FG must act now to stabilise the exchange rate
The urgent task of reducing and stabilising Nigeria’s exchange rate—and, by extension, reviving the nation’s economy—has become critical in light of the severe economic hardship facing the country.
As the saying goes, when two elephants fight, the grass suffers. In this case, it is ordinary Nigerians who bear the brunt, struggling not just to make ends meet but to survive in an increasingly harsh economic environment.
It is no longer news that the exchange rate in the parallel market has been fluctuating between ¦ 1,500 and ¦ 1,700 per US$1, worsening the financial woes of businesses and individuals alike. Since the removal of fuel subsidies in 2023, the situation has deteriorated, with little to suggest that the Federal Government is taking concrete steps to stabilise the naira.
No nation can thrive under such excruciating economic conditions while expecting its citizens to remain hopeful. The impact is particularly devastating for low-income earners, as rising inflation translates into exorbitant costs of goods and services.
A brief visit to any market will reveal the bleak reality: a N100 note is rapidly losing its purchasing power, much like its ¦ 5, ¦ 10, ¦ 20, and ¦ 50 counterparts. Coins have long disappeared from circulation due to the relentless depreciation of the naira.
In the colonial era, a single penny or shilling could cater for an entire family’s meal, thanks to the strong value of the currency. But today, what do we have? A naira that is almost worthless.
At its inception, the naira exchanged at 75 kobo to $1. How did we end up here? Should we applaud our leaders for steering the nation towards economic ruin?
Achieving economic stability does not require rocket science. All it takes is assembling a competent team of economic and financial experts who can reposition the country on the path to recovery.
Former President Olusegun Obasanjo successfully did this by bringing in technocrats like Dr Ngozi Okonjo-Iweala, Dr Obiageli Ezekwesili, and Professor Chukwuma Soludo, among others. The results were evident: Nigeria paid off its external debts and accumulated foreign reserves. However, subsequent administrations have recklessly plunged the country back into debt through excessive borrowing.
Meanwhile, our universities continue to produce groundbreaking research, yet policymakers fail to engage local scholars or utilise their findings. Economic and political analysts are understandably alarmed by Nigeria’s escalating debt profile.
The solution to Nigeria’s economic woes is straightforward: adopt the right policies and implement them effectively.
For instance, no country can survive as a purely consumer-driven economy while expecting financial stability. The collapse of Nigeria’s manufacturing sector has played a major role in the country’s economic decline.
Where are the once-thriving textile industries such as Afprint and Aswani Textiles? These companies once operated multiple shifts, providing thousands of Nigerians with stable employment.
What happened to Michelin, SCOA Motors, CFAO, and Electro Hall? The answer is simple: frequent power outages forced them to shut down or relocate. In the past year alone, the national grid has collapsed multiple times, further crippling businesses and industries. Under such conditions, how can companies survive?
If Nigeria struggles with technology-driven industries, what about agriculture? The country boasts one of the largest land masses in the world, with vast arable land, yet the sector remains grossly neglected.
In many Western countries, farmers are among the wealthiest individuals, thanks to government support. If the Nigerian government cannot engage directly in farming, it should at least create an enabling environment by investing in infrastructure and removing unnecessary tariffs and excessive taxes.
Instead of introducing endless tariff hikes and levying heavy taxes on already struggling citizens, the government should focus on promoting locally made goods.
Leaders must lead by example by patronising homegrown products rather than indulging in imported luxury items. There should be legislation to enforce the use of locally produced goods in government institutions and offices.
Nigeria cannot continue to allow economic mismanagement to dictate its future. If effective policies are introduced and implemented, there is no reason for the naira to exchange at ¦ 1,650 per dollar.
The journey towards economic recovery and industrialisation starts with a single step. The time for action is now. Let us do the needful and set Nigeria on the path to sustainable growth.
