Thursday, July 5, 2018

The Wars Fighting Back.

Trade wars are mostly made up of fightbacks. It is what everyone knows and so it is a surprise that President Trump is querying the decision of the motorbike manufacturer, Harley Davidson, to move some production abroad. It is only fair that the EU should effect retaliatory tariffs in response to the ones imposed by the US government on steel and aluminum products from Europe and elsewhere and in trade wars, it is usual to counter where it hurts most. It is unfortunate that Harley Davidson should be a victim of the reprisals but this is the age of globalization and outsourcing and it is inevitable it should switch to plants outside the US where lower wages and general costs will help to offset some of the slide in turnover expected from prices of its bikes going up in the EU, an important market. This is a common economic move that is vital in order to survive: at least in the long run. Trump cannot complain. He fired the first shot.
A sensible move as opposed to Trump's rationale of 'safeguarding national security', a bye-slang for old, turgid protectionism. How much of the steel and aluminum consumption in the US goes into national security? Are US metal plants at par with Chinese variants in efficiency? Isn' t it more profitable to concentrate energy on reforming labour and wages? Someone said Trump has to fulfil his promises to American workers, a sizable component of his political base. Such political promises often turn out to be rash. Too bad economics does not often work well with promises.
And on another front, the president's peremptory annulment of the Iran deal is having a bit of boomerang now. Ramping up sanctions would ultimately lead to cuts in Iranian oil production and that was going to push up oil prices, resulting in higher energy costs in the US. Unless production is increased quickly elsewhere to bridge supply gaps. Oil prices inching towards $80pb is a mayhem the delicate economy can gladly do without and so worrying is the scenario that the president had to resort to some fake tweeting: announcing that Saudi Arabia has promised to ramp up production. News that turned out to be false.

Monday, July 2, 2018

Why Herdsmen-Farmers Clashes Won't End.

Herdsmen-farmers clashes are common all over Africa. Grazing routes inevitably pass through farmlands and there and then there is little the herdsman himself can do to restrain famished animals from lunging into a bite and crops are the usual victims. Droughts and unexpected weather patterns occasioned by global warming have helped to exacerbate the problem of late and for many herdsmen and farmers, the crisis could approach a struggle for life itself. But the problem is especially intractable in Nigeria because of an entirely different reason. Many of the cows, sheep and goats being herded do not belong to the herdsmen themselves. Estimates reveal that a herdsman do not really need more than 20 head of cattle for the upkeep of his family. Wealthy ones among them barely own more than 60 and if you see 300 cows with a herdsman or two, be rest assured he doesn't own more than 25% of the herd. At most. The brutal truth is that cow-rearing is big business in Nigeria. A fair-sized cow costs an average 100,000 naira and just having 10 is big money, at least by Nigerian standards. Hence there is a frenzy to own cows and since it is only the herdsmen that have the expertise of rearing, it makes sense to acquire the animals and keep them with them, eventual proceeds being shared according to a prearranged formula. This business cuts across all strata of the society: the poor who own one or two to the rich who own them in hundreds; Christians or Muslims; military, paramilitary or civillian. A discreet investigation carried out by this forum reveals that during festive periods or seasons where cattle sales are high, it is common to see wealthy individuals in jeeps sneaking under the cover of dusk into herdsmen temporary huts to collect fat wads of notes, being their own share of the sales. In central Nigeria where the crisis rages fiercest, at least 40% of the cattle being reared by herdsmen belong to soldiers, naval officers, air force men and policemen, retired or serving. These are men that will go to any length to protect their investment. They do not think twice before they supply weapons to Fulani militias or militias dressed as Fulani herdsmen, arms which these untrained handlers are liable to use indiscriminately. The central states of Benue, Kogi, Nasarawa, Plateau and Taraba have huge military bases and a huge reservoir of serving and retired military personnel and it is a wonder the clashes should persist there. Major mayhem usually breaks out when there is large-scale cattle rustling. All hell is let loose in order to recoup or revenge losses. The recent massacre in the central Plateau State has as part narrative, the rustling of 8 head of cattle belonging to the Archbishop of Jos. It is easy to see why the government is helpless in curtailing the crisis. Those who are to handle the crisis, arrest and disarm the culprits, have the least inclination to do so because the cows at the centre of the problem actually belong to them. And it is difficult blaming them. For some, their cattle investment is all they have in these hard times.