Government, food security and the Central Bank

Food security lies at the foundation of national well-being and national power. Bonaparte famously observed that an army “marches on its stomach”.

A viable state is not only one that is able to keep the common peace but also one that secures the lives and properties of citizens while feeding the population and upholding the rule of law.

During the first decade of independence, agriculture was the main base of our economy. We were a major exporter of cotton, groundnuts, rubber, cocoa and palm produce.  Our people were generally well fed. Food was abundant and cheap.

The agricultural settlements in the defunct Eastern and Western regions did serve as an impetus for agrarian transformation. In the North we had marketing boards which served to stabilise rural prices while providing off-takers for surpluses.

I grew up in a missionary village in the glorious savannah of the Middle Belt. The Nigeria of my childhood was an idyllic paradise. I often reminisce on those joyful days of climbing mango trees and frolicking with my late brother and our friends as the happiest of my life.

According to economic historians, the only time Nigeria experienced real famine was in Sokoto, Katsina and Kano during the fifties – in the aftermath of the Second World War — when colonial agricultural policy was redirected towards serving the British war effort rather the needs of our people.

The only other time we experienced famine was during the civil war, when an economic blockade by the federal government led to a devastating famine in Biafra.

The harrowing pictures of kwashiorkor-stricken children continue to haunt me to this day.

The debate on the morality of the blockade evokes the same moral dilemmas as the decision by the Truman administration in the United States to drop atomic bombs on the Japanese cities of Hiroshima and Nagasaki in 1945.

The blockade of Biafra no doubt triggered a humanitarian catastrophe; but the brutal fact is that it also brought the war to a speedy end in January 1970.

The discovery of oil changed everything.

Oil windfalls provided funding for roads and other infrastructures.

More clinics, hospitals, schools and universities were built. But it also led our political elites into behaving like drunken sailors. We have been afflicted with what economists term “the Dutch Disease syndrome”, characterised by high exchange rates and a shift of all productive forces into the import sector to the detriment of agriculture and industrialisation.

The commanding heights of the economy were geared towards catering for the appetites of the urban elites. Local food production became unattractive. It made more sense to import food from abroad than to go through the wahala of local cultivation.

The import-licensing system became the vehicle for massive corruption and rent-seeking. The cement scandals of the post-war era became the metaphor for collective folly.

Oil has also proved to be bad for democracy. A system anchored on collecting rents from international oil companies means that the rulers feel no sense of accountability to the citizenry.

Political theory has established some correlation between democratic accountability and the extractive capacity of the state.

When a state extracts taxes from its citizens it reinforces the social contract and establishes what the Nobel laureate Frederick Hayek termed “the constitution of liberty”.

From the seventies to our day, all sorts of schemes have been put in place to promote food security; from Operation Feed the Nation (OFN) to the Directorate for Food, Roads and Rural Infrastructures (DFRRI).

I once drew the ire of the great agricultural economist Francis Idachaba at a seminar in the eighties. With youthful exuberance, I casually remarked that his DFRRI was a “monumental disaster”.

If there was a cane nearby, he probably would have flogged me. My own field work had shown that the return on investments were way below the cost in expenditure.

I spent some of my formative years schooling in France. I used to spend summer vacations with an adopted family in the rural Auvergne region.

After a day’s work we would have a great meal of lamb chops with home-made bread, wine and cheese; reciting the poetry of Lamartine and Anatole France.

From Charles de Gaulle to Pierre-Mendès-France to Valéry Giscard d’Estaing and François Mitterrand, the French do not muck about with their food.  When they say “nous sommes tous des paysants” (we are all peasants), they literally mean it.

French economic planning is geared towards ensuring food security first and foremost. They have also invested heavily in rural infrastructures and in rural schools, health facilities and artisanal industries.

Their famous Crédit Agricole emerged as a rural bank for providing affordable loans to rural farmers. Some of the brightest graduates from the super-elite École national d’administration are sent to work as rural administrators.  French public administration is rigorous and effective – keenly aware that the presence of governmental authority is vital to keeping the rural peace and ensuring long-term prosperity.

Last week our Presidency gave an order to the CBN to cease provision of foreign exchange for the importation of all food items.

The directive was based on the presumption that our country is already self-sufficient in food. During a recent TV interview, I described it as a “primitive” way of making policy, as it was seemingly on a whim rather than a proper technical-scientific study, with data showing where we stand relative to food self-sufficiency.

Whilst it is true that we have made significant progress on local rice production, with the import bill having fallen by more than 70 percent over the last three years, it is a logical fallacy to jump to the conclusion that we are now a food self-sufficient country.

Truth is, there is hunger in the land. Recently, there was an outbreak of famine in some of the IDP camps in Borno.

Famine would have broken out throughout the country today were it not for the extravagantly costly Anchor Borrowers’ Programme launched by the CBN.

Government has sabotaged its own policies by conveniently looking away as murderous herdsmen militias ravage the countryside; killing, maiming and raping — an undeclared war against an unarmed and defenceless people. Many farmers are keeping away from their farms for fear of being attacked by rampaging herdsmen militias.

The strategic intent of the ongoing Jihad is to import millions of foreigners  to change our ethnological composition – to dispossess poor peasants of their ancestral homelands by force of arms.

What has failed in the Central African Republic cannot succeed in a sophisticated country like ours. The indigenous peoples of Nigeria will defend their ancestral homelands to the very last man.

I humbly submit  that those who are committing rapine and murder to enforce a discredited policy are labouring under a curse. They will sooner or later eat the dust of their own wickedness.

As a student of political economy, I know that no country can claim to be totally self-sufficient in food, or, indeed, anything else for that matter.

International trade theory since David Ricardo, Ellie Heckscher, Bertil Ohlin  and Jagdish Bhagwati establishes that global welfare is best enhanced when countries concentrate on those goods in which they enjoy the highest comparative advantage.

Even if we could produce temperate products such as wheat, grapes and apples, the costs might be prohibitive.

There are cases where it is cheaper to import than to produce locally.  I also suspect that the new directive aims to take the wind out of the sails of states such as Akwa Ibom and Rivers that have decided to import cattle in order to revitalise their ranching industries.

Some local notables have allegedly been bribed to acquiesce to the iniquitous Ruga policy. Blocking access to foreign exchange for food imports may be in furtherance of more sinister objectives than we imagine.

Government also has no business dishing out diktats to the CBN. I  know that central bank autonomy is a delegated privilege granted by parliament to ensure it works for the long-term common good rather than short-term electoral-political calculations.

Today, I am led to believe that our venerable apex bank has all but lost its autonomy as enshrined in the CBN Act 2007; captured by vested interests in government and the private sector. Multiple exchange rates exist to cater to the selfish avarice of vultures. We hear these days that they are allegedly forced to pander to all sorts of shadowy people; including hiring people whose principal qualification is that they are children of high notables while children of nobodies with first class honours are wandering the streets.

I innately dislike breathing down the necks of my former colleagues who often have to operate under difficult conditions. But I humbly submit that a central bank is not worth the name  if it is not manned by the best brains that a country can muster.  The CBN that some of us knew was a world-class merit-based national institution. Today, the glory has departed. How are the mighty fallen!

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