Naira Conundrum: Unpacking Nigeria’s soaring airfare

 

 

A 47-year-old Nigeria Airways flight promotion recently stumbled upon, sparked a crucial conversation about the state of the Nigerian economy, with many pointing to the naira as the root cause of the country’s economic woes. 

A closer look at the changes in flight ticket prices from Lagos to London between 1978 and 2025 revealed a stark reality. 

In 1978, the exchange rate was $1 to N0.6, whereas today it’s $1 to N1500. It is therefore expected that the significant depreciation should have far-reaching implications on the ailing economy.

Let’s consider the Lagos/London airfare in 1978, which was N527. Adjusting for the exchange rate, that’s equivalent to approximately $878.33. 

Fast-forward to 2025, the airfare stands at N1,500,000, which translates to around $1000 at the current exchange rate. 

While the airfare price increase appears significant, factors like inflation, airline pricing strategies, and global economic conditions also play a role.

However, the crux of the issue lies in the naira’s undervaluation. 

Estimates suggest a fair value range of N900 to N1000 per dollar, with some analysts predicting it could trade around N680 per dollar. 

This undervaluation has severe consequences for the economy, making imports expensive and stifling local production. 

The country’s reliance on imports has led to a decline in domestic manufacturing, with many industries shutting down or operating below capacity.

A glance at Nigeria’s industrial landscape reveals a stark reality. Once a hub for local production, the country has shifted to importation, shutting down residual assembly plants, battery plants, tyre industries, and other manufacturing facilities. 

The decline of industries like cocoa, rubber, groundnut, and cotton has further exacerbated the situation. 

Our country’s agricultural sector, which was once a major foreign exchange earner, has also suffered due to lack of investment and support.

The consequences of this economic trajectory are far-reaching. The country’s infrastructure is in disrepair, with inadequate power supply, poor road networks, and limited access to quality education and healthcare. 

The manufacturing sector’s decline has led to a significant increase in unemployment, with many Nigerians struggling to make ends meet.

The question remains: is it the fault of the naira? 

While the naira’s value has certainly contributed to the economic woes, it’s clear that misplacement of priorities and fiscal foolishness have played a significant role. 

The focus should now be on stabilizing the naira and reviving local production. This can be achieved through a combination of monetary and fiscal policies that promote economic growth and development.

By revamping industries, investing in infrastructure, and promoting local manufacturing, Nigeria can reduce its reliance on imports and strengthen the naira. 

The government can implement policies that encourage entrepreneurship, innovation, and investment in key sectors like agriculture, manufacturing, and technology. 

Additionally, investing in education and healthcare can improve the quality of life for Nigerians and increase productivity.

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The solution lies in a multifaceted approach that addresses the root causes of the economic challenges. 

It is time to rethink priorities and work towards a more sustainable economic future. 

As the saying goes, “Naira is not stupid, but Nigerians are.” The country’s economic woes are a result of human actions and inactions, and it’s up to the government and citizens to work together to build a better future. 

By doing so, Nigeria can unlock its vast potential and become a major player in the global economy.