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The quest for naira revaluation (2)

By Sule Magaji
11 February 2016   |   6:03 am
Continued from yesterday THE way out of this quagmire is that we should not only avoid export of raw materials but also adopt a scientifically mechanised agriculture to produce sufficiently for our food security and provide inputs to our industries. Also, some imports of industrial products can be substituted through local production. Nigeria should have the capacity to produce furniture, textile, pharmaceutical products,…

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Continued from yesterday

THE way out of this quagmire is that we should not only avoid export of raw materials but also adopt a scientifically mechanised agriculture to produce sufficiently for our food security and provide inputs to our industries. Also, some imports of industrial products can be substituted through local production. Nigeria should have the capacity to produce furniture, textile, pharmaceutical products, cosmetics, shoes, bags, kitchen utensils, and so on. Once we begin to produce these necessities locally then custom duties can be raised on the affected items. This would enable us to conserve the scarce foreign exchange which should only be used to import productive equipment and machinery in the short-run before we have the means to produce by ourselves in the near future. By taking this measure, we shall achieve youth employment, reduce imports and revitalise the Naira.

Economic growth guided national orientation
Our leaders should lead by example. Modesty in spending, patronage of locally made products, spending holidays in local tourist centres, and guarding against provocation by miscreants should be the tasks before them. Even though the poor youth mostly serve as ready recruitment pool for militants, our political elite contributes significantly to Naira failure by looting the economy, investing abroad, and developing a gargantuan appetite for luxury imports. We should have a top-down display of patriotism; patronage for local products, moderation in spending, and eschewing ethno-religious violence in order to create conducive economic and social atmosphere for Naira to recover in value.

Conclusion
To revalue our naira is synonymous with improving our purchasing power and, therefore, our standard of living. From the foregoing, the necessary condition for Naira revaluation is increase in productivity, improvement in the value of export, curtailment of imports, conserving our scarce foreign reserves, ensuring enabling economic environment through fighting corruption and insecurity, as well as national orientation to ensure patriotism, investment culture, modesty and honesty so that our wealth can circulate among us. The best condition for Naira revaluation is for the monetary authorities to be proactive to translate any regained Naira value into reality whenever our sums of receipts exceed sums of payments in international transactions and not to allow for mismanagement and embezzlement of accumulated foreign reserve.

• Concluded

• Professor  Magaji is of the Department of Economics, University of Abuja.

 

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