The Counter-Productivity of Nearsighted Economic Policies: Putting Nigeria’s Closed Borders in Perspective

The Counter-Productivity of Nearsighted Economic Policies: Putting Nigeria’s Closed Borders in Perspective

Many government policies (many would quite justifiably argue), in recent times, in Nigeria, have borne underlying demonstrations of insensitivity to the plights of Nigerians in various sectors such as finance, taxation, and international trade. One could cite the recent Central Bank of Nigeria (CBN) cashless policy, the proposed increase in VAT, the imposition of tax funding by corporate citizens for the police force, to name a few. Perhaps, the government’s recent decision, as announced by the Nigerian customs chief, Hameed Ali, that all land borders have been closed until further notice, could assume a front roll seat in the public poll of policies that have been gravely insensitive to the economic plight of Nigerians, especially as the reasons given by the government are the blanket economic and security reasons.

Reality check for me was the unsolicited alterations in my Sunday vitality routine. Traditionally, my Sundays enjoyed the pleasure of eating well prepared rice, at least until now. In what I would better describe as a dramatic turn of events, my desire for a rice meal was supplanted by the reality of eating Eba. Enquiries revealed that the price of rice had become astronomically steep and indeed, it naturally followed that the closure of the borders would have mangled the ordinary courses of demand and supply. 

In the Judging Eye, R, Scott Baker stated that “a beggar’s mistake harms no one but him.” A king’s mistake however, harms everyone but the king. Too often the true measure of power lies in the number who are likely to suffer from a ruler’s stupidity. 

Without much ado, this disquisition is focused on condemning the recent government policy of closing its borders – the same government whose fiscal policies have remained inconsiderate of economic realities and welfare of its citizens or whose tax policies violate the canons of taxation. Clearly this government has become the painted devil frightening its citizens.

The closure of the land borders may be the biggest hit yet on the citizens regardless of the genuine reasons given. Understandably, the government is deeply concerned with the rate of importation which if not looked into is likely to cripple the domestic economy, the influx of illegal and prohibited goods and the influx of illegal immigrants through the land borders which have increased security threats. One thing is established -our borders are porous and badly managed. To that extent, we can applaud the government for its reactive measures but before we do that, take note of the African proverb that reminds the Baboon who celebrates the death of the farmer. For that farmer was he who planted the bananas the baboon ate. 

In truth, this policy in another clime or given different circumstances, may not have been condemned, at least not in its entirety but when placed with the present climes and  given factors such as the strength of our economy, the possible negative implication on the citizens, then this policy becomes bad for failing to match up these realities before implementing the same policies.

In simpler terms, Nigeria’s domestic strength is too weak to cater and meet up to the nation’s need which means that Nigeria must in one way or the other rely on some external trade to meet up with the nation’s need, and create the needed balance in the economy. If it intends closing its borders, then it must bear in mind this reality before doing so, or stand a risk of the negative effects outweighing the positive intention of such act. 

Nigeria’s market structure is more of an oligopoly as compared to a perfect competition market and this is notwithstanding how, in principle, we are termed as a perfect competition market as we have very limited handful of producers who dominate the market hence, never vanishing traces of monopoly in the Nigerian economy. This accounts for why the government regulatory agencies should pay more attention to matters affecting our economy. 

Be that as it may, the closing of land borders will further shrink market participation while encouraging domestic producers to become monopolistic since demand will consequently become higher than supply. Whether this was the undertone intention of the government cannot be known, at least not to the public but the fact is that the citizens are hung out to dry and that is worthy of public outcry.

In all of history’s verifiable annals, statistics have never been in favour of shutting borders as veritable weapon for economic growth or as a reactive measure except in extreme circumstances. The far-reaching effect are onerous, obnoxious and too extreme for those locked within the borders as incidence such as; increase in death tolls, starvation and malnutrition  are close consequences of such act. The Bengal Famine in India in 1943, Cambodia (1976), Chinese Famine in 1959-1961 are historical facts to ponder before taking such decisions. 

Characteristically, in 1984, General Mohammed Buhari did shut Nigeria’s borders ostensibly to stop corrupt officials from escaping justice, and then used military strategy in fighting against basic principle of demand and supply by forcing traders to reduce their price. The effect of this was that a lot of traders closed down their shops, an act which threw Nigeria into a paranoia. Starvation, poor human conditions, lack of health facilities became a rising issue that attracted the United States’ sympathy and beckoned on the then head of state to open the borders. Interestingly, the borders remained closed until 1985 when General Ibrahim Babaginda overthrew the government.

If something isn’t done now and fast, it is only a matter of time for things to take a downward slope and then we will have to watch rice disappear from our table followed by every other amenity or vitality and time ticks slowly when you look at the clock and 2023 is over 1,000 days away from today. 

