This uncertainty is too weighty

Written By Bolaji Akinola

A friend called on Thursday to lament bitterly about her container, which the shipper refused to load in China for shipment to Nigeria.

“Did you have contraband items in the container,” I asked since I really could not fathom the reason for the shipper’s action.

“No. Absolutely not,” she replied.

This friend went ahead to tell me the content of her container and of course they’re legitimate items.

So why was the shippers reluctant shipping it? My friend explained that the shipper was warned from Nigeria that there is a new Customs Comptroller-General whose policy direction was hazy and since no one knew what he was up to and no one was willing to stick out their neck, it was advised that he played safe. ‘Siddon look’, ‘wait-and-see’ until everyone is sure what the new Customs boss is up to.

And this is the attitude of business. Once there is uncertainty in the socio-political environment, everyone withdraw into their shell. The implication is that the economy will be at a standstill. Jobs will be at risk and recession begins to loom in the horizon. The contraction witnessed in the economy in the past two quarters is a clear indication of this with the Central Bank of Nigeria Monetary Policy Committee warning that the country could slide into recession by early next year.

The uncertainty predates this government but one would have thought that it would propel the regime into immediate action.

Retired Col. Hameed Ali certainly has some plan up his sleeves but he’s been quite about it. His mute stance makes it difficult for his field officers especially the Customs Area Controllers who interface directly with the business community. They in turn begin to take steps very carefully like the next Pope to be. They stifle business in the process. I suppose that’s the mêlée in which my friend’s container is trapped.

The scenario is not any different at the centre as President Buhari’s economic policies remain hazy.

No one will make serious monetary commitment into this economy for now, hence traders are not importing. They are not importing because of the fear of being caught unawares. For instance, what is government’s stance on the auto policy, rice policy, fish quota policy etc?

The worsening fate of the naira is not helping matters either. Volume of general cargo importation has already dropped by as much as 30%. Jonathan government’s unpopular and ill-advised auto policy has compounded the woes for vehicle importers. The number of automobiles coming into the country has already dropped by half with the ports of neighbouring countries especially Cotonou Port reaping the bounties of our imprudence. Cotonou Port has practically become ‘Nigeria’s largest port’.

The naira hit a record low against the US dollar this year leading to concerns that an extended period of limbo will have wider consequences. The stock market has also been badly depressed by the socio-political environment. The Nigerian Stock Exchange has become one of the worst performing in the world.

We are a nation on pause. Everything waits till government policies unfold.

With no cabinet in place, CBN Governor Godwin Emefiele finds himself discussing policies usually reserved for the Finance Minister.

The CBN policy restricting the sales of foreign exchange to importers of select items has compounded the miseries of the business community. The policy is a dark alley leading to further desolations.

“I read an advertisement in a paper that shortly after we announced the foreign exchange exclusion for the importation of tomato paste they advertised for almost 1,000 jobs,” Emefiele said in justifying the policy, citing the example of a tomato paste company, a sector that experts do not in fact expect to flourish now.

Emefiele has ruled out another naira devaluation but the MPC last week loosened monetary policies to inject liquidity into banks, which had been forced to transfer government revenues to a CBN account as part of an anti-corruption drive.

Are we seeing a repeat of what General Buhari did in 1984 when he stepped up import controls, stifling the economy?

This uncertainty affects straightforward business decisions every day. And I can’t really think of another time in recent memory when it had been this weighty. 

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