Emefiele’s Post Covid-19 Marshall Plan for Nigeria : Trick or Treat?

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GUEST COLUMNIST: MAGNUS ONYIBE

When under the auspices of the federal Govt of Nigeria, the CBN Governor, Godwin Emefiele influenced the banning of 45 items/products that he reckoned could be produced locally in Nigeria from being imported and pilling needless pressure on the foreign exchange reserve , he became the butt of the jokes of prominent Western media organizations, particularly the Economist magazine of London , Time magazine of New York and Wall Street Journal, WSJ which stopped short of labeling Nigeria’s CBN Governor, a demagogue for banning items , as ridiculous in their estimation, as tooth pick from receiving foreign exchange allocation from the CBN for its importation.

But following the current lockdown of an estimated 90% of planet earth as a cautionary measure against the threat of the coronavirus pandemic that has already infected over 2 million people and sent to their early graves, lives in excess of 130, 000 worldwide and still counting, Emefiele , the unsung hero of the sickly Nigerian economy , seems to be having the last laugh, as the entire world is currently adopting his much derided policy of restricting the import of goods that can be locally produced.
With this sudden turn of events whereby it is now the best-in-class strategy to restrict import/export, who can we say has been tricking Nigerians into importing everything on earth, thereby creating the existential threat capable of depleting our hard earned foreign exchange income ; and who has been treating us to a new and improved way of conserving our forex income sourced mainly from hydrocarbon, so that Nigeria can have enough to invest in infrastructure such as hospitals and schools ?
You be the judge!

It is such a paradox that the phenomenon of global trade which launched China into the global market arena and subsequently earned the Asian country the enviable status of being the most prolific and biggest factory of the world, is about to become the acheel’s heel of the same China, because that’s where the deadly Covid -19 pandemic now shutting down planet earth is believed to have emanated.

Obviously , the simple principle of what goes up must come down is at play in its starkest reality.
So what an irony that, China that has been the greatest beneficiary of global trade would end up being the biggest loser of global trade , if the global wave of import/export restrictions become the new normal according to the prognostications of Nigeria’s CBN Governor and other economists around the world.

It is not as if nobody anticipated that global trade as we currently know it would not have eventually come to an end. But no one in their wildest imagination reckoned that the end could be so dramatic and would be caused by an invisible enemy such as a deadly virus as opposed to the several protests staged by anti global trade activists against global leaders during their annual World Economic Forum, WEF talk shops in Davos , Switzerland.

Worst still, no one dreamed that a seemingly ordinary virus would so dramatically end trade, which not even the world war l and ll was able stop and which has waxed stronger since the founding of WTO in 1995 , in replacement of the General Agreement on Trade and Tariff, GATT, established in 1948.

But the events of the last four or so months when the coronavirus was believed to have sprung from an animal to man in an innocuous live animal market in Wuhan, Kobe province of China has stunned the best of scientists in the entire world who did not see it coming.
Not even Bill Gates, Microsoft founder and the world’s second richest man whose business ventures had some five years ago made a prognosis of a virus warfare and started preparing against the threat , has been able to halt the spread.

Obviously, Mr Gates anticipatory investment in the firm Global Good , Intellectual Venture with the aim of embedding chips in humans, have proven not to be a match for the highly stealthy coronavirus pandemic now invading and ravaging mankind.

Until the opening up of China by one of it’s leaders considered to be the father of modern day China, deng Xiaoping whose policies culminated into China’s entry into the World Trade Organization, WTO in 2001; an initiative which opened up the market of the estimated 164 member countries of the organization to Chinese products/services; and transformed the previously autarkic Chinese communism driven economy into an open factory for the world, global trade wasn’t such an attractive proposition.
Since founding the WTO , ‘export or die’ became a major global trade mantra.

And the establishment of the private sector driven World Economic Forum , WEF in 1971 gave verve to the inevitability of global trade, as the most powerful in Govt and the wealthiest businessmen/women all over the world started taking time yearly to bask in the splendor of the alpines of the snow capped resorts/villas in Davos, Switzerland, while holding aloft the flag of global trade and promoting its values as immutable , to the consternation of the powerless and poor who detest the phenomenon and therefore hold equally striking protects against it. Fortuitously, the anti global trade activists who entertain the fears that globalization enables the rich to crowd out the poor, seem to be wining the contest as Covid-19 has upended the concept of trade by compelling practically all the leaders of the free world to start coming up with trade policies that make them appear more like North Korean leader Kim Jong-Un , the world’s leader in autarky.

According to Emefiele’s position in the report under review, “As of 10 April 2020, an updated count of total export restrictions by Global Trade Alert Team at the university of St. Gallen, Switzerland suggests a total of 102 restrictions by 75 countries”.
Really? So the concept of export restrictions for which Emefiele received hard knocks has become the new ‘sexy’?
Continuing, the CBN Governor avers that “Vietnam the world’s third largest exporter of rice , suspended granting rice export certificates until the country ‘reviews domestic inventories”

Imagine that the CBN under Emefiele’s leadership did not have the foresight of advising president Muhammadu Buhari to ban rice importation into our country and encourage Nigerians to eat locally grown and milled rice of which the authorities now claim our country is self sufficient ? Nigerians would not only be scrambling around the world for Covid-19 test kits and Personal Protection Equipment, PPEs, being horde by the hitherto high minded advanced economies that now prefer to satisfy their local markets first , our country would also be desperately searching for the favorite staple food- rice in countries like Vietnam and India to feed our people .

