MAYBE BREAD WILL DO IT
Several months ago I made a promise to myself to not bother about Nigerian politics and government policies because it was madness I was tired of talking about. Today however I’m fresh out of law school, silver or gold I have not, I’m also unemployed so naturally I have to take it out on the chief cause of my woes: Nigeria.
This week in the news we have been inundated with various wild stories, wild to the un-Nigerian mind but very much within the absurdity that is the Nigerian reality. From allegations of terrorist affiliations levelled against a top serving government official to an FX ban on wheat and sugar by the central bank of Nigeria.
On Friday morning the central bank announced that it will be placing wheat and sugar on its FX restriction list. Note you’ll recall earlier in the week, Dangote Industries and BUA were reported to be at loggerheads. Now I’m not saying it has anything to do with the FX restriction but you know, if it quacks like a duck, moves like a duck and swims in a pond, maybe it is a duck.
The CBN’s announcement comes just as inflation rate in the country hit an all time high of 18%. In today’s Nigeria, people are hungry, very hungry. Salaries have remained static while the price of goods increase on a weekly basis. We are living in scary times, ours is a harsh reality. So it begs the question, what is the rationale behind the CBN’s latest announcement? What could be the positive impact of such decision on the economy and the lives of the average Nigerian?
Let me just state right now that I do not see any positives that could arise from the recent actions of the Nigerian government. I am not interested in playing devil’s advocate especially when millions of people are facing hunger and extreme poverty. Surely the ban on importation of rice should have taught us the folly of restricting import of items, especially food items, which we lack the capacity to produce. Even a first year economics student would not be caught making the decisions which the drivers of the Nigerian economy have made in these past few months. For how long will the government continue to make policies which only have a negative impact on the common man. At this point it almost seems like the Nigerian citizen is an experimental lab rat, being subjected to cruel policies from a government that has no desire to provide a better life for them.
According to the United States Department of Agriculture, Nigeria produced only 60 tonnes of wheat in the years 2018, 2019 and 2020. In those years wheat consumption was 4760, 4900 and 4319 tonnes respectively. Nigeria produces only about 2% of the wheat it consumes and it is under these circumstances that the CBN governor has deemed it wise to restrict importers from accessing FX in order to spur local production.
Turkey is one of the world’s largest consumers of wheat and is also a top producer of wheat but even with such production capacity and self sufficiency, importation has not been banned. It is sad that we have still not learnt that restricting import will not improve local production nor will it boost the economy. People are simply going to go hungry and become poorer, that’s all!
Wheat is a key ingredient in the production of various food items, from bread to noodles to spaghetti, same as sugar, think your pastries, drinks and so on. All of which are consumed daily by the average Nigerian. Any type of ban at this point without local sufficiency will only serve to further fuel inflation. Consumer goods produced with the said items will of course increase, and probably never go back to its previous price.
Historically, rising food prices have never heralded anything good. One of the major causes of the French Revolution was food shortage coupled with rising unemployment rates and an increase in population, all of which Nigeria is currently facing. Although many other factors cause social unrest, food crisis often rank high and research has shown that there’s a correlation between hike in food prices and increase in riots, unrest and revolution. The question is, will food (bread) be the turning point for Nigerians? In the years leading up to the 2015 elections, the previous administration faced scathing criticism from citizens, opposition and the international community, and rightfully so by the way, for its failings. Today however, one bad policy after another, Nigerians seems to have made peace with adjusting to whatever madness is inflicted upon us. Maybe just maybe, this time around, with a 23% food inflation, rising prices of staple foods and a looming food shortage, we will start to ask our elected officials hard questions. I do not have high hopes though, we are a people strongly divided across ethnic and religious lines and we often let the trivial cloud our sense of what is right and wrong. Then again, the threat of hunger might just be the thing to clear such biases.
Anyway this policy is just one more in a long line of questionable moves rolled out by the government to 'boost' the economy, which will eventually be cancelled of course but will leave Nigerians with lasting negative effects. Like they say, elections have consequences and I guess we are living with ours.
