By Sunny Chuba Nwachukwu
The economic growth or development problems, with the attendant social equity challenges facing the nation’s business space, are significantly better imagined than witnessed. What do I mean? The ailing economy and the constantly sliding value of the exchange rate of the local currency, the naira, is something to seriously worry about; and its depreciation needs to be curbed, as a matter of urgency! Today, naira exchanges at a ridiculously low rate of near N600/$; and still tanking but, God forbid! The reason being that many in the upper social class in the society are not helping matters due to their ostentatious lifestyle that is not adequately supported by any privately established source of income or revenue generation; and therefore, not sustainable within the economy. A clear instance is the trending news that the Nigerian Customs Service (NCS) has threatened to impound 29 private airplanes. On the other hand, the level of moral decadence and terrific erosion of values in our contemporary society is alarming! One personally detests the use of the word, ‘corruption’, because it is quite embarrassing to tag the nation’s image with such adjectives but, it’s real.
The nation’s economic indices, vis-a-vis the economy’s performance, unemployment, productivity and prices that assess and measure both microeconomic and macroeconomic fabrics; the low Gross Domestic Product (GDP) and high inflation spell economic doom and portends abject poverty. The state of the economy presently manifests economic recession occasioned by heavy imports of consumable items (estimated around 90% of the total domestic daily needs). This situation is the result of the chronic inactivity in the real sector that should produce for internal consumption. It is an outcome that is visibly noticed in the absence of prosperity that ought to have been driven by sustainable economic and commercial activities. In our own scenario, political manoeuvring against the state, through financial misconducts, fraudulent activities or funds misappropriation by some key politically empowered persons (PEPs) in the society, drag the economy down and backwards.
However, the mechanism of currency devaluation could be a strategy to strengthen the economy. If there is a stable political and an enabling business environment in existence, both can attract foreign direct investment (FDI) and local investors to collectively join hands and team up to promote productive activities in the land. The government could go shopping for prospective investors through the federal government agency on investment promotions; and could also liaise or partner with the chamber movement in the country. The Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), could deploy one of her services tools – the trade missions trips or exhibition and fairs – by her various programmes and activities in the private sector. Great sensitisation and awareness creation could be achieved through the organised private sector (OPS) participation to market foreign investors through business matching by members wooing foreign partners to open up shops for in-country productive activities within the nation’s real sector. It is a sure road map and feasible approach towards economic emancipation, growth and development. The federal government is, therefore, urged to rise to the occasion and leverage the available opportunities as enumerated here.
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The envisaged strong economy for Nigeria cannot be far fetched if a wake up call is strategically planned, applied and implemented from now because, the nation has enormous economic potentials to change the tide any day. This can be achieved on the grounds that those put in positions of authority shall be patriotic enough to deliver, without selfish interests superseding that of the state.
The other economic indicators, namely, interest rates, balance of trade, consumer price index, for example, are strong indices that influence economic growth and improvement in national income, if properly and professionally managed towards building a strong economy. Already, the sliding naira value is enough signal for the attraction of heavy financial inflow for investment purposes in a very attractive and large market in the subregion, if political instability and insecurity to lives and property were not a problem. In a situation where there is lack of conducive atmosphere or environment to freely operate and allow businesses thrive for financial and economic gains, nothing much or visible could be achieved, in terms of prosperity and growth. Based on the identified growth factors, their application and the right monetary and fiscal policies (vis-a-vis low interest rates on borrowed funds, and proper taxation) would raise the nation’s external reserves through exports that would translate to better international trade performances with favourable balance of trade (surplus balance) on consumer goods.
The consumer price index (CPU) will be automatically influenced by improved productivity and high GDP growth; which shall positively impact the low currency value and exchange rate status, subsequently.
Sunny Nwachukwu, PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on +234 803 318 2105 (text only) or email@example.com
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