FIVE months after Finance Minister Olusegun Aganga issued a circular that removed cassava, textile, toothpicks and vehicles aged over 10 years from the ban imposed since March 2004 on their importation, Federal Chief Economic Adviser Kassey Garba has revealed that government was mulling over reverting to the status quo ante. She spoke in Enugu during her tour of industries and manufacturing companies in the South East Zone from where she would go to the North and other parts of the country in an apparent mission of damage control. Among reasons given for the promised change of mind were, first, the desire to promote made-in-Nigeria goods since, according to her, they were not inferior to imported ones; second, new arguments which were not clarified in the report; and third, discovery at that stage of her tour of strong entrepreneurs who were ready to build the countrys industrial base but who faced challenges like power which government was meant to address. The foregoing is official admission that, one, the removal of some commodities from the import prohibition list was carried out without necessary consultations; and two, government has failed to provide the infrastructure to help achieve the objectives of the initial policy. With regard to the former, instead of Garbas cajolery and dangling of policy review at an unspecified future date, true contrition for the wrongly issued circular requires its immediate withdrawal by the Federal Ministry of Finance through a counter-circular. With regard to the latter concerning government failings, the lingering challenge of adequate power supply which government has contended with since 1999 unsuccessfully actually offers a standing argument for a hastened return to, if not an expansion of, the initial import prohibition list. The national interest will be best served if concrete steps are taken urgently to counteract the earlier circular as such an action requires 90-day lead time to come into effect. Such a move will also help maintain policy consistency, the absence of which is often listed among the factors responsible for governments many failed economic programmes. The reasons rolled out for the revision are preventable if government agencies work in concert, as indeed they should. And the expected revenue receipts there from are inferior to the overall national objectives of the initial policy.To wit, while the ban lasted, government was constrained to live in self-denial, as the domestic marketplace was flooded with the supposedly banned commodities. But the Customs could not officially collect duties on banned commodities because to do so amounted to accommodating contraband trade. Yet, for trade in contraband to flourish, smugglers should have easy access to foreign exchange with which to import the goods. Long-running apex bank foreign exchange practices which the IMF/World Bank openly recommended in 2006 provide a boon to negative economic activities such as smuggling and speculation in foreign exchange and capital flight. And for paltry bribes, smugglers got the Customs to fling the countrys borders wide open. Although it superintends the Central Bank and the Customs, which between both could achieve near water-tight elimination of banned commodities through concerted and honest implementation of the existing laws, the Ministry of Finance chose to change the law (ironically on the advice of the World Bank) in order to harvest the perceived revenue that leaked to smugglers and corrupt Customs officials by allowing some items to be imported upon payment of varying tariffs and levies. Curiously the subsequent draft federal 2011 budget contained no estimates of Customs revenue takings derivable from the new measure. But as government soon found out, the November 2010 revision of the import prohibition list was retrogressive. It is necessary to stress that the Minister of Finance or the executive arm of government is not a lawmaker but the implementor of the countrys laws. It is the preserve of the National Assembly to define the scope of banned goods. The continued practice by the executive arm of granting, suspending or reversing tariff waivers including the ownership composition of companies is an inherited military mindset that should stop. We may now advert our minds to the grand policy objectives. One, rigorously enforced ban on imports of specific goods and services is the handmaiden of import substitution industrialisation that commands consumption of locally produced goods and services. Government must lead the way in promoting consumption of local products. Two, given the size of the Nigerian market, shutting the door on imports both promotes foreign and stimulates domestic investment in any protected sectors. That creates jobs and engenders real sector growth. Three, when investors are guaranteed the domestic market, they are not dissuaded by infrastructural challenges, which could be sidetracked by resorting to stop-gap solutions. The ubiquitous factory-owned mini-power plants are testimonies to the hardiness and perseverance of investors. If and when adequate power supply comes (this will not materialise during the tenure of one or two successive elected administrations), manufacturers will discard generation of electricity for own use. But all businesses groan under the insidious mother-of-all challenge, which the economic adviser will not find physically in the industrial layouts to be visited but which has to be rooted out as the precondition for economic success. Reports on the Nigerian economy have dedicated a great hall of infamy to excessive fiscal deficits together with their adverse effects for precipitating the collapse of all national economic programmes. However, blame for the excessive deficits does not lie with the annual budgetary revenue receipts and the usual budget under-implementation levels which signify actual budget surpluses. The culprit yet again is the failure by federal fiscal and monetary agencies, which despite exercising exclusive responsibility have over the years refused to handle our national fiat currency appropriately in conformity with the stipulations of the yearly Appropriation Act, the Fiscal Responsibility Act and the Central Bank Act. But as soon as that miasmatic challenge is broken at no cost whatsoever to the treasury, the need to shield high-cost industries with specific import ban and restrictive tariffs will rapidly yield place to an economy that posts conducive conditions, boasts full employment and produces its needs competitively with abundant surplus output for export.
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