Inflationary Pressure from High Tariff (III)

By

Sampson I Onwuka

Last Tuesday 7th of July, Deputy Chairman of Nigerian Commerce Ministry, Mr. Ibukun Akindudu with the Support of Senator Jabric Markins –Kuye, publicly expressed his wishes for the return of Michelin and Dunlop to Nigeria. It was a tire business which will naturally require a form of high Tariff protection in order to allow these companies to make it to Nigeria following their successful talks with Akindudu. But is the choice of the public served here, for if the public is not served then self interest is the drive in. By the very office, the public is not protected and the inflation is not managed at all.

But this is a bad economic idea whatever the reasons are. For a rising period of importation of tires from has increased in worth and in natural condition, the industry has now attracted the greedy nose and eyes of French companies. In many ways, a member of Nigerian ministry cannot make so public a statement had efforts not been made to lure the commercial Actors towards an informal alignment with Michelin and Dunlop. Of course the foreign companies have no interest for long term investment and if they did, they wanted local currency for such support. The only way to control so vast a Nigerian market was naturally through High Tariffs, tariffs so high. With high Tariff structure, there will redemption through sales and then there will be inflationary pressure from need to profit and cost, then the domino effect.

But if John Maynard Keyes opens ‘The General Theory’ with opposition to Say’s Law that “supply creates its own demand” is does not at anytime mean that he was talking from market perspective which was Says. In market reality, supply does create its own market and for that, penetration of goods and availability of market can make a difference in terms of public trust. But on the upside view Keynes made that it was demand that created supply, hence attention on production, we see the inverse relationship between political economics and market economy. One key in the argument is that one side of the case involves the spending government and the other side involves the sales district, markets actually. Surely we wouldn’t need James Buchanan idea of public choice which inveighed and remained critical of Keynes, in which he suggested that public choice is vulnerable to market condition. This is easily achieved through High Tariffs which is anti competitive and which can be of some benefit to the country and no.