Fall in currency value: Like Nigeria, like UK

October 24, 2016

THE Nigerian naira has been falling against major currencies of the world since last year due to the crash in the global oil price, which accounts for over 75 percent of Nigeria’s foreign exchange. From N150 to $1 just over a year ago, the naira has plummeted to about N450 to a $1 today.

Consequently, because Nigeria is an import-driven economy, the price of virtually everything — goods and services — have been going up, thereby putting Nigerians deeper into poverty. This happens when income is not increasing, but the expenditure is going over the roof.

However, the British people are also experiencing what Nigerians are experiencing, but in another way, because the pound has been falling against the dollar since the people voted to leave the European Union in June.

Now, travelling is one of the passions of the British people, and they now have to spend more on their travels.

However, it is only the cost of foreign made products that are going up, and since the UK has a thriving manufacturing and agricultural sectors, they are not obliged to import costly products. In fact, the fall in the value of the pounds will be better for the UK in the longer term.

However, in our case, we import all the products we need for our survival; we import food despite having large expanse of arable land; we import petroleum products, we import clothing materials, we import even drugs, water, toothpicks, among others. So how do we expect not to feel the recession?

In the UK, the people have a choice to travel locally instead of internationally to save costs; they also have the option to buy locally-made products that are cheaper than costly foreign made products. That is why the British will not feel the impact of their falling pounds, but in Nigeria, we have no choice than to import these basic items for our survival.

Why am I comparing these two scenarios? I am doing this because we need to know that we cannot continue to rely on importation to survive as a nation. Let us focus on our local products; let Nigerians shun the Italian shoes and bags and opt for those made in Aba. Let us shun the expensive imported suits and use our local fabrics of adire in Abeokuta to make suits.

Let us build more refineries so that we can refine our petroleum products at home instead of importing. We should also develop our agricultural sector so that we wouldn’t need to import food any longer. These are the simple ways through which we can protect our economy from future economic turbulence. All hands must, therefore, be on deck towards making Nigeria self-sustaining.