“We must always take heed that we buy no more from strangers than we sell them, for so should we impoverish ourselves and enrich them.”— Queen Elizabeth I (reigned 1558–1603), cited in Braudel, Fernand (1979: pg 74), “The Wheels of Commerce”, Civilization and Capitalism 15th–18th Century”.

About a month or so ago, I engaged in a discussion with a few friends on social media on the need to support President Buhari and his government on re-directing Nigeria’s economy.

My point was premised on two key issues – Mercantilism and Import Substitution Industrialization (ISI) Economy. I have since realized that making my expatiated submission public has more value than limiting its reach to the intended reader alone.

There are no other ways to understand the reason for Africa’s dependence on importation and the underlying reasons behind why there is urgent need for a re-direction than the words of Queen Elizabeth I of Great Britain, as cited by Braudel in his “The Wheels of Commerce”, Civilization and Capitalism 15th–18th Century”.

The Queen was quoted as saying in the British Parliament that “We must always take heed that we buy no more from strangers than we sell them, for so should we impoverish ourselves and enrich them.”

The kernel of what the Queen said is simple and straight forward, by buying overseas, we enrich those oversea traders and impoverish ourselves. Hence, all policies and projects, rules and regulations put in place to achieve this overall goal of enriching ‘ourselves’ at the expense of ‘others’ is what mercantile economy and its successor, ISI is all about.

By definition–or to be more pragmatic in my description–mercantilism is an economic policy that aims at maximizing profits through exportation of products at the expense of importation. In other words, it is an economic policy that focuses on increasing exportation of FINISHED GOODS and decreases importation of FINISHED GOODS from other countries.

You will find at the heart of monarchy and aristocracy, militarism and colonialism nothing other than the attainment of this great objective – making others poor to enrich yourself. Tell me who would repudiate this simple egoistic economic principle, that every serious minded nation has put to the test and gained from, but those who want to live in perpetuity serving others and lamenting their woes.

During the first phase of European colonial rule, Europeans took umbrellas, glass, velvet, guns, and gunpowder to Africa, exchanged theses humans i.e. able-bodied young men and women, and took them on a perilous journey across the Atlantic Ocean to the Americas. The Americas, also called the New World, described North and South Americas and the various islands in between them. Europeans used these enslaved Africans on European fields, plantations, and mines. The proceeds of their sweat and the resources of the land were shipped across the Atlantic Ocean for the development of Europe. During this time, the Queen and other lords in Europe came up with the Mercantile Economic System (henceforth MES) as an economic policy that allowed them to ship European finished goods from Europe to Africa and the Americas and in turn, exported from Africa and the Americas raw materials that were converted into finished goods in the different European industries. Under MES, no industry was to be built in either Africa or the New World.

To keep the system going, tariffs and subsidies were imposed on traded goods. While MES was the dominant philosophy of governments across Europe, the entire might of each government was activated to support (national) traders and others whose activities were considered as ancillaries to trade. These ancillaries to trade included the CHURCH, the colonial police, hospitals, schools, etc.

Underlying MES was the need to reach a positive balance of trade, especially of finished goods. In other words, the need to ensure or reach a current account surplus by preventing a current account deficit drove MES. So, traders, miners and plantation owners were merely fronts for their nations. Whatever gains they accrued were reverted back to the national government through taxes and levies. It was only in this way that nations (through their traders and merchants) could accumulate monetary reserves. The need to outdo each other had pitched different European powers against one another at different times. Historically, France-Britain’s one-hundred-year war, 30-year war, etc. are good illustrative examples. In fact, European colonial rule of the Americas, Africa, and Asia was driven by MES.

WHILE MES LASTED, AFRICA, LATIN AMERICA, ETC. WERE MERELY PRODUCERS OF LABOR AND RAW MATERIALS AS WELL AS CONSUMERS OF EURO-AMERICAN FINISHED GOODS.

Permit me to illustrate with one example to bring out the most important points underlying MES. Brazil, Ghana, Nigeria and Ivory Coast are the four major producers of cocoa globally. Cocoa seeds are grown, dried, and bagged in these 4 countries. The conversion of cocoa seeds into beverages is only done in EUROPE and AMERICA. There is not a SINGLE CHOCOLATE FACTORY ANYWHERE in these 4 countries.

