Always these episodes come about in times of economic difficulties. At such times it is easy to peddle the narrative that local economic interests are being hurt by the predatory and rapacious activity of foreigners. Across the continent, governments then resort to imposing severe restraints on the activities of resident non-nationals…
There’s that quality to the Ghanaian government’s recent treatment of the commercial interests of its Nigerian community that reminds one of the mutual forced exchanges of populations that was the highlight of diplomatic relationship between both countries in the 20 years to the early 1980s. This time around, although increasing strictures on Nigerians at Ghana’s entry points don’t quite approximate mass expulsions, a number of new rules ― including the new US$1 million minimum capital required for foreign-owned businesses under the Ghana Investment Promotion Centre Act (1994) ― look set to achieve the same result.
Always these episodes come about in times of economic difficulties. At such times it is easy to peddle the narrative that local economic interests are being hurt by the predatory and rapacious activity of foreigners. Across the continent, governments then resort to imposing severe restraints on the activities of resident non-nationals, or the more eyeball-friendly expedient of simply kicking them out.
In this sense, even when Ghana’s recent treatment of Nigerian’s commercial interests in that country is considered par for both country’s diplomatic course, it is not a uniquely Nigerian or Ghanaian experience. Across the continent we have ample examples of governments acting against resident “others” as part of their responses to economic crises. Homicidal xenophobia in South Africa, although cut from the same cloth, deserves comments under a separate section. In August 1972, the Ugandan government gave its nearly one million-strong Asian minority 90 days to leave the country. In 2000, Zimbabwe seized 4,000 white commercial farms without compensation. In 1972, Uganda’s Idi Amin Dada Oumee was simply “giving Uganda back to ethnic Ugandans”. In 2000, Zimbabwe’s Gabriel Robert Mugabe was simply compensating for the ills of white minority rule.
Almost without fail what is advertised as an attempt to transfer resources from foreigners to nationals, as part of an economic empowerment programme, collapses into a programme of political patronage. In Uganda, Amin’s inner circle ― more fawning than competent ― got the pick of the newly liberated assets. In Zimbabwe, ZANU-PF hacks ― again, more brutal than competent ― took over the farms after their white owners had been forced out. The success of the Gujarati community in Britain, following their expulsion from Uganda is mirrored by the collapse of the Ugandan economy thereafter. Same way that the white Zimbabwean farmers’ continued success across the border in Zambia mirrors the failure of the Zimbabwean economy.
…as in Nigeria’s gut opposition to “non-Nigerian businesses”, it is the economic illiteracy behind it that should disturb us more. By erecting barriers behind which local businesses may thrive, we grant them access to monopoly profits.
Of course, neither cohort of the parvenus in both countries was in a position to profitably exploit what they had suddenly risen into. Should we, then, worry even as we sign and agree the African Continental Free Trade Area (AfCTA) agreement that economic nationalism seem to be set for a new outing under the sun?
Yes, we ought to. Yet, as in Nigeria’s gut opposition to “non-Nigerian businesses”, it is the economic illiteracy behind it that should disturb us more. By erecting barriers behind which local businesses may thrive, we grant them access to monopoly profits. In the more optimistic reading of this, these businesses may then use their unearned incomes to build the capacity that they require to eventually take on competitors from other economies.
Meanwhile, for everyday that such monopolies remain in place, they are a tax on locals who have been denied cheaper substitutes. The costs of import-substituting industrial policies are one reason why they are often designed with a sunset clause. Beyond a certain period, they should cease to be coddled by the state, and ready to take on the competition that drives prices down. But even beyond this goal lies the general acknowledgement that for economies like ours, foreign competition brings better management, newer technology, and improved processes.
The big question, which our policy wallahs must seek answers to is not why foreigners would rather repatriate their earnings than build new capacity in Nigeria, it is rather why Nigerians with the means to do so, engage in the same behaviour?
Nearly always, the naira’s fortune ― invariably threatened by open markets in the local folklore ― is rolled out as evidence of our need to “protect” the economy. After all, there is clear evidence that these Nigerian operations of foreign businesses can barely wait to repatriate their earnings ― thus, constantly putting pressure on the naira’s exchange rate.
Once again though, we mistake the symptoms for the disease. Domestic economic entities too, are constantly repatriating their naira earnings ― as summer travel, payment of school fees for their children/ward, shareholding abroad, and the summer houses all over southern Europe. Indeed, after a fashion, the policies we put in place to defend the naira’s exchange rate are like faggot to this flame.
The big question, which our policy wallahs must seek answers to is not why foreigners would rather repatriate their earnings than build new capacity in Nigeria, it is rather why Nigerians with the means to do so, engage in the same behaviour?
Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.
Image credit: New York Times.
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