Furthermore, the diametric contradictions of the border closure against Nigeria’s foreign policy only reeks of hypocrisy on the Nigerian government given its ratification of ECOWAS Agreement on the free movement of member states within agreeing countries, and Nigeria’s signature to the African Continental Free Trade Agreement. It won’t be a stretch to anticipate retaliation from neighboring countries and the African Union, as Nigeria is expected to be a key participant to the AfCFTA. The policy only weakens Nigeria’s position as front liners in these organizations particularly with the ECOWAS except there is a “Brexit” move yet to be revealed. If there is anything this government has taught us, it is to expect surprises. Like Zee world, it gets extraordinary every day.

Notwithstanding the above, we may be at the precipice but then we are not beyond saving, and so the following shall be offered as recommendations to wit:

RECOMMENDATIONS
1. The Federal Competition and Consumer Protection Commission must live out its full use. One of which is to advise the Federal Government on national policies upon investigation of such policies, on matters touching the economy, and capable of destroying competition, and so matters as delicate as this with possibilities of altering economies of scale, competition and market prices thereby leaving consumers at the mercy of producers. These factors should be investigated by the commission and necessary intervention is taken to ensure that competition is not crippled and consumers are protected.

2. The government must become deliberate on increasing local production. Nigeria’s economy does not encourage start-ups; SMEs are not giving enough incentives to encourage growth nor are there good enough policies to increase local production of agricultural produce. If Government intends to protect domestic market, then it must be concerned of its growth not just in principle but in practice. By this I mean, being involved in the agricultural sector just as it is in the oil sector and most recently, the technology sector, loan facilities should not be dubious but accessible to local farmers.

3. The reasons given by the Federal government on the closure of all land borders are too flimsy for such reactive measures. It speaks more of our failures than our successes. If the Nigerian Customs can be more diligent in its duties then our borders will become more law compliant. The level of connivance between importers and the Nigerian customs is a contributory factor to the illegal importation of goods, and so if the government believes its news of border porosity, then the Nigerian Customs must as a matter of urgency be revamped and restructured to actively tackle these issues.

4. The purchasing power of domestic consumer is on a decline as income is either stagnant or decreasing while the cost of products is taking an upward slope. If this distress is not attended to Nigeria’s local production, economic strength may never go up and so Nigeria must restructure its cash injection policies to ensure even distribution across all tiers.

5. Towing the advice, as given by Femi Falana, SAN, the land borders of Nigeria must be open to avoid repercussion and retaliation from neighboring countries who are likely to be affected.   

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7 thoughts on “The Counter-Productivity of Nearsighted Economic Policies: Putting Nigeria’s Closed Borders in Perspective

  1. The head of the CBN was lecturing us few days ago on how rice farmers and mill owners were rejoicing, including those who have sold out all their stocks, as a result of the land borders closure. What he didn’t tell us was how many businesses and families the same border closure have destroyed; that lack of comparative analysis that is always missing when those numbers are reeled out is a big misnomer.

    There is a reason for having corporations and MSMEs in every viable economy, if corporations are capable of taking care of everything to the minutest details, there wouldn’t be need for small businesses; fortunately corporations cannot!

    Again, you cannot shutdown a Mama Put seller in Oshodi or Nyanya, for a certain Mr Biggs or Tantalizer, any government that makes policies that encourage such practice has lost every legitimacy; government is there to protect the weakest of the society, before the strongest.

    When a student opens a book to read, but struggles to understand anything in there, the solution is not for him/her to close it, but rather – to look for anyone who could help him/her make sense of those things scribbled on the book. I want to believe that our managers and power brokers can interpret these…

    Reply
    1. Great article! The government has never had our interests at heart. With Dangote’s new venture into rice production, it is safe to say that the border was closed to make sure he has lesser competition.

      Reply
  2. Well detailed work. It captures the current realities of Nigeria. The history books have shown that there will be lack upon the closure of a border and while the ripple effect is to eventually grow the GDP, the plan work must be baked with a nosh up of feasibility. The Government really needs a deepened reflection of your scribbles.

    Grateful for the read.

    Reply
  3. The first step to solving Nigeria multifaceted problems is addressing the mechanism for electing credible persons in power. Until this is sorted we would always have the wrong people, with wrong polices. INEC must be re-organised and made truly independent with no influence from the presidency.

    Reply
    1. Great article! The government doesn’t actually have the wellbeing of the citizens at heart. With Dangote’s new venture into rice production, it’s safe to say it border was closed so he would have less competition.

      Reply
  4. This is a well crafted article. How could the FG close the land borders and still turn a blind eye to the local production of food crops, and yet, don’t provide adequate incentives to the SMEs? More so, the land borders closure could aggravate a retaliatory action from the neighbouring countries that trade with Nigeria. So, What’s the essence of economic integration?

    Reply

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