Let us do the mathematics. If it took 100 farmers to produce 10 billion tons of cocoa annually, how many workers are in the different cocoa-processing factories across Europe and the United States? They cannot be less than 1 million people. So, Brazil, Ghana, Nigeria and Ivory Coast gained 100 farmers (occupations) while Europe and America gained 1 million workers in the value chain of cocoa processing.

What about other ancillaries to trade, things or jobs like packaging, designing of Bournvita can, chocolate wrappers, printers who printed on those packages, ink-makers, papermakers, etc.? What about shipping, warehousing, insurance, advertisement, etc.? Let us assume that all those produced about 5 million more jobs. So, for the labor of 100 from Brazil, Ghana, Nigeria and Ivory Coast, Europe and America gained 6 million jobs.

The above, in purely economic terms, is called value addition.

It is for the above reasons that MES ensured that no industry was built anywhere in Brazil, Ghana, Nigeria and Ivory Coast to turn (add value to) cocoa into chocolate.

By the middle of the 17th and the early 18th Century, MES lost color and was replaced by ISI. Import substitution industrialization can be described effectively as an effort by developing nations to break away from the yokes of MES. Sadly, as you will see in the foregoing, it is, in itself, a shackle. ISI is an economic theory that aims at decreasing their dependence on developed countries through trade protection and imposition of tariffs on IMPORTATION as a way to grow newly formed domestic industries. It aims at preventing competition, especially foreign competition. For more clarity, ISI aims at replacing IMPORTATION with LOCAL PRODUCTION by closing borders to foreign IMPORTS, by imposing high tariffs on FOREIGN IMPORTS, and creating enabling environment through INCENTIVES for local production.

ISI was the dominant ideology of the 1980s and 1990s and it drove many governments, starting from Shehu Shagari to Obasanjo.

To ensure that ISI failed, Europe and America not only increased astronomically the cost of IMPORTATION into their countries, but also ensured that their own producers were adequately incentivized.

How did they do it? This is very simple and easy to see.

Since 1945, the world entered into the era of supranational organizations. It began with the establishment of the General Agreement on Tariffs and Trade (GATT), which 23 countries signed into law on October 30, 1947. GATT was a legal agreement that minimized barriers to international trade through the elimination or reduction of quotas, tariffs, and subsidies.

On paper, GATT aimed at eliminating barriers to trade through removals of tariffs and subsidies but the main promoter, the United States continues to pay subsidies to American farmers every day. I mean, for every animal on American farmers field, for every crop planted, the farmers got incentives. Why? So that no products from other nation could compete with products of American farms. The alternative to this was to sell for less.

In practice, GATT aimed at boosting America and its allies’ economic recovery after World War II through reconstructing their comatose economies and liberalizing global trade in their favor. GATT gave birth to the World Trade Organization in much the same way that the League of Nations gave way to the United Nations Organization. The primary aim remains – reduce tariffs globally and remove tariff barriers to trade so that beneficiaries of MES can continue to milk the poorest of the poor. Africans, Asians, and Latin Americans have since dumped ISI.

To permanently seal the coffin, the United States created two other institutions – the Breton Wood Institutions of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (popularly known as the World Bank). They were established to do one thing and one thing alone: to help rebuild the shattered postwar economy of the United States and its allies in Europe by promoting international economic cooperation with other nations. Through IMF and World Bank, terrible economic policies were developed that aimed primarily at opening up others’ economies to service US and its European allies’ economies.

While the US government owns IMF and World Bank, France owns the Paris Club, Britain owns London Club and hundreds of other international finance corporations which, in the name of supporting mutual development, imposed different economic models and policies, backed by their various militaries and other subterfuges such as the USAID, UK Office of International Development, etc., on developing nations. As it was during the days of MES, so it is today and, God forbid, forever more.

So, when a Buhari stopped importation of food items such as RICE, he was only following in the footsteps of how Europe and America gained world domination in finance, military might, and politics. I think anyone who wants Nigeria to grow should support Buhari in changing the direction of our economy. Until we realize and follow the injunctions of Queen Elizabeth that we can only be rich if we reduce what we buy from others and increase what we sell to them, we will not grow.