Thread by @MA_Iliasu

-Banning the importation of rice was a blunder; it was unnecessary + it increases the price of rice while forcing speculative impact on general inflation.

-Insistence upon self-efficiency in food was far-fetched.

In this thread I'll explain the above two points.

#LongThread:

Mr. Buhari was right from the logic of the pioneer of cameralism, Philiph Willem Van Honick, in his dissection of "Austria Over All, If She Only Will in 1684”. Surely any country looking to develop economically should produce all the commodities it needs for local consumption.

But then he was wrong from the logic of the Scottish economist, Mr. David Ricardo; for it was later realized that any country looking to develop economically should produce only the commodity in which it has a comparative advantage upon other countries.

And though different economic measures apply on different economic situations, the Ricardo's assertion almost bullied Honick's into practical irrelevance. And this, as a student of history and economics, is the basis of my criticism regarding the ban on importation of rice.

According to efficiency data, Rice is not the commodity Nigeria has comparative advantage on. Yam is - in the production of which our country has no close opponent; number 1 in the world in terms of soil fertility alone, without even a shrewd of regard for mechanisation.

However, not prioritising the production of Yam means we're not only failing to capitalize on our domestic and international advantage, but also proving absolute ignorance of opportunity cost, by wasting too much resources on Rice.

Simply if three bags of Yam will cost 5k in Nigeria, 3 bags of rice will cost significantly more than that; approximately more than 15k. Meaning 3x costlier and at the same output capacity. And if 15k was to be invested on Yam, it'll bring 9 bags of Yam rather than the 3 of rice.

And being the global leader in comparative advantage - we can produce more than 80% of global Yam - it means Nigeria will get 60 times more revenue in exportation of Yam (which it has the efficiency to do) than it'll get on the exportation of Rice....

(which it doesn't have the efficiency to do but remains the goal of the administration according to the minister of agriculture).

Not only that, the prospect of creating monopoly in the production of Yam upon global market was there for the taking (It was reported that if it cost 1 Naira to produce a bag of Yam in Nigeria, it'll cost more than 50 Naira to produce a bag in Bangladesh).

While the prospect of breaking into the global Rice industry is almost impossible (because the top 6 countries producing Rice have 23 times greater cost efficiency in that regard than Nigeria.)

Meaning, if it'll cost 1 Naira to produce a bag of rice in Thailand, then it'll cost 23 Naira to produce a bag in Nigeria). Which means even if Thailand will chase 1000% profit from selling rice to Nigeria, it'll still be 1300% cheaper for Nigeria to import rice from Thailand....

than to produce locally. So what'll be the wisest thing to do?

Shift more focus to the exportation of Yam. Which will happen by significantly backing the local Yam producers rather than Rice. While continuing the importation of rice because the revenue to be realised from Yam overshadows the cost of any quantity of Rice Nigerians can consume

China still import rice. United States imports rice. Russia imports Rice. Saudi Arabia imports Rice. Qatar imports Rice. Who the hell, with due respect, is Nigeria to insist upon unrealistic self-efficiency in food? And it's not because those countries desire to import.

Rather because they're better off doing so. Which we should do with our many products like Yam, rather than any self-imposed ego of self-efficiency.

Also the importation of cheaper rice means there won't be inflation on the price of common food (we are all witnesses before the imposition of the policy). Mainly because the absence of increase in the price of Rice means no speculative impact on the price of Maize, Millet, etc.

Currently the hyperinflation in the price of rice is forcing panic. Because like casino with speculation, economy always responds to reaction. Though unlike casino that was built upon speculation, economy isn't built on reaction.....

.....rather gets significantly affected by it. And effect can always be avoided. John Maynard Keynes would agree with me totally.

What our current economic policymakers are doing with local consumption isn't something that hasn't been seen before. In 1930s, United States President, Mr. Herbert Hoover, did the same by banning importation. And it didn't end well.

It was the most disastrous policy American economy suffered in 20th century. Leaving his successor, Mr. Roosevelt, with a messed up work. And just like Buhari with 2 recessions, Mr. Hoover was also having an economy that just came out of the 1st World War.

Yam can be to us what petroleum is to Saudi Arabia. With even the advantage of stable pricing of food. And certainly greater than what Rice is to Thailand. And many other local commodities. Which rice is not inclusive. Refusing to realize that puts our future in jeopardy.

It breed unnecessary hardships upon the poor, while also destabilizing the economy beyond any accurate analysis, prediction, or the intervention of any self-correcting measure.

For now, Mr. Buhari is closer in logic to Herbert Hoover than he's to Franklin D. Roosevelt or Bill Clinton. Just as he's pragmatically closer to the Austrian cameralist than he's to British classical. Bad it's!

Opinions are my own. And I'm very entitled to it. End of thread!