After successfully intervening with massive funds infusion into the agricultural sector , as reflected by the drastic reduction in rice import and its current intervention in cotton production as well as in other food value chain which are also looking good, the CBN might have convinced itself that it now has a proof-of-concept that money works when used to intervene in some critical sectors of the economy wisely.

Presumably, that’s what has emboldened Emefiele to offer to plough another N3.5 trillion into critical growth areas that would facilitate a more self reliant Nigerian economy.

But are all or most Nigerians aligned on this quest for food security / sufficiency, the CBN style ?
That’s yet to be seen.

And given the anger and hunger on the streets of Nigeria, stemming from the Covid -19 pandemic compelled shelter-at-home order that has left most Nigerians stranded, since quite a lot of us usually eke out our living based on the odd jobs that we can do to earn about N2,000 to N5,000 on a daily basis to feed ourselves , Emefiele needs to go beyond the bold declaration in his deeply thought through and inspiring proposition “Turning The Covid-19 Pandemic Tragedy Into An Opportunity For A New Nigeria”.
Besides the CBN, the other critical agencies of Govt responsible for mobilizing Nigerians into action and galvanizing their belief in the common good and survivability of our country seems to be missing in action .

In this period of high level of despondency, owing to the compulsory social distancing policy which seems to be the only proven panacea to Covid-19 in the industrialized and advanced society, how do we make more Nigerians share the CBN vision when they are practically starving and unhappy in light of the fact that majority of those who earn their living solely in unstructured system of daily income of a couple of thousands of naira are now without income ? Why are we in Nigeria adopting Western solution to the Covid-19 pandemic hook-line and -sinker ? Would what works in the industrialized economies , work for us in the developing world, given the different local dynamics at play?

In an April 2, 2020 report by the pair of Zachary Barnett-Howell and Ahmed Mushfiq Mobarak of Yale School of Management, USA , titled “Should Low-Income Countries lmpose The Same Social Distancing Guidelines As Europe & North America To Halt Spread of Covid-19 “?, it was revealed that the benefits of social distancing between rich and poor countries differ.

Below are some of the eye opening conclusions from the Executive Summary of the report:
“Social distancing has become the primary policy prescription for combating the COVID-19 pandemic, and has been widely adopted in Europe and North America. We combine country-specific economic estimates of the benefits of disease avoidance with an epidemiological model that projects the spread of COVID-19 to analyze whether the benefits of social distancing and suppression varies across rich and poor countries. This modeling exercise yields the following key insights:

1. Populations in rich countries tend to skew older, and COVID-19 mortality effects are therefore predicted to be much larger there than in poor countries, even after accounting for differences in health system capacity.

2. Social distancing measures are predicted to save a large number
of lives in high-income countries, to the extent that practically any economic cost of distancing is worth bearing. The economic value generated by equally effective social distancing policies is estimated to be 240 times larger for the United States, or 70 times larger for Germany, compared to the value created in Pakistan or Nigeria. The value of benefits estimated for each country translates to a savings of 59% of US GDP, 85% of German GDP, but only 14% of Bangladesh’s GDP or 19% of India’s (read Nigeria )

3. The much lower estimated benefits of social distancing and social suppression in low-income countries are driven by three critical factors:

(a) Developing countries have smaller proportions of elderly people to save via social distancing compared to low-fertility rich nations.(Nigeria’s youth population is estimated to be in excess of 60%.

(b) Social distancing saves lives in rich countries by flattening the curve of infections, to reduce pressure on health systems. Delaying infections is not as useful in countries where the limited number of hospital beds and ventilators are already overwhelmed and not accessible to most.(typical situation of Nigeria)

(c) Social distancing lowers disease risk by limiting people’s economic opportunities. Poorer people are naturally less willing to make those economic sacrifices. They place relatively greater value on their livelihood concerns compared to concerns about contracting coronavirus.

Not only are the epidemiological and economic benefits of social distancing much smaller in poorer countries, (like Nigeria) such policies may also exact a heavy toll on the poorest and most vulnerable” (obviously the case in Nigeria now)
Given the expert analysis above, is the 28 days lock down of Lagos state, Ogun state and the Federal Capital Territory, FCT , the economic power houses of Nigeria, the most optimal strategy for our country to deal with the coronavirus pandemic or a mere copy and paste by our lazy technocrats?

Did the members of the presidential advisory team make any input into the decision to lock down major economic centers and states in Nigeria for a whopping 28 days at a period that crude oil price is selling for less than $20 per barrel in the international market and when budget 2020 was predicated on $57 per barrel ?

In light of the decision to shut down our economy which obviously was not put through the crucible of very rigorous test as it should , are our civil/public servants truly enthusiastic to help President Buhari lift our country out of economic doldrums; or would they be constituting a drag by creating bureaucratic bottle necks on the path of those who choose to respond to the CBN’s clarion call? Why is the star studded presidential economic advisory team absent in this critical period, that l would imagine that such a formidable team is most needed? Questions! questions!! questions!!!

For the avoidance of doubt, l’m not by any means discountenancing the benefits of social distancing in combating a pandemic , but l’m making a case that our technocrats could have tweaked with the industrialized world’s template and come up with what’s most suitable for our peculiar circumstances, since the socioeconomic environment in Nigeria differs significantly with what obtains in Europe, North America or Asia.

Some would argue that such granular details would be the focus of the implementers of what for lack of a better phrase, l would like to refer to as Emefiele’s Post Covid-19 Marshal Plan For Nigeria.
So, l rest my case.

Magnus onyibe, a development strategist, alumnus of the fletcher school of law and diplomacy, tufts University, Massachusetts, USA , and a former cabinet member of delta state Govt , sent this piece from lagos.