Money  

Imports make us rich

Dr. Ogbonnaya Onu lamented that Nigeria had spent N49trn importing various things in 17 years. PHOTO: Financial Times

Since the APC government came into office 2 years ago, hardly a day goes by without some government minister or official reprimanding the public about the evils of importing goods that can be produced locally. The Agric minister, Audu Ogbeh, often leads this charge. He has repeated several times that the volume of importation into Nigeria is ‘just too much’. Just last week, after the weekly FEC meeting, Dr. Ogbonnaya Onu lamented that Nigeria had spent N49trn importing various things in 17 years. It is safe to say that one of the APC’s policy aims is to reduce importation of any and everything into the country.

The Nigerian media enables this narrative as well. Every week there is a story in the papers about how Nigeria is ‘losing’ some billions of dollars importing this or that into the country every year. The country is in a recession so Nigerians are hardly in a good mood. Finding someone to blame for the country’s economic woes won’t be a bad idea if only to allow people vent. Imports from some distant land fit the description of a scapegoat.

To call this position economically illiterate will be an insult to all well-meaning illiterates out there. Beyond that, it is dangerous and poisonous to repeatedly spread a message that demonizes imports at a time when Nigerians are vulnerable. Policymakers who do it are sowing the wind from which they are sure to reap a whirlwind. A great deal of economic progress in a country is dependent on what people believe. If people come to believe in policies that foster poverty, then the work of anyone who wants to push through economic reforms is made much harder than it ought to be.

A country that cannot import things is a poor one. One can imagine that the people of Central African Republic or North Korea would like to have this problem of ‘just too much’ importation that Nigeria has. Imports are not free – you pay for them. That is, wanting to import is one thing, having the means to back that up with actual cash is quite another thing. We can look at it from another angle as well – in a war, one of the first things countries do to each other is to try to block off imports to the enemy country. We saw this very tragically during the Biafran war when Federal Forces captured Port Harcourt and enforced a blockade with devastating consequences. Perhaps the Federal Forces should instead have left Biafra to import itself into penury and destitution?

Imports are the things that make us rich. But to access those riches, we have to export the things we either don’t need or those we have a surplus in. This is because there are only 2 reasons to import anything – they are not available locally or they can be obtained cheaper from abroad. In both cases, the people importing are made richer by that ability to import. If you can access goods that are not locally available, your life is made much better. Imagine if every country had to learn how to manufacture phones before having access to them. Or consider a man who earns N40,000 per month. A bag of foreign rice is N10,000 while a local bag is N20,000. Which one makes him poorer? Insisting that he must buy the more expensive local rice simply makes the farmer richer at his expense.

Beyond the individual level, this demonisation of imports does damage to the much larger economy. If it is cheaper to import certain goods which are available locally, this tells us that Nigeria is inefficient at producing that particular good compared to the country where the goods are imported from. Thus, by forcing people to buy locally through the banning of imports, many people are attracted to that inefficient local industry. There is no way a country can get richer by diverting more resources into an inefficient industry. Some people might get richer, but the economy as a whole will be poorer. Cement is a perfect example of this in Nigeria of today. The people who sell cement are billionaires but Nigeria is much poorer on account of all the houses and bridges that are not built because cement is a lot more expensive than it should be.

The tragedy is complete when the same government that demonises imports realises that this rhetoric has real costs. The National Bureau of Statistics’ Shipping and Port Activities report for 2013 – 2016 is a very sobering read. In 2013, a total of 5,369 ships brought goods to Nigerian ports. By 2016, the number had dropped to 4,025. Going by the government’s war on imports, this should have been a cause for celebration. But have you seen any government minister beating his chest about this number as proof that the APC is ‘working’? To put it mildly, this drop in the number of ships has not coincided with economic happiness in Nigeria. Of course, this has also prompted a drop in Customs revenues to N898bn in 2016 from N977bn in 2014. Does this explain why Customs officials have left the ports and are now harassing Nigerians anywhere they can find them? A foreign journalist visited the Apapa Port last year and found the whole place deserted with officials playing football instead.

Rhetoric matters. Constantly repeating that imports are the root of all evil in the Nigerian economy has consequences. After a while, people start to believe it and then poverty becomes harder to dislodge. Nobody gets rich this way. We get rich by trading away what we don’t want for what we want. And life gets better for us in the bargain. Being able to import things is essential to this process. If you are wearing shoes with laces, bend down and try to lift yourself off the ground by pulling the laces upwards. That is what a country that wants to produce everything and import nothing is trying to do. The only guaranteed outcome, is more poverty.

In this article:
APCAudu OgbehOgbonnaya Onu


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