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CBN’s lessons on local production 

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Building a strong domestic economy shouldn’t be a rocket science especially in Nigeria where there is abundant natural and acquired resources from which whatever level of prosperity can be created to make life better. What is rather lacking is the factor of visionary leadership to mobilise these abundant resources towards value creation. All the benefits of a relatively self-reliant economy have been articulated in ceaseless advocacies by the media and other organs of public good. Government has curiously refused to heed. And there is really nothing new to say except to add that the Central Bank of Nigeria (CBN) has managed to stand out in this season of anomie as about the only agency of government that has pushed beyond endless advocacy and lamentation to implement clear-cut policies to change the narrative.

True, until the COVID-19 pandemic, there were no clear ways to test the efficacy of the various initiatives of the CBN to ramp up local production. But when the pandemic peaked and international interconnectivity including trade almost came to a halt, necessity became the key success driver in local rice production for instance. People who had waited with misgivings to see how the massive importation of rice from Southeast Asia would stop as a result of increased local production witnessed the magic as various brands of locally milled rice from across the states of the federation replaced imported brands in local markets and stores.

It is a major policy success of this administration but the quarter to thank, notably is the CBN whose Anchor Borrower’s programme on rice production made the whole difference.

Even so, the point must be made that getting Nigeria to produce for itself is not as simplistic. There are just too many factors militating against the dream and even if we were to have a hundred Central Banks of Nigeria with the same drive and enthusiasm, nothing would change without a clear national consensus on a number of issues. For instance, there should be some consensus among diesel importers, generator importers and rogue public officials at the power ministry and the national oil company, Nigerian National Petroleum Corporation (NNPC) to change the narrative on public electricity supply in Nigeria. Same way, it will require a consensus of players in the real sector to invest in research and development (R&D) to integrate on raw materials and save the country the perpetual agony of importation of raw materials for the manufacturing sector. In fact, some people including manufacturers now think that the CBN solely exists to build foreign reserves to sustain the importation of raw materials for the manufacturing sector. To think that way is a sure path to irrecoverable economic doom.

In other words, while government through its various agencies like the CBN should work to build the environment for local production, there must be an attitudinal and even operational change on the part of players and everybody in the country so that the task of making Nigeria to produce for itself will become a national culture. That way, the CBN and its Governor, Mr. Godwin Emefiele or any other state actor for that matter, would not need to wail to high heavens before things are properly done.

For the first time, the federal government appears to have endorsed the templates of the CBN with the announcement of zero forex allocation for the importation of food items and fertilizer. In fact, government should do more to include all items that can be produced locally but which are imported to put the domestic currency on perennial pressure. The CBN cannot be wrong. It will only take the initial pains to achieve all the gains of a producing economy. It is either we produce or we die reading from lamentation book. Lamentation has never been a strategy for growth.

There is something else that requires to be delicately managed in the great march to national rebirth.

This is politics. It should not be made to come before or drive development. If anything, it should be the other way round. That is, development should be made to drive politics. This is the standard everywhere there has been real human and infrastructural transformation. In truth, this has been the biggest factor militating against the transformation of the country. It is the reason a rail line from Katsina to nowhere would rank as a government priority while it would take forever to connect the commercial and industrial nerve centres of Lagos, Kano, Port Harcourt, Kaduna, Onitsha and Warri with rail lines. For instance, why should we continue to search aimlessly for a Nigerian car when Innoson Motors is beckoning to be embraced? And why should the country be contemplating sinking public resources in floating a national air carrier that would be mismanaged and killed in no time when Air Peace, for instance, has steadily demonstrated capacity to bear the Nigerian flag internationally?

What we are saying in clear terms is that even for the CBN’s cocktail of interventions across sectors to yield good results, the orientation must change at the levels of leadership and followership. Take public electricity for instance. Nothing will change if its improvement is driven by politics and not development. It is only here in Nigeria that a thermal power station would be built thousands of kilometres away from the source of gas in the heart of the Sahel and a bigger budget would be created to lay pipes from the gas source to it and even much bigger budget to perpetually protect the pipeline facilities from vandals. Enough of this mismatch and absence of political will to manage priorities in the context of development.

All said, the COVID-19 pandemic has remarkably exposed the country to a new reality. That is, without local capacity to meet local consumption, the slide to national doom cannot be stemmed. This has also been the sermon of the CBN, long before COVID-19 became a global health phenomenon with devastating economic consequences. The only way to go therefore is to intensify the CBN’s gospel on cultivation of local capacity in the production of goods and services. Let’s borrow a leaf from Kahlil Gibran, a Lebanese American writer, poet and visual artist who counsels on this score: “…Pity the nation that wears a cloth it does not weave and eats a bread it does not harvest…”


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