This is a function of market forces. No government has the power to determine the value of its currency. It is a function of its economic capacity and capability. So long as we remain import-driven without commensurate export of local production to compete favourably in the international market, so long will our naira continue to fall. Government must put in place mechanisms to develop local industries to gear up local production. We need to produce what we use and use what we produce; that way, our naira will not fall in relation other currencies.
To help our economy and the naira grow, we must move from consumption to production. This is not the first time the CBN has used the dollar to stem the slide of the naira. The practice has been going on over the years but the more the CBN attempts to defend the naira, the more the exchange rate plummets. Any discerning mind will conclude that digging a hole to cover a hole is a fruitless exercise. The CBN’s strategy in exchange rate management appears to be faulty. The economic principle of devaluing local currency to boost exports will only be beneficial if, after devaluation, exports are invoiced in local currency.
Ojo Odewabi, Lagos
The fluctuation of naira is hurting the economy as the prices of goods and services have hit the rooftop with devastating impact on the common man. The rise in dollar rate is telling on Nigerians because the Nigerian economy is import based. As you may know, we practically import almost everything, including toothpick and as such any time dollar rises against the naira, the effect is immediately noticed as we can see on the prices of petroleum, rice and other essential commodities. President Tinubu’s economic team should initiate policies that could lead to diversification of the economy from oil. It is sad that after 60 years of independence, Nigeria fell from an agro-based economy to a nation that could barely feed its citizens. It is also appalling that despite the fact that the country falls among leading petroleum nations in Africa, it can’t boast of any functional refinery. All these obstacles must be overturned if we must truly become the giant of Africa.
Both are intertwined. The Nigerian economy is so dependent on the dollar and whatever affects the exchange rate affects prices and subsequently, the welfare of Nigerians. Of course, the present situation has created more poverty in the system. More frustrating is the fact that the ruling class is paying lip service to it. There is no committed effort to ameliorate the situation. It is quiet sad.
This is a country where we go from one problem to another. Every day you hear a story that is adding to the suffering of Nigerians. This development is affecting the living conditions of citizens. In other climes, governance is about improving the living conditions of the people but in Nigeria, it is the opposite. Most Nigerians believe that lifting the ban on some items would make a difference. We all should know better that the lifting of ban is just a political statement.
Change, they say, is constant. This is why I see things differently on this issue. It gives us opportunities to tap into the advantages of the free fall. If we can’t control how we respond to it, which is to find opportunities to receive dollars for either services or sales here, the solution is what is needed and not focusing on the pain but on how to gain from the pain.
This is a pointer to leadership failure. Nigeria imports many essential items. A devalued naira can only lead to higher prices for these goods. Again, rising insecurity, high cost of production, unemployment, national debt, systemic corruption and high taxes are all part of the causes of high cost of living. Palliative is not the solution; it’s another opportunity for embezzlement for privileged individuals. Let the right people do the job and we will overcome these issues.
The free fall of the naira and the high cost of living in Nigeria as presently constituted has weakened the aspirations and dreams of the citizens. People have left their dreams to struggle for survival while others have left the country. The solution is to change the direction of our economy to a productive and not a consuming one. The naira will keep failing and inflation at an all-time high, as long as we keep our economy this way. The drivers of our economy know this but no reasonable effort is being made to address the issues.
The free fall of naira is a direct reflection of two things: government policies and over-dependence on importation. As long as CBN policies and other fiscal agencies keep floating the naira, and the country is importing rather than producing, the naira’s fall is inevitable. Yet, factors of production in Nigeria are badly affected, and infrastructure and basic amenities are lacking. Unless these are addressed, the naira will fall further.
What do we expect from an import-dependent country? It is high time we diversified the economy. Some foreigners are in this country pretending to be government contractors but are mining gold and other minerals for free, enriching a few people. Nigeria is so blessed but we starve ourselves because of the wrong decisions of our so-called leaders. I wish we could do away with these few that have nothing to offer the country and allow technocrats to come up and turn things around. The naira will stabilize only when we begin to produce. We must go back to agriculture.
The rise in the value of the US dollar against the naira has impacted the cost of living. As the naira weakens against the US dollar, prices and inflation rise. This has made basic goods and services more expensive for the average person. The government has to implement policies to stabilize the exchange rate and manage inflation or else the common man may not be able to afford food.
This administration has shown a total lack of interest in reversing the ordeal but rather fuelling an already bad situation by the implementation of bad economic policies. In a space of five months, they have borrowed stupendously as the debts keep piling up. Also, the extravagant lifestyles of government officials with about fifty ministers and retinue of aides, a spend thrift legislature that has no business with checks and balances. Industries and manufacturing concerns can no longer operate. The effect is an unimaginably high cost of living such that some are opting to take their lives due to the level of hopelessness.
Truly, the purchasing power of the naira has fallen, leading to an increase in the prices of imported goods and services. Furthermore, it makes it more challenging to afford necessities such as food, fuel, transportation, healthcare and machinery, thus, a decline in quality of life. Unfortunately, it also limits educational and business opportunities abroad because travelling abroad now is costly. The free fall of the naira and high cost of living have led many into depression, frustration and suicide rate is on the rise.
The current naira crisis, which has put naira at N1,200 per dollar in the parallel market, is caused mainly by overdependence on oil, a situation that mounts pressure on the already worsening cost of living. We need to help non-oil export products thrive. Exchange rate policies should make export prices cheaper in order to benefit local industries.
The free fall of the naira and the high cost of living in the country is a serious issue that needs to be addressed. The adverse negative impact it has on the economy is alarming and the standard of living is deteriorating. Inflation, economic instability and global market conditions are worrisome. Whatever the causes, all hands need to be on deck and address this. The federal, state and local governments need to partner with the stakeholders and agencies to curb this.
The free fall of the naira is indeed a bad omen for the country and its exponential effect is the high cost of living. However, it is not unexpected when a government introduces a new policy. You can’t continue to do things the same way and expect a different result. However, the Federal Government economic team should do something to arrest the downward trend of the economy. It is not too late to form a consortium of economic and financial experts to advise the government on how to tackle the problem.
Erica Joy, Lagos
This is a result of Nigeria’s lack of productive capacity; we are import-dependent with little export earnings. We spend more on importation particularly of luxury goods than we export. The naira would continue to move away from consumption to production. The NASS wants to import no fewer than 400 SUV’s worth billions. We have Innoson Motors in Nigeria, why can’t we buy the locally made SUV and such money would generate employment here rather than pay to another country?
Nigerians are in turmoil right now. So many businesses may not survive this. The fall of the naira has affected businesses. As a result, the cost of living in the country is outrageous. The prices of goods and services are increasing on daily basis. I don’t know how soon we are going to recover from this as a country.
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