The Nigerian Naira continues to plunge downwards as recently, the naira further depreciated against the US dollar to close at N419.33 to a dollar representing a 0.2% fall compared to N418.52/ $1 recorded in the previous trading session. The central bank of Nigeria (CBN) has however lamented that the main cause of the fall of the Naira is due to the nation’s over-dependency on imports.
They further advised Nigerians to adopt the use of homemade products to boost the country’s economy, to stop the Naira from further depreciating in the parallel market. In a bid to reduce the nation’s over dependence on imports and promote financial stability and economic development, it was disclosed that the Central Bank Of Nigeria implemented interventions in the manufacturing, agricultural, and other sectors.
Commenting on this issue, the CBN’s currency operations department head, Mrs. Uchenna Onyene urged Nigerians to use the naira with caution, citing section 21, sub-section 4 of the CBN act 2007. She also urged Nigerians to adopt the CBN’s cashless strategy to decrease the risk of naira from failure, to improve seamless transactions.
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According to statistics, Nigeria’s exports skyrocketed by 51% to N18.91 trillion in 2021. As a result of the FX outflows, a $5.26 billion negative balance of payment was made in 2021. It is not just enough for the Central Bank to lament the fall of the Naira, there needs to be a solution implemented by the government to stop the country’s overdependence on foreign products.
The government has failed to develop different sectors in the country that will manufacture locally made goods. It has already become a norm for the government and Nigerians to choose foreign-made goods over the ones that are produced locally. How do you explain that a government that constantly imports foreign cars, yet has a car manufacturing plant in its country laments about the fall of the Naira? It makes no sense.
They continue to look down on the ones produced here locally, stating that it is inferior compared to those imported. There have been countless occasions where the government imports cars for its lawmakers. The lawmakers were said to have rejected Nigerian brands, insisting on foreign ones, preferably imported and not locally assembled.
They continue to spend exorbitant amounts on goods, even the ones that are locally produced in the country, yet they always keep lamenting each time the naira falls. The obnoxious high taste for imported goods by the government and among Nigerians has caused more harm to the nation’s economy. No successful economy thrives on the promotion of imported products over the exportation of locally manufactured products.
In a close observation of developed and developing countries, one evident thing is that they are more of a manufacturing economy than consumers economy. They produce a large number of goods they use and import only a few for consumption. The Nigerian government continues to treat the development of locally made goods with disdain and a lackluster attitude.
Nigerian government even goes as far as importing goods that can easily be produced locally, yet they still go-ahead to import goods that can easily be produced locally. They steadily import goods which have led to the fold-up of so many thriving factories in the country, which also resulted in a high number of job losses.
The government is aware that constant importation often leads to forex scarcity, as a result of an increase in the demand for dollars by importers. It’s high time the government develops local factories in the country to avoid the further depreciation of the naira and over-dependence on foreign goods.