President of policy think tank, Franklin Cudjoe, has cautioned government to avoid towing the steps of Nigeria after the latter shut down its borders to neighbouring countries.
Franklin Cudjoe is against the view that Ghana and other countries must do same, noting that “lessons must be learnt from the mistakes of others who took that path.”
According to him, some countries have tried it and the decision backfired following a series of inflation and lack of innovation.
“In the 1950s and 1960s, governments of many countries in Africa and Latin America erected trade barriers. The plan was to enable the industries of their countries to grow, "protected" from outside competition. What actually happened was the opposite.
“Although the industries in these "protected" countries grew for a short period, the lack of competition meant that their industries became inefficient and fell behind the rest of the world. Also, because imports were very expensive or even unavailable, their costs of production rose as they were stuck using old technologies.”
He added that in a short while these "protected industries were producing goods that few people wanted, exports fell and, in many cases, the industries – usually run by friends of the president – had to be subsidised by the state in order to keep them afloat.”
Although many have speculated that Nigeria will progress massively after steps to close its borders, Franklin Cudjoe downplayed the move stating that the action by the Nigerian government will only lead to a short-lived progress.
“Nigeria may well find out that the very insecurity she claims it wants to reduce by the obstinate border shut down, may well be the conduit for more uprising.” He stated in a post on social media.
Nigeria, in August slapped a ban on the free movement of goods from countries with which it shares land borders with. The country banned all trade activities, import and export, from Benin, Niger, and Cameroon.
Authorities in Nigeria say the primary objective is to curb the smuggling of goods such as rice, tomatoes and poultry to bolster Nigeria’s agricultural sector.
But the move has impacted negatively, especially on informal traders, with most goods perishing away.
To this effect, Franklin Cudjoe wrote on his Facebook page, “The lesson we should learn from this is that governments should not try to create national champions by "protecting" them from competition or by subsidising them. There are reports of food inflation in Nigeria.”
Franklin Cudjoe, President of IMANI Africa