Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) - Politics - Nairaland
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| Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by LRNZH(m): 2:11pm On Jan 06, 2016 |
Background Godwin Emefiele, the governor of Nigeria’s central bank, has been criticised in recent weeks for attempting to prop up the value of the naira, the country’s currency, by restricting access to foreign exchange and banning imports of certain goods. In the absence of a clear economic strategy from the country’s new president, Muhammadu Buhari, Mr Emefiele is taking an increasingly central role in determining Nigeria’s industrial policy. His tactics sound familiar. As this article from The Economist archives shows, Nigeria has pursued a protectionist policy like this before, in 1984—under Muhammadu Buhari, a young general who had won the presidency in a coup on December 31 1983.  Nigerians reluctant to tighten their belts for their former civilian leaders were ordered by the soldiers this week to take in another notch. Nigeria's central bank announced a sharp cut in foreign exchange available for imports. At 287m naira ($380m) a month, the new limit is less than half as much as Nigeria spent on merchandise and invisibles last year. It is almost a third lower even than the tough target set by ex-President Shehu Shagari in the budget presented two days before Major-General Muhammadu Buhari's coup. Though the cut may turn out to be less swingeing than it sounds—senior officials told commercial bankers in London this week that a little over 4 billion naira will be made available for the year—there is no doubt that the new government means to cut imports heftily. Foreign bankers and creditors are happy. They see it as a sign that Nigeria is serious about living within its shrinking means. Export earnings from oil dropped from $25 billion in 1980 to just under $10 billion in 1983. Though a swift rise in imports from $11.8 billion in 1979 to $18.4 billion in 1981 was checked in 1982, Nigeria amassed a current-account deficit of some $16.5 billion in the three years from 1981. A deep cut in the import bill will free foreign exchange to service Nigeria's external debt. This is likely to take 30-40% of export earnings in each of the next few years. But a big fall in imports could ruin the new regime's reputation at home. It is popular at the moment. Though General Buhari has promised no free lunches, people expect him to bring down prices and increase supplies of essential goods. They were beginning to grouse that he was moving too slowly—but cutting imports was not the step most had in mind. Many consumer goods, including basics such as detergents andcooking oil, are already scarce. Import restraints since April, 1982, and the growing reluctance of foreign suppliers to finance trade with slow-paying Nigeria have combined to reduce both the volume and the dollar value of imports in 1983 to below their 1980 level. Attempts by over-zealous soldiers in the first weeks after the coup to impose bargain prices in the shops have made shortages worse as traders hoard now what they managed to hide then. Even black-market champagne and French perfume are vanishing as soldiers patrol the borders for smuggling. Manufacturers are feeling the pinch the most. Nigeria buys about 75% of its industry's raw materials abroad. More than 100 businesses stopped production in 1983 because they could not get foreign exchange for imports. Many employees are taking next Christmas's holiday now. Registered unemployment, up by more than 40% in 1982, is still rising. So is inflation, conservatively estimated at an annual 20%. Food supplies are affected too, though so far in towns high prices are a bigger complaint than shortages. Nigeria spent some $1.5 billion in 1983 on food imports, including 2m tons of grain. It is likely to need $2 billion this year. Drought in the north may have reduced the grain harvest by up to 50%, and there is an outbreak of rinderpest in cattle. Under still imprecise new rules, 58% of imports will be raw materials and industrial spare-parts; 12%, food; 18%, consumer goods; and 12% for invisibles, such as foreign travel and management-fee remittances. This is in sharp contrast to the pattern of the past few years; when consumer goods accounted for 40% of all imports and raw materials only 25%. The new government says it will keep prices of essentials down by cutting out middlemen who used to take a cut on each of five or six transactions between ship and shop. This sounds optimistic, but the true level of Nigeria's imports has long been inflated by overinvoicing and false pricing. Kicking out the crooks at home and buying more competitively abroad should reduce the fall in the volume of imports, officials hope. Previous attempts to order Nigeria's foreign-exchange priorities have foundered on corruption and inefficiency. Will General Buhari and his powerful number two, Major-General Babantunde Idiagbon, do better? On corruption, modest improvement is likely. Many of the biggest suspected wrongdoers have already left. General Buhari has said there will be no witch-hunt. He probably cannot afford one. [url]http://www.economist.com/news/middle-east-and-africa/21666090-can-nigerias-buhari-take-import-monster-and-win?fsrc=scn%2Ftw_ec%2Fcan_nigerias_buhari_take_on_the_import_monster_and_win_[/url] Posters Comments: cc: Lalasticlala; Mynd44; Ishilove; Obinoscopy 2 Likes 3 Shares |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by mrborntodoit: 2:13pm On Jan 06, 2016 |
Hmmmmmm! We told them he is unfit to rule especially in democracy, they said they prefer tyranny to freedom of speech !! I also told those who have ears , they said the economic hardship will be for the corrupt, oya, over to you ooooo !!! |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by Maisuya1: 2:19pm On Jan 06, 2016 |
reading |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by vedaxcool(m): 2:57pm On Jan 06, 2016 |
The policy makes sense, we should grow our manufacturing base. We can't keep spending on consumer goods and expect any profitable outcome from it. |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by LRNZH(m): 2:59pm On Jan 06, 2016 |
vedaxcool: That's exactly what I believe as well. We need to swallow the bitter pill and domicile most of our economic activities to generate home-geown talents, jobs and national.income. Someone has to bell this Economic cat and PMB may well be that person. 1 Like |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by vedaxcool(m): 3:02pm On Jan 06, 2016 |
LRNZH: Hopefully Nigerians will key in. |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by Sweetguy25: 3:07pm On Jan 06, 2016 |
In 1985 he was importing suitcases filled with cash, today, he is importing luxury vehicles. |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by LRNZH(m): 3:47pm On Jan 06, 2016 |
vedaxcool: You know, the key is two fold: 1. Good Awareness and communication with Nigerians on policy directions. People need to understand and feel like they're part of the process 2. Effective short to medium results. Let's see some results from limiting imports and growing a home based manufacturing economy within 2 years. Also, infrastructural development (power, roads, refineries) need to be on point ASAP because that drives entrepreneurship outside of loans |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by DaBullIT(m): 11:59pm On Jan 10, 2016 |
That cartoon though bwahahahahahah |
| Re: Throwback: Can Buhari Take On The Import Monster And Win? - The Economist (1984) by asadike(f): 8:03am On Jan 11, 2016 |
OmG! so we are back to 1984? |
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