- Cites India’s ban of onion export, EU’s high tariff on agricultural products to discourage import as protectionist but necessary
The Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, says the current closure of the country’s land borders is enhancing job creation, particularly, in rural communities. Emefiele, who was restating the position of the federal government since the border closure in October, said the initiative was also leading to the resuscitation of local industries.
Emefiele spoke in Lagos at a recent forum organised by the Chartered Institute of Bankers of Nigeria (CIBN). He stressed that policymakers must concentrate their efforts on making their own citizens lead better lives, and worry less about the country’s neighbours.
The CBN governor noted that while monetary policy might not be able to solve all the country’s structural problems, by influencing financial conditions under which farmers, SMES and manufacturers could access credit, the apex bank would be able to support growth in the agriculture and manufacturing sectors, as well as non-oil exports.
He said the measures would aid government’s effort to promote sustainable growth of the economy. They would also ensure that the economy becomes less susceptible to changes in crude oil price, he added.
According to Emefiele, “I recognise that some of our policies have been construed as protectionist in nature, but we need to keep in mind that leaders are first and foremost accountable to their own citizens at home.
“And if the vagaries of international trade threaten the comfort of these citizens, leaders are compelled to react by inducing changes in the flow of goods and services, in order to improve the lot of the general public and in attaining their nationwide growth objectives.”
The CBN governor cited the issue of onion prices in India, explaining, “As you may know, Indian farmers export about 2.2 billion kilograms of onions per year, which is worth over $510 million every year. Due to excessive unseasonal rains earlier this year, production was significantly low and so, local prices increased to a six-year high.
“This surge in prices hit Indian households adversely given that onions is staple of Indian cookery. It also led to significant pressure on inflation in the country. So what did Prime Minister Narendra Modi’s government do?
“Last month, they banned the export of onions from India until further notice, with the immediate result being more onions for local consumers at rapidly decelerating prices, putting a dent to headline inflation.
“Although protectionist in nature, this is what great leaders do to improve the lives of their people because the country and its people must come first.
“Although this ban has meant higher onion prices for India’s neighbours, the government could care less because it is a win-win situation for its own citizens.”
Emefiele also said, “Another recent example is the decision of the London City authorities not to renew the operating license of Uber in London.
“Regardless of the reasons they may have adduced for this decision, the effect is that it is a boom for local taxi drivers in the city. This is a step meant to keep jobs in the hands of indigenous British drivers. This is what great leaders must do to help their people.
“Let us also not forget that the EU’s Common Agricultural Policy (CAP) continues to impose substantial tariff rates on many agricultural products with the main aim being to discourage imports and increase prices for domestic European farmers in order to increase their income.”