Thread by @DoubleEph

Here’s something that illustrates a depressing reality about economic policy making in Nigeria - some ideas are so pervasive across the Nigerian elite that no matter who you elect, they just won’t change

https://twitter.com/ngrpresident/status/1329694507718291456

Aganga’s auto policy is a perfect example of this. A completely nonsensical policy that was doomed to failure the moment it appeared in his head. Yet he went ahead with it with so much energy and conviction

This idea that if you simply lock up Nigeria, whatever it is that was being imported will magically start being produced in Nigeria. So simple, so seductive, so stupid. That was the auto policy did

Before long the folly of the thing was clear. But what was the reaction? Doubling down. People started manufacturing ‘evidence’ to show it was working. All sorts of claims that car makers are setting up in Nigeria were in the papers daily aguntasolo.co/spot-the-diffe…

Even PwC Nigeria joined in helping the govt manufacture evidence that the policy was working. Yet in reality car importers were removing the tyres and side mirrors of cars before shipping and then ‘assembling’ them in Nigeria to dodge the stupid tariff

By the time APC got into office, it was clear even to a blind person that this policy was a failure. But what did they do? Since one of APC’s core beliefs was that policies didn’t work under PDP because PDP were bad people (and APC are good people), they continued it

The idea of blocking imports to magically induce local production is of course music to APC’s ears. How exactly tariffs would cause someone to set up a plant costing hundreds of millions of $$$ in a market where <100k new cars are sold yearly remains a mystery

We have finally reached the point where terrible policies get rolled back in Nigeria - when they have done so much damage and cost the country so much that there is simply no other option but to rescind them. It has killed whatever car industry Nigeria had. Time for change!

Again, there are many examples of this. Obasanjo as military leader rolled out the local ownership policy. After it did immense damage and allowed South Africa to overtake Nigeria economically, Abacha - Abacha! - was the one who finally rolled it back

Or if you want a more recent example - fuel subsidies. As recently as 2016, if you gave Buhari the choice between his life or letting go of the fuel subsidy (a ‘temporary’ policy that started under IBB), he would have laid down his life. Today fuel subsidy is gone

Buhari finally gave up the fuel subsidy after it had completely destroyed the government’s finances and the govt could NOT pay it anymore. That is, it was the only option available.

But in a country with no memory, don’t be fooled into thinking all these ideas can’t return tomorrow. They die hard in Nigeria. And more disturbingly, the generation waiting in the wings also believe them in worrying numbers.

A country’s economy can never be more than what the majority of people believe. I pray that the next generation will at least be more economically open minded than previous ones.

/end