the support of the West. I once saw a documentary where single-engine cessna planes fly into these jungles to cart away these raw material at give away prices or in exchange for arms. What should actually happen is, we need to organise ourselves properly. We need to arrange to have these sort of raw materials “exchange-traded”.
Demand will meet supply in a transparent well-organised setting bringing about “fair” prices. Having noted the foregoing though and has already have been noted by a few contributors earlier, our problems goes beyond this. Let’s take Nigeria’s oil for example, it is exchange-traded and the price structure is transparent to an extent, but are we re-investing the proceeds in a way that will make us self-sustaining and less-dependent on external parties? No!
Before we start considering the isolationism line, we might first want to look at banning the importation of generators, build refineries, arrange that we have regular supply of electricity, refurbish our public educational systems etc. In this regard we can learn a lot from Brazil and India

@ Poster, please do not contradict yourself. You are talking about Nigeria leaving the global economy and yet you mention Africa isolating itself. Africa is a continent with countries who will never, ever budge to such a suggestion! I am yet to be proved wrong because I think posting this topic has to do with Nigeria posing as a Super power in Africa.

Pro @OP & against, check this out.

Capitalism, Socialism, Isolationism or Globalism or any other -ism for that matter is irrelevant. Africa & Nigeria's problems are corruption, misrule, ignorance, laziness & barbarism. Whatever approach we adopt, only discipline, hard work & commitment can see us through.

The USA made it thru isolation & protection till the late 19th century but Singapore & South East Asia made it thru opening there doors to the industrialized nations. The only universal streak to all success stories is sincerity & hard work. Anything else is dogma.

mayoroflag: @ Pleep

Obviously you have already decided what answers are acceptable to you. I rest my case. I wish this thread the best in finding answers to op's question.

You guys are just posting the same things over and over again, these are points i have disputed multiple times.

Anyway i do have my 'answer.' It is now clear why Nigerians are staying in the globalist system that has failed in 130 countries. You guys are too closed minded, and apparently to lazy to read.

Very true. We have to force ourselves to produce. Africa is over reliant on the outside world both for our products and ideas.Everywhere in Africa, we are adopting a " Western standard" while opening our markets to all and sundry. Today, the means of production in Africa is controlled by Indians, Lebanese, Europeans and soon Chinese and yet these countries have almost closed their markets to Africans, or we don't have the entrepreneurial talent to conquer those markets. Therefore, while we are building our capacity to effectively compete with the rest of the world, let us shut our doors to the world. That is what Japan, China, USSR did! Otherwise others will come here and dominate our markets while we will remain slaves in our own land.

mayoroflag: I have looked @ this thread and it is obvious that the topic is just another victim of opinionization, rather than the purview of experts, and at that those who are conversant with economics.

Succinctly put, isolationism will be a disaster, which in anycase is not an option since we currently rely on crude oil exports and refined oil imports.

Some things will have to work in tandem

- corruption reducing to acceptable levels
- decentralization of the economy to be driven by states and local governments also
- private sector oriented growth
- evolution of the economy, maximizing current state of the economy - agrarian - and encouraging policies that transition to agro-allied and later other manufacturing , advanced manufacturing and then service. Different states could grow at different paces, as India, Brazil and China in fact all economies evolve. Some parts of U.S.A still remain underdeveloped.

Is your post an opinion or within the purview of an expert?

Pleep is on point. Africans have been brainwashed,nothing can be done about that now.

We are already poor,and yet we have been in the global economy,so pray tell me how isolation can make us poor,when global economy has already done that. He that is down need fear no fall.

Africa have the raw materials,europe don't,it's obvious what will happen when we become isolated.

pazienza: Pleep is on point. Africans have been brainshed,nothing can be done about that now.

We are already poor,and yet we have been in the global economy,so pray tell me how isolation can make us poor,when global economy has already done that. He that is down need fear no fall.

