• Wednesday, July 24, 2024
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BusinessDay

Where did we go wrong?

What to expect from Nigerian economy in next six months

It feels like a distant dream now—the time when production fueled our economy more than consumption, and 1 USD equaled 0.55 Naira, with a black-market rate of 0.90 Naira, as documented by data from StatiSense. Some may have complained back then, but none could have imagined the dire straits we find ourselves in today.

Oh, if only we could return to those days when prosperity seemed within our grasp. Back then, things appeared promising, even if not flawless. Little did we anticipate the depths to which we would plunge.

Exactly 44 years ago, the Nigerian Naira stood proudly as a robust currency, valued higher than the USD. Today, it’s a heart-wrenching reality. How lamentable that we now face a scenario where $1 equals ₦1456, £1 equals ₦1904, and €1 equals ₦1885.

“Until we address these critical institutional weaknesses, our country cannot return to the productive economy of 44 years ago—a sad and painful reality.”

This dire situation has ignited a firestorm of curiosity among experts, professionals, and businessmen who witnessed the vibrant 70s, productive 80s, and the current economic crisis. They are demanding answers: Where did we go wrong?

In the 1980s, Nigeria’s economy was significantly more productive than it is today, as indicated by several metrics. At that time, Nigeria was a net exporter of refined petroleum products such as gasoline, diesel, and kerosene.

However, today, the situation has tragically reversed, with Nigeria importing all its refined petroleum products despite being one of Africa’s leading oil producers.

The nation’s oil and natural gas sector has faced persistent challenges over many years. According to Energy.EconomicTimes, most of Nigeria’s state-run refineries are no longer functioning due to inadequate maintenance.

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During the bustling 80s, we rode in locally assembled cars, buses, and trucks. Peugeot cars in Kaduna and Volkswagen cars in Lagos. Leyland produced trucks and buses in Ibadan, while ANAMCO in Enugu also produced buses and trucks.

Steyr in Bauchi produced our agricultural tractors. And it was not just assembly; we were producing many of the components. Vono products in Lagos produce vehicle seats. Exide in Ibadan produces batteries, not just for Nigeria but for the entire West Africa.

IsoGlass and TSG in Ibadan produced windshields. Ferrodo in Ibadan produced brake pads and discs. Dunlop produced tyres in Lagos, and Michelin tyres were produced in Port Harcourt. These tyres were made from rubber plantations located in Ogun, Bendel, and Rivers State.

We were listening to radios and watching television sets assembled in Ibadan by Sanyo. We were using refrigerators, freezers, and air conditioners produced by Thermocool and Debo. We were wearing clothes produced by the UNTL Textile Mills in Kaduna and Chellarams in Lagos, made from cotton grown in Nigeria.

Our water ran through pipes produced by Kwalipipe in Kano and Duraplast in Lagos. Our toilets were fitted with WC units produced in Kano and Abeokuta. We cooked with LPG gas stored in cylinders produced at the NGC factory in Ibadan.

Our electricity flowed through cables produced by Nigerian Wire and Cable, Ibadan; NOCACO in Kaduna; and Kablemetal in Lagos and Port Harcourt.

We had Bata and Lennards Stores produce the shoes we wore. These shoes were made from locally tanned leather in Kaduna. We mainly flew Nigeria Airways to most places in the world, one of the largest airlines in Africa at the time.

Most of the food we consumed was grown or produced in Nigeria. We were producing all of the above and more in the 1980s. Today, we import almost everything. Isn’t that alarming or surprising? Rather than moving forward, we are regressing—is this not traumatic?

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The exchange rate shocks we are experiencing today are a direct result of our lack of production and institutional weakness. Until we address these critical institutional weaknesses, our country cannot return to the productive economy of 44 years ago—a sad and painful reality.

Looking at our past achievements, it is clear that we had the potential for greatness. The 1980s were a testament to our ability to be self-reliant and industrious. We produced, assembled, and maintained an economy that many envied. Our infrastructure supported local industries, and our labour force was engaged in meaningful production.

But today, the narrative is different: our industries are dormant, our refineries are in disrepair, and our economy is overly dependent on imports. This dependence has weakened our currency and our economic stability. It is a sobering reminder of how far we have fallen.

Addressing these issues requires more than just policy changes. It demands a collective effort to revive our industries, improve our infrastructure, and strengthen our institutions. We need to invest in maintenance, support local production, and reduce our reliance on imports. Only then can we hope to restore the prosperity we once enjoyed.

The road ahead is challenging, but it is not impossible. By learning from our past and committing to sustainable development, we can rebuild a resilient and productive economy. It is time to take decisive action and reclaim our position as a leading economy in Africa. We owe it to ourselves and future generations to get it right this time.