AfCFTA as Nigeria’s economic tsunami

While Nigeria’s economy has been chronically afflicted by poor strategic planning, policy inconsistency and operational incongruence that continually reduce growth below potentials, the current pressure on Nigeria to sign the African Continental Free Trade Agreement (AfCFTA) is very dangerous, hence this intervention to prevent another disastrous policy blunder.

Any Nigerian adult by 1987 remembers the so-called “national debate” on trade liberalisation policy and IMF loan in the Structural Adjustment Programme (SAP) between the-then prominent “industry chieftains” who asserted that the Naira’s over-valuation was constraining economic growth and their opponents who correctly predicted its current resultant economic quagmire: spiraling inflation, free-fall Naira valuation, high external and domestic debts, infrastructural collapse, de-industrialisation, explosive unemployment etc in a virtual mono-export commodity economy. Since September 1987 when the policy took effect, Nigeria became a global trading outpost for the developed economies. While most of the opponents of the policy have died, some of the protagonists are still alive to experience the consequences of their “successful” pressure on the-then government on the nation, their own businesses, children’s and grand-children’s lives.

Also, Nigeria’s downgrade as a pariah nation under Abacha diverted the flight of international capital from the South-east Asian economies to the newly “independent” South Africa instead of Nigeria after their financial crisis of 1997 to starve the economy of the critically needed Foreign Direct investments and worsen the ten-year impact of SAP. It was after this that most European multinationals re-located their African regional offices to South Africa to oversee their Nigerian subsidiaries. The subsequent invasion of the Nigerian economy with “South African” business investments in the telecoms, entertainment and hospitality and retail sectors is the result of that migration of international capital grafted on local technological/infrastructural development.

Concerned Nigerians should ask what happened to the combined Unilever (Lever Brothers and UAC) business operations (manufacturing in three-shifts with robust product portfolio) and trading subsidiaries that employed several thousand people in different parts of the country. Why is the combined Unilever business volume now less than 10% of its pre-SAP level? What about the multinational pharmaceutical companies that competed aggressively in manufacturing and distribution operations, compared to now that they only co-share a single warehouse? Do Nigerians no longer need medications? Why and how did the several companies in the textiles and footwear industries collapse? Do Nigerians no longer wear clothes and shoes? What about Dunlop and Michelin? Do Nigerians now drive tyre-less cars and trucks? What about the cosmetics, soaps, detergents, food and beverage industries? Why has Nigeria become the global market for used cars, clothes, shoes, furniture and other household items while most of the industrial estates have been converted to churches and mosques, post-SAP? Why are several thousands of Nigerians eking livelihoods from toxic scavenging in industrial and household wastes while many other thousands have died as illegal emigrants in Sahara desert, Libya, Mediterranean sea and from illicit drug/human trafficking and prostitution for elusive survival?

The calamity of trade liberalisation in SAP was followed up with the National Economic Empowerment and Development Strategy (NEEDS, 2003-7), ostensibly to reduce the gruesome degeneration of the economy through SAP, using the comparative-advantage paradigm to expand her participation in the new wave of global trade liberalisation through the WTO that penalised economic subsidies. It “canonised” the “government-has-no-business-in-business” cliché that advanced the privatisation/commercialisation of public enterprises which has officially recorded about 35% failure to date that could have been much higher without government’s post-sale financial subsidies. Also, Nigeria received $18 billion rebate from $33 billion debt as debt relief package to increase her import financing capacity. But NEEDS became Nigeria’s attempted second-degree economic murder through the severe collapse of socio-economic infrastructure, several factory closures as import-trading increased, massive importation of petroleum products began, fake-product industry increased and very few multi-billionaire traders emerged while unemployment, illegal emigration and socio-economic crimes surged! But developed economies release monthly data of new employment from manufacturing operations while Nigeria has been entangled in fiscal deficit web over the last 30 years. Should this continue indefinitely?

Meanwhile, the economic and security burden of ECOWAS on Nigeria as a millstone tied round her neck for facilitating terrorism and other trans-border crimes, the smuggling of contraband commodities from Euro-Asian countries through member-countries into Nigeria as well as the loss of thousands of jobs through the re-location of many manufacturing businesses from Nigeria to these member-countries due to infrastructural deficits, have become choking, politically and economically. Nigeria’s economy is in chaos partly because of the impact of smuggling activities on the agricultural and manufacturing sectors in addition to the financial parasitism of smuggling imported petroleum products as well as by destroying employment opportunities for several millions of her citizens, many of who have been forced into crimes to compound insecurity problems that further compel more scarce resources for combating crimes. This was possibly why President Buhari was recently out-smarted by the neighbouring countries to prevent the shut-down of Nigeria’s borders for stemming the overwhelming security and economic problems through their subtly honorific “bribe” of his unsolicited election as ECOWAS Chairman as most of them survive significantly on trans-shipment incomes from Euro-Asian countries into Nigeria.
To be continued tomorrow.