Africa have the raw materials,europe don't,it's obvious what will happen when we become isolated.

He that is down will stay down, if he doesn't accept a helping hamd.

HNosegbe:

He that is down will stay down, if he doesn't accept a helping hamd.

Please tell me you are kidding. Who will help us, the IMF

And why did those posts get hidden, what did they say? that drives me crazy.

HNosegbe:

He that is down will stay down, if he doesn't accept a helping hamd.

By helping hand,you mean forcing loans of high interest rate down our throats,removing/killing our good leaders,exploiting us,enslaving us, advicing our government to carryout anti-people policies like fuel subsidy removal.
Well,we don't need their helping hand,they can shove it where the sun doesn't shine.

.

faithin9ja:

...Export-oriented factories is what we need. Produce items that others will buy from us with hard FX. this is how Japan and Taiwan started, China is now there, check all the clothes factories in Vietnam and Bangladesh making clothes to be sold all over the world.

My example above; a factory to make the cases (only the cases) for batteries inside mobile phones could probably turnover $5million a year that is more than N600 million. How many factories in Ajao or Isolo can boast of that kind of turnover?. Plus this brings foreign exchange and you will need to keep the factory update to maintain quality for your foreign markets.

However this is very difficult to set up.No government support, poor infrastructure, poor finance, bad government that will frustrate your attempts to even export out of Apapa or Tin Can - this is all before you start looking for your foreign markets.

it's easier for me to import $100,000 of pampers and sell at 15% mark up every 90 days.

I really wish that I have more time to respond to your posts in detail but here's the gist of my argument: what comparative advantage do we have over east Asian countries that produce the low cost parts like cell phone cases and can we ever compete with them head-on?

Keep in mind the following:
1. they have constant power supply;
2. their leaders artificially foster growth in certain sectors;
3. they have the technology needed;
4. they have the skilled workers needed;
5. they have cheap labor;
6. they have stable governments which encourages FDI;
7. they have and enforce intellectual property and contract laws, albeit sometimes selectively;
8. they have better schools and graduate more engineers;
9. their infrastructure is up-to-date, etc.

We have a few things going for us that we can take advantage of without going into a head-on competition with Asian countries that have perfected low cost manufacturing. We have a population of 160 million consumers and about that much more in other Western African countries that we can easily export to. Nigeria cannot compete directly in the global market place, at least not yet. For now, local manufacturers should be able to milk the 160 million consumers for all they consume, which should give us time to perfect our manufacturing methods.

Also, oil cannot be a comparative advantage except as it relates to the availability of cheap local fuel for manufacturing, which does not exist. Today, the cost per liter of consumed fuel in Nigeria is on par with the rest of the world after subsidies/allocated subsidy funds are taken into account.

You want people to starve?

CAMEROONPRIDE: You want people to starve?

You don't understand. It's the best option for Africa but only if we are confident of being able to master efficiency and technological advancement in the long run.

0lumide:
You don't understand. It's the best option for Africa but only if we are confident of being able to master efficiency and technological advancement in the long run.

I understand perfectly, but the fact is our actual and past leaders didn't make a technological transfer, I mean if we close our doors , how do we cure cancer? How do we build x-ray machines? What I mean is it will take too much time and we as people are not willing to give that time , I always say to my peeps that African are European/western with black skins we love their life..for example after you close your doors how do you tell/explain to a Nigerian that he can't buy a Mercedes keep in mind that we dont have car industries , nor aviation etc , we don't even manufacture our own vaccines talk less about our condoms lol...closing the doors will b too harsh , what we need is education and good leaders that will b able to negotiate fair contracts with Western, we also need to learn to consume African, start patronizing our own stuffs... Do you know how many African refuse to flight with their local companies? There's is no trust

IBB did something similar in the 1980s if I am correct, it was stupid then, it is stupid now. We have customs to regulate products in the country, don't ever repeat this foolish idea ever again.