Rewane, Akeredolu, and the Cannabis Economy [opinion]

LAGOS (Capital Markets in Africa) — According to the Minister of Finance, Nigeria will experience a further economic recession due to the COVID-19 pandemic. It goes without saying that the economy has been adversely affected by the collapse of oil prices and demand coupled with the partial lockdown implemented to curb coronavirus spread. The economic impact of the virus worldwide is expected to far outweigh the medical impact.

For example, in the US, the virus is on course to claim 100,000 lives, while the lockdown has rendered over 30 million people jobless! Curiously, while urging Nigerians to patronize locally made goods to boost the economy, the Minister said Nigeria’s population is too large and beyond what the federal government can handle. This admission is ironic for two reasons.

Firstly, the Federal Executive and National Assembly insist on playing a “big brother” role which was never intended. They maintain an inappropriate revenue allocation formula which gives them a disproportionate share of the budget instead of increasing allocations to state and local tiers of government to take care of responsibilities towards citizens.

Secondly, political office holders don’t lead by example; refusing to reduce either their profligacy or the inordinately exorbitant cost of governance. Top government officials continue to opt for imported luxury vehicles, fixtures, and fittings rather than those made in Nigeria. It is trite that in times of crisis, great leaders don’t’ complain, but rather take decisive steps that have a positive impact. In a situation in which Nigerians are looking up to the government to provide solutions, the Minister’s warning without outlining any creative plan or detailed blueprint for lifting the nation out of the impending economic mess serves little purpose.

Nevertheless, there are voices proposing solutions. Bismark Rewane, a member of the Presidential Economic Advisory Team, is one of the premier economic and financial experts in the nation. In the absence of publicised detailed economic recovery plans, he has openly supported calls for legalisation of cannabis for medical purposes as a means of boosting economic revival. He isn’t alone. Ondo State Governor, Rotimi Akeredolu, claims that the strain of marijuana grown in his state is the best anywhere in the world as confirmed by so-called “Canadian experts”! Supporters of cannabis legalisation claim Nigeria can corner 20% of the world market and earn $14 billion annually.

They correctly point out that all previous prohibitions whether it be alcohol, prostitution, hard drugs, or loan-sharking only led to the rise of billionaire barons from whom the government reaped no income. Given that desperate situations call for desperate measures, a growing number of countries throughout the world are legalising cannabis and encouraging the industry as a means of poverty alleviation and exit from economic recession. Seven African nations (South Africa, Zimbabwe, Zambia, Malawi and Ghana) have joined in legalising cannabis production for medical and industrial use.

Last month Lebanon became the first Arab country to follow suit. Previously, its growth, sale and consumption were banned, but their Minister of Economy championed legalisation, arguing that marijuana exports could generate $1 Billion in annual revenue. To allay fears, he made reference to research results indicating that cannabis consumption in countries where it is legal, is not higher than in countries where it is illegal. Although marijuana is illegal and taboo in Nigeria, the nation is reported to have the highest cannabis usage in the world and the domestic market from which government derives nothing is estimated at billions of dollars per year! In addition to medical uses, there is also widespread recreational usage amongst the millennial generation word-wide.

The global cannabis market is expected to reach $100 Billion by 2026! As oil dependant economies decline, Nigeria stands at a pivotal point. Policymakers and legislators have the opportunity to establish laws under which cannabis can provide economic salvation. As it stands, criminalisation of cannabis forecloses a rare opportunity for poor rural farmers to catapult themselves out of poverty. A cannabis legalisation policy tied to an industrial policy will indicate a maturing of public policy in Nigeria to reflect both the diverse interests of its citizens and an ability for popular ideas to overcome the personal prejudices of those in authority.

All it requires is a system that can control and manage production, transportation, sales and taxation. It is critical that if there is to be any cannabis policy, its legislative design and implementation must provide opportunities for poor farmers to enter and successfully prosper in the cannabis industry. The idea of a licensing system as opposed to open competition appears attractive, but would likely create a situation which would benefit corrupt government officials. Any cannabis legalisation must leave no room for ambiguity in interpretation, and there should be minimal institutional barriers to participation in the industry.

There is much logic in the proposition that if the government truly desires citizens to return to the land and invest or participate in agriculture, then farmers should be allowed to switch production from low-value crops to profitable crops such as marijuana. Fears that food production will be affected are unfounded. The economic benefits of legalising the crop are undeniable as it would increase both non-oil foreign exchange revenue and internal tax revenue. In 2019, the US State of Colorado collected more than $302 million (over N150 Billion) in taxes from medical and recreational marijuana.

Other economic benefits include an increase in jobs from setting up marijuana nurseries and dispensaries, and opportunities for money to be moved out of the moribund banking system into profitable employment creating investments. Socio-economists maintain that legalising cannabis will not lead to a sudden rise in consumption and that repressive cannabis laws are expensive to enforce and have not had a discernible impact on consumption.

Despite the undeniable economic advantages of cannabis legalisation, the support of eminent economic experts, and the viability of a cannabis industry, few Nigerians expect any innovative ground-breaking economic policies from an executive and legislature stacked with geriatrics. The cannabis industry as a solution to Nigeria’s economic woes depends on whether or not political leaders can willingly overcome their personal prejudices.

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