My2Cents

The Reasons Behind Nigeria’s Economic Troubles

 

As at mid Wednesday night, $1 traded for N328 in the Nigerian black market and at a nail-biting point a couple of weeks ago, a dollar was worth more than N400. For many of us, it simply wasn’t worth our concern…that was until basic day to day goods and services became a little bit more expensive and the income which has always been meagre started to feel that much smaller.

 

The dollar to naira exchange is widely referred to when issues like this come up and the reason is that aside from being a mere black market trade rate, it is an indication of the level at which the naira is valued globally through its comparison with the more stable global currencies such as the euro, pound and of course the US dollar.

It is no longer news that the plummeting of crude oil prices has played a major role in the economy of Nigeria as much as in other countries whose economies are largely built around this so called ‘black gold’. These countries with barely any substantial alternative government revenue have endured trying periods as financial powerhouses such as Saudi Arabia and the United Arab Emirates have decided to flood the markets with crude oil and with that, ensured a rapid decrease in its market price.

Against all the pleas and side-talk, these OPEC members are fully within their rights to dictate market values of oil in such a manner and not suffer the direct economic blows themselves. This is owing to the diversification of their respective economies as they have gone through strict strategic processes to harness their oil riches into investments in other means of national revenue.

Lesser developed countries once more are left to suffer the most, with OPEC members such as Angola, Nigeria and Venezuela feel the burn of regret as they are left with little to account for in the absence of oil revenues.

Nigeria sits at the helm of African economy, but it is unfortunate that our economy is still much dependent on goods and services from outside our borders. This has contributed to recent economic woes in Nigeria and with the recent foreign exchange restrictions put in place by the federal government, Nigeria’s economic prowess takes further battering and Nigerians are faced with increasing inflation.

As much as it is easy, and to an extent correct, to blame the present and past governments for the current declining trade and the mismanagement of oil funds, we should also be blaming ourselves for the wasted opportunities.

Sure, Nigerians can insist that opportunities have not been forthcoming of late or have never been forthcoming at all, yet if every opportunity to become great presented itself so blatantly, everyone would be successful. The greatest achievements come from the smallest opportunities and as the current economic state of the nation can hardly be viewed as a massive opportunity to the populace, it gives us a great chance to delve into enterprises which will enhance our self-reliance.

Evolution arises from the dire need to adapt in order to survive. So if our economy is to survive, it must adapt to exhibit little reliance on the export of these fossil fuels and the mass import of everything else. Other forms of income should be explored, not be the government but by Nigerians themselves.

Ukraine is regarded as a global breadbasket, exporting the highest quantity of grain worldwide, at a point even forming a trade partnership with Russia as the principal producer of imported agricultural goods in Russia, a country over 30 times its size. The success of this is due to the rise in urban and rural farming influencing its economy massively. If we work with patience in Nigeria, such an economic advancement will not be as far-fetched as they are now.

India, once in the same economic category as Nigeria has enjoyed a massive economic growth and is now the 7th largest economy in the world with the 3rd highest purchasing power, and this is largely due to advancement in technology. The Asian powerhouse is a high exporter of software, petrochemicals (NOT petroleum) and pharmaceutical products. This was achieved through the hard work of scientists and technologists.

Even the countries such as the UAE and Saudi Arabia which export little else apart from Petroleum have a well-structured national production scheme which portrays self-reliance. Nigeria however, face a problem of ‘going whichever direction the wind blows’ because our economy is yet to be rooted in our domestic productivity, and this is because there is little or none.

The average Nigerian would rather sell his land than farm on it. Yes, there are many justifiable reasons for such decisions but the fact remains that in a market development, the producer has the upper hand, dictating much of the market flow. Our agriculture shows dwindling progress because, the people leave it to our governments to handle and those in government handle it as poorly as they have always done with many other issues.

In this day and age where a vast majority of Nigerians have access to telephones, computers and internet access, we are yet to dominate the African markets with any form of technological power apart from that of internet scams. Our global recognition in that aspect should if anything, be a telling sign of our technological potentials. For many years, Nigeria had the highest number of 2go subscribers, yet not a single Nigerian gained any form of inspiration from that South African manufactured app to create a globally recognized software of their own.

What our country needs is not government intervention but individual economic pacesetters. Nigeria has been among the top three most profitable countries to open a business in, but unfortunately only foreign companies seized that opportunity and now that foreign exchange laws don’t favor them, they have begun to shut shops and migrate to neighboring countries, carrying with them a large chunk of our economy.

There must be more ‘Made in Nigeria’ goods on the market to choose from and so a market will be born through the availability If our generation seeks to account for a peak in the Nigerian economic landscape, the current twitter trend of ‘BuyNaijaToGrowTheNaira’ should be the tip of a very resilient iceberg to really grow the naira by taking control of our own production and consumption.

With the participation of the Nigerian population, a new market will be formed consisting of a variety of domestic products and services. Only through this will our economy enjoy a healthy resurgence and the Naira be dignified once more.

C.O.

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