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Mass poverty looms except… —Experts

By Jimoh Ahmed, Babatunde Ayodoju, Samuel Edu
Babatunde Aderoboye, Kayode Afolabi & Elisha Arafin

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Nigeria economy will be more vulnerable to hyper inflation, high unemployment, higher exchange rate with mass poverty unless there is renewed effort to encourage local production.

This is the submission of economic experts in separate interviews with The Hope.

They hinged their submission on the point that Nigeria has largely become an import dependent country and has deeply been prone to inflation.

In the recent times, the country has been experiencing unbridled hyperinflation, with rising prices of commodities and services as a result of energy crisis and rising exchange rate of the dollar among others.

This has led to many manufacturing companies  relocating to neighbouring countries or folding up in Nigeria.

Findings showed that many manufacturing companies have exited the country over costs of energy and importation of raw materials due to what they called dollarised economy which rendered the Naira useless.

They said any country that only consumes without producing is heading towards economic doom.

The experts who spoke with The Hope include: Prof. Olayemi Simon-Oke of the Department of Economics, Federal University of Agriculture, Akure, Prof. Mary Fasoranti of Department of Economics, Adekunle Ajasin University, Akungba, Dr. Razak Santos of Adekunle Ajasin University.

Others are: Economic Expert, Dr. Edamisan Ikuemonisan, researcher at the Obafemi Awolowo University, Ile Ife, Elijah Oluwagbote, Economic Expert, Dr. Chris Ofonyelu among others.

Oke attributed drastic fall in the Naira value, rising inflation and the dollarisation of the nation’s economy as major challenges confronting the economy, saying that the nation economy was not as terrible as in 70s and 80s.

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“The indices that influences rise in dollar and fall in Naira was obvious, take a look at what the situation was in the 70s and 80s, during these periods, the economy was well managed compared with the present situation. People have lost respect for Nigeria’s currency, compared to the days when the exchange rate from dollar to Naira was equal.

“Secondly, Nigeria industries are in comatose and moribund.  Once you import in foreign currency, it will have adverse effect. The way Naira is presently being handled by the elite in Nigeria, Naira and Dollar can never be equal.

“Another indices to be considered is the level of foreign investment compared with investments in Nigeria. Most of the political office holders in Nigeria have multi-million dollar investments abroad and this is to the detriment of Nigeria’s economy.

“The only solution to inflation is to put a drastic reduction to importation and encourage local production.

Also speaking on the persistent rise in Dollar and fall in Naira value, a Professor of Economics  in Adekunle Ajasin University, Akungba Akoko, Prof Mary Fasoranti attributed the continual fall to incessant importation into the country.

“One sure way of US Dollars supply is to earn it from productive activities of the nation. We must produce goods and/or services that the rest of the world is willing to pay for in US Dollars. Nigeria earns US dollars from oil and non-oil export. Unfortunately, supply of dollar has fallen drastically in the last 10 years as a result of either fall in international oil price or fall in crude oil production level in Nigeria.

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“Since oil export is a major source of foreign exchange earning in Nigeria, any negative distortions in price or/and quantity of oil have a grave consequences for supply of US dollars. More so, FDI inflow that is another veritable source of US dollar to Nigeria is low in the last four years compare to 2010- 2017 average.”

Dr Rasaq Santos said “the rising inflation in Nigeria is attributed to a combination of factors such as; high cost of energy , supply chain disruptions associated with sanctions against Russia, exchange rate pressure among others.

He said the only panacea for checkmating inflation is the enforcement of policies that will encourage local production and discourage importation, stressing that importation of goods has done more harm than good to the nation’s economy.

In his own opinion, an expert in the agricultural sector and researcher at the Obafemi Awolowo University, Ile Ife, Elijah Oluwagbotemi said the country is indeed going through a difficult time which has greatly affected farmers.

“Take for instance, the price of a day old chicken has increased from N180 to N500, due to this, it becomes more difficult for buyers to patronize farmers and farming is becoming more difficult as most farmers now depend on loan to keep producing, we can only hope that things get better.”

Dr Ikuemonisan Edamisan said insecurity also play a serious role in the inflation rate of the country, adding that the agricultural producers were gripped with fear of being killed.

“Insecurity has stopped people from farming, the fear to go farming. like where I have my farm, we have over 100 people cultivating Tomato but most of them could not come back because of insecurity”.

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Dr. Edamisan recommended that, to checkmate the spiral rate of the inflation, the government should tackle the structural and foundational problem of the economy system, adding that, the inflation trade had not been managed properly.

Also, an Economic Expert, Dr. Chris Ofonyelu said the high price of oil and gas, most especially diesel led to the closure of some companies, even some radio and Television stations.

Companies or organization that depend on diesel will have to shutdown for some times, for example, some radio stations shutdown currently, most of them don’t work 24hrs again and this will continue until probably there’s stability, and probably price begins to go down.

Dr, Chris suggested that production of more goods would help reduce the imported component of the inflation, adding that government should find its support to promote and make production materials accessible.

He recommended that government should on the value of Nigeria currency.

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