Strengthening The Naira -By Marie Obiora

It is common knowledge that the naira has reduced significantly in value since the sharp drop in the value of crude oil. The naira is Nigeria’s currency and Nigeria relies on the sale of crude oil as its major source of revenue. A lot has been said on how the value of the Naira can be strengthened. I’m going to mention ideas that reflect mine.

Refining crude oil for domestic consumption: A significant amount of foreign exchange is used to purchase petrol, diesel and kerosene. Once upon a time, there were four functioning refineries in Nigeria. Today, Nigeria is assumed to produce around only 10% to 25% or thereabouts of fuel consumed domestically. A lot of foreign exchange is sort to buy these products in order to make up the short fall but if Nigeria can refine crude oil and produce these fuels for domestic use, the demand for the US dollar will reduce significantly hence boosting the value of the naira.

Patronizing domestically produced goods: Nigeria imports almost everything; this means that foreign currencies are always in high demand especially the US dollar. Strangely, the ruling class already dress Nigerian and all they need to do is advice all other professionals in the country to follow suit. This will reduce the importation of foreign clothes and will also boost employment because local tailors will be patronized and more people will join the apparel industry. The value of the naira will thereby be strengthened.

Developing the Agricultural sector:  Nigeria needs to develop the Agric sector which has a lot of subsistent farmers and a few medium sized manual farms. If it can produce enough food to feed its populace, it will reduce importation of various food items and again the value of the naira will increase. Nigeria can also consider increasing the production of cash crops such as Cocoa, Groundnut and Palm kernels. Exporting these products will earn foreign exchange for the country and strengthen the naira. There are other agricultural products such as fruits that can attract foreign organizations involved in the production of fruit juices, to come and produce and export these juices from Nigeria.

Infrastructural development: The fastest way to encourage foreign investment into Nigeria is to improve electricity supply, road network and water supply. Any country that has these in place will have a lot of foreign companies making investment enquiries and setting up factories. This will mean more exports for Nigeria and therefore a stronger naira.

These ideas are not exhaustive but they are a starting point. There are a host of other measures that could be carried out to strengthen the naira but these might be a good place to start.