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Tuesday, October 19, 2021

Nigeria’s Dependent Economy

NIGERIA has been struggling both politically and economically with exacerbating consequences on the lives of citizens as an average Nigerian finds it extremely difficult to meet daily basic needs. The situation is compounded by global recession occasioned by Covid-19 pandemic which has taken the world by storm two years on. As a matter of fact, Nigeria’s economy has been lying prostrate before Covid-19 because the country’s economic programmes and policies are dependent on the dictates of other countries. Regrettably, we consume what we do not produce and produce what is not demanded (exportable) by other countries.
OIL and agricultural products are our major exports and our policy in these sectors is tilted towards producing raw materials which we sell to foreigners at ridiculous prices and in turn buy the finished products at exorbitant prices. For instance, international market forces control the price of crude and our earnings from this fluctuate as a result of this. To make matters worse, the petroleum products we consume locally is largely imported as we cannot process our crude into finished products due to our ailing refineries and this puts a strain on our currency.
AS it stands, our government depends on external income in the form of reckless borrowing to fund its budgets leading to huge debts hanging on our necks. The Debt Management Office’s release showed that as at June 30, 2021, the debt stock of the Federal Government of Nigeria, 36 states and the Federal Capital Territory stood at N35.5 trillion. Unfortunately, the funds from these borrowings are spent on consumption rather than production and investment which can yield returns to enable the payment of the debts and their interests come with ease. Worse still, Nigeria has no deliberate policy to grow the economy because her policies are influenced by her creditors who consider their economic interests above Nigeria’s.
WE believe that the only way Nigeria can survive is for government to truly diversify the economy by encouraging local production and industrialization. Our continued reliance on oil rent for survival is no longer sustainable. Government should boost the agricultural sector with the aid of technology by encouraging public and private investments in the sector. With vast land resources both in quality and quantity, Nigeria has no excuse of not producing enough to meet the food requirements of its citizens. Hunger is a major threat to Nigerians and this can only be addressed through mechanized farming producing for local consumption and exports.
NIGERIA is the largest market in Africa for goods and services. As such, government should emplace a policy of ensuring that producers and suppliers of these goods and services establish their factories and bases in our home soil to service the country and other parts of the continent instead of becoming a dumping ground for all manners of products imported from other lands. For instance, manufacturers of automobiles should be encouraged to establish their plants here as there is no bigger market for their vehicles other than Nigeria. In the same vein, users of raw materials from our oil and agricultural sectors should be mandated to establish their refineries and processing firms in Nigeria. This will reduce the cost of production and prices of the finished products as the huge cost of transporting the raw materials overseas for processing and bringing the finished products back for market will have been avoided. If there is political will, government has the capacity to reduce our importation of basic goods and services by encouraging foreign investors to turn Nigeria into an industrial hub in Africa.
HOWEVER, the above cannot be achieved without an enabling environment for investment. If government is serious about industrialization and job creation, it must provide the basic infrastructure that will support investment. A key sector which must be fixed is power. Government cannot continue to pay lip service to stable power supply and expect investors to find Nigeria desirable.
OUR poor transportation system is still a factor that is capable of discouraging investors as our roads are in sorry state while other transport sectors still have the challenge of inefficiency. More importantly, the growing level of insecurity across the country has continued to ward off investors from Nigeria. Government must address the security situation in order to make Nigeria a safe haven for investors.
THE Hope believes strongly that having a strong and virile economy that we will all be proud of will not come by wishful thinking but by deliberate and concerted efforts by citizens and government in emplacing policies that will support same.

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