Could the governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi, feel at home among the proponents of muscular ‘developmental-statism’ in Africa?
Analysts imagine he would be at ease at a dinner table alongside Rwanda’s President Paul Kagame and Ethiopia’s Prime Minister Meles Zenawi. The conversation would buzz with tales of bank executive manhunts and the benefits of exercising discipline.
Sanusi’s cerebral unpicking of the dangers of blindly following western liberal economic advice would also ring true to his dinner comrades. Premier Meles has called Bretton Woods mantras “bedtime stories”, while Kagame has often rapped on how Africa “needs no lessons from the west”.
Speaking to a packed house as part of the compelling London-based Eirenicon Africa Public Lecture Series in late March, Sanusi articulated two main points.
The first dismissed hypocritical policy proscriptions from the ‘Do as I say, not as I do’ crowd. In particular, he flagged up the subsidies to US cotton farmers, which, at around $2bn per year, are equivalent to Mali’s entire national budget.
He also lambasted pious European hand-wringers whose subsidies per cow exceed per capita income in Mali.
The recent political consequences of poverty in northern Mali, exacerbated by low cotton prices, were not missed by Sanusi, who is angry that northern Nigeria’s textile factories have been allowed to fall into ruin.
In his second point, he asked whether Germany’s Mittelstand industrial fabric would be so rich without infant-industry protection.
Developing new industries in Africa does not have to mean returning to picking winners, he argued: “You have to be smart about protectionism. You don’t need to put a 100% tariff”.
Instead, governments could spend the money on improving the business climate, electricity provision and roads.
His own developmental state efforts in Nigeria are in the agricultural sector.
Sanusi points to the N350bn ($2.1bn) rice import bill Nigeria faces each year and explained how the government is now facilitating the import of 100 rice mills that will help reduce the need for 70% of imports.
“The reason our banks don’t receive decent proposals to fund in the agriculture sector is because of the lack of, for example, cold storage. So you have to fix the whole value chain”, said Sanusi.