International Trade and Nigeria's Recession

Nigeria is deeply in a recession and the Muhammadu Buhari led government has been seeking ways to get the country out of it. In the mouths of many, we hear more than anything else, diversification away from oil and patronising made in Nigeria goods as led by Ben Murray-Bruce. They are both surefire ways to achieving results but details, a plan and some action has been lacking but the Calabar International Trade Fair has some plan.

I make bold to say that one of the best and surest ways to get any country out of a recession is through trade (esp. international trade/regional trade).

Recession by economists is a time when their books show two negative growth rates in GDP and GDP in its simplest definition is the value of goods and services in a country which can be calculated by summing up income or spending. During a recession there is a general decline in production which affects output and availability and in turn deals a blow to the bottom line of corporations. When the bottom line is hit, companies have no choice than to lay off staff as part of their cost cutting measures which in turn reduces income and creates instability. Reduced output creates scarcity and shores up prices of goods and services making them unattractive for export and currency gets hit. This explains our current situation in Nigeria but governments around the world have taken advantage of the situation to make their economies bounce back even stronger. And yes, there is good in recession. Follow through.

In a recession, progressive governments should be seeking to renew and improve production levels, strengthen their forex liquidity and to boost back the value of their currencies. All of which could be achieved through foreign investments (bringing in more dollars than sending out - exports > imports) - notice I avoided 'DIRECT'. This is because, no sane investor is looking to dive (invest) in waters with high tide (rough economy). Keep in mind that during a recession you want to sell more than you buy as that is the only way to shore up forex, reduce its scarcity, raise value of your currency and narrow trade deficits. (See closing paragraph for why you need to still import).

In a recession, currency almost always loses its value and what this does is it begins to create a process in reverse of itself. Suddenly goods and services that have been avoided by the international markets due to high prices, triggered by high production costs, begin to become valuable again but this time due to your weak currency. They believe that since your currency is weaker, they have room to buy even more from you.

See a connection already? No? Okay here. Since the international community won't give you dollars in form of investments, get them to give you their dollars by selling to them more than ever before during your recession (remember what the Obama admin did with their auto industry for instance? Improving designs and performance to export more). It is that simple.

Recessions create an illusion. The exact same things it hurts are the things that can expel it. Government should therefore find ways to boost/increase production for export, by investing (pumping monies) in select/critical industries, giving tax breaks/cuts to big players and new entrants and not by selling assets or banning/restricting just any import they can think of. Placing careless restrictions on certain imports can actually be counterproductive for 2 reasons - retaliatory efforts by governments and their allies from where those goods come from which can hurt bilateral/regional trade and secondly create even more hardship and further raise inflation especially if local production of the same goods/services cannot meet demand.

I'd hail the Central Bank of Nigeria, for floating the Naira in June, although the move came late, its still something. NBS stats show that our trade deficit has narrowed - improved exports, although imports remain high and, most important to Nigerians, currency value gains.

Currency value gains for an economy that imports heavily could mean increased imports. Economics is hard but it remains the duty of government to create balance. Government just needs to make sure Exports > Imports during Big 'R' as I stated earlier.

Yes, someone has been thinking!!! The Calabar International Trade Fair company has been working round the clock to catalyse trade by executing a bigger than life Trade Event that can boost export but who understands what this means?

I was at a gathering where people criticised Ben Murray-Bruce's #BuyNaijaToGrowTheNaira campaign but I'm sure many don't get the idea. Your neighbour will only eat from a pot you've taken from. How can we boost export when we cannot show the international community that we like what we make and we make enough for us to consume and share some of it.

Calabar International Trade Fair then comes forward to say, we want to take all of that production and force the world to buy in an event that cannot just be overlooked. At 10k vendors, Calabar International Trade Fair will be the biggest single phase trade fair in the world. Thats spotlight on Africa. The world will be forced to look. The Trade Fair will draw 2000 vendors from Nigeria and 3000 from the rest of Africa.

But remember, as I said earlier, you must balance trade at all times - recession or not, and we must develop local content through synergy so 5000 slots will go to the rest of the world so that Africa can bridge technology gaps and trade business strategies and that is why I have, alongside my team, extended hands of friendship to people like Sam Hart ( the Made in Aba man) so that we can intentionally do magic with Aba.

I'd let Calabar International Trade Fair take it from here throughout the week to tell of our exciting partnerships thus far.

I congratulate the Government and people of Cross River State and the Management at Tinapa. My most profound appreciation to the Commissioner for Finance and MD Tinapa, Mr. Asuquo Ekpenyong.

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