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NIGERIA: ECONOMIC SHACKLES OVER CASSAVA

Economic restrictions over one man’s cassava obsession


A careful look at the topic and you’d see a contradiction but then it is not a contraction but the reality of Nigeria’s seeming democracy. Democratic dictator best describes Nigeria’s president Jonathan. There are a lot of reasons to describe him as such but I’d rather focus on his latest dictatorial antics. The president has just discovered cassava bread! That in itself is not bad considering people like Steve Jobs and Bill Gates had to help either discover new things or make old ones better. Unlike Steve and Bill though, President Jonathan has put policies in place to help ensure Nigerians join him in the quest to feed on cassava bread for as long as he remains the president.

Hear the president in his budget proposal presentation,

“Government is also introducing policies to encourage the substitution of high quality cassava flour for wheat flour in bread-baking. Bakeries will have 18 months in which to make the transition, and will enjoy a corporate tax incentive of 12% rebate if they attain 40% blending. With effect from March 31st 2012, importation of cassava flour will be prohibited so as to further support this programme”

In case you do not understand the above clearly, the president goes further to break it down for complete understanding,

“From July 1st 2012, wheat flour will attract a levy of 65% to bring the effective duty to 100%, while wheat grain will attract a 15% levy which will bring the effective duty to 2010%…In addition, to encourage domestic rice production, a levy of 40% will be placed on imported polished rice leading to an effective duty rate of 50%. Effective 31st December, 2012, all rice millers should move towards domestic production and milling of rice, as the levy of 50% will be further raised to 100%.”

Reading through the above, you would think the president was reading from the indigenisation budgets of the 70s but those are actually what will play down from next year. In essence, Nigerians are in for scarcity of food and indeed everything that needs wheat flour and grain for their use. The farmers this year had a bad production year as the rains were delayed. This in essence will translate to a form of scarcity for agricultural produce. What the president is basically doing is taking away the supplements that’d have helped the fill the gap but he has in his usual doing before thinking method actually set the nation up to a year of hunger in 2012.

While the president’s intention was to essentially cut out the importation of wheat and wheat flour so as to encourage the production of bread using cassava flour, he has simply forgotten that wheat is not exclusive to bread alone. A ban in the importation of wheat has far more reaching implications in the production of biscuits, cookies, cakes, breakfast cereal, pasta, noodles, couscous and for fermentation to make beer, and other alcoholic beverages not to talk of biofuel as that is very much alien to a country still very much in a frenzy over the discovery of the latest food to hit the world, cassava bread.

In essence, for the sake of cassava bread which does not have enough production of cassava this year to meet the needed volume to produce the popular cassava grains locally called garri, a competition is set to emerge between garri and cassava bread for the grossly limited cassava flour next year. While these two compete for who would use the cassava, other production processes that depend on wheat flour and wheat grain will suffer.

Year after year Nigerian governments miss it. They liberalise one sector of the economy after taking decades through the wilderness of state control. The stiffening of importation on rice and cassava bread will have other effects. Smuggling will be the order of the day. All of these bans on rice and wheat will only open up illicit trading across the border. Do we really want that? Why do Nigerian leaders thnk that to grow a local industry you must before had shield them from competition. Why would a right thinking president ban produce for which the supplements have not even been produced or looked to be produced enough to meet national demand? The price of garri has been rising over the years because of the increasing short fall of cassava production. With competition for cassava between garri, cassava and indeed all the other products for which wheat have been banned but some other poorly produced flour can be used, 2012 is the year not just of scarcity of food but also of making do with cassava biscuits, cassava beer and indeed cassava brains because considering our propensity to consume these things cassava will eventually find itself growing in our heads

Last year, the president banned all the country’s football teams from international competitions. He rescinded the decision within days due to a threat by FIFA the international governing body of football to add to the years the president had chosen the country to be out for. Well, the country did not withdraw from international football but somehow all the country’s national teams have failed to qualify for any international football competitions holding next year. This is the first time in modern memory the national teams of Nigeria will be home eating cassava bread while their counter parts from other parts of the world will be competing. The initial ban had made a psychological dent in the mental state of the nation’s football teams. If that was a rash and puerile action by the president, watch out in 2012 when the Nigerian people enjoy the president’s ban on one of the most important raw materials in the production of staple foods.

After all said and done though, cronies of the president having enjoyed secret waivers this year may just enjoy same again to make wheat flour and wheat when available the most expensive in the world. That was how Nigeria’s cement achieved same status. Not to worry, enjoy your meals while you can because a time comes when all you will have are empty stalls and dry pots.

Policy solution:
Don’t ban the importation of wheat. If cassava bread is really the messiah of bread, look to encourage its availability in the markets and allow the people decide based on choice what bread they prefer. You stop one thinking another will take its place. Competition is what grows people, it is what grows industries and indeed nations. What you don’t do is reduce people to just one choice: to eat or not to eat cassava bread. Time will tell.

President Goodluck Jonathan

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Omojuwa

In the beginning...Let there be Light http://en.wikipedia.org/wiki/Japheth_J._Omojuwa

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