5 Ways Nigeria can strengthen the naira through glocalisation

To stabilise and strengthen the naira, Nigeria must transition from an import-dependent economy to a production-driven one. This requires a glocalisation strategy—prioritising local production while expanding for global competitiveness. Here are five key strategies:

Invest in Value Addition – Nigeria exports raw materials like crude oil, cocoa, and solid minerals but imports refined petroleum, chocolate, and manufactured goods at higher costs. Developing local processing industries will increase export earnings, reduce forex outflows, and create jobs. Countries like Malaysia transformed their palm oil industry through value addition, a model Nigeria can replicate.

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Boost Local Manufacturing – The manufacturing sector contributes only about 9% to Nigeria’s GDP, far below its potential. Encouraging import substitution by supporting industries like textiles, machinery, and consumer goods will reduce forex demand, increase employment, and strengthen local industries. Incentives such as tax breaks, low-interest loans, and improved infrastructure will be key to revitalising manufacturing.

Expand the Digital Economy – Nigeria’s fintech sector has already shown global competitiveness, attracting over $1 billion in foreign investment in 2022. By investing in digital infrastructure, expanding broadband penetration, and fostering tech startups, Nigeria can position itself as a global hub for software development and outsourcing, increasing forex inflows.

Leverage AfCFTA – The African Continental Free Trade Area (AfCFTA) offers Nigeria access to a $3.4 trillion market. By expanding exports of manufactured goods, processed agricultural products, and digital services to other African nations, Nigeria can reduce reliance on dollar transactions, ease forex pressures, and boost regional trade.

Improve Infrastructure – Nigeria loses an estimated $29 billion annually due to inadequate electricity supply, while poor roads and inefficient ports drive up production costs. Investing in power, transport, and logistics will enhance industrial productivity, make locally produced goods competitive, and support a thriving export economy.

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By implementing these strategies, Nigeria can reduce its dependence on imports, boost foreign exchange earnings, and build a self-sustaining, globally competitive economy. A stronger naira begins with a stronger, more productive Nigeria.