Naira: Its Collapse, Economic Implications and Remedy

By Marshall Odede

As of December 31, 2024, Nigeria’s economic reality has been punctuated by the staggering depreciation of the Naira.

Its pitfalls of policy missteps and underutilized potentials have their downsides.

The Naira, a symbol of national economic health, has seen its value plummet, marking one of the steepest declines among African currencies.

The Naira’s Unprecedented Decline

In 2024, the Naira depreciated by 104.38%, moving from ₦758 per US dollar in 2023 to approximately ₦1,549.18.

This drop was spurred by the Central Bank of Nigeria’s foreign exchange liberalization policy, introduced in June 2023 to unify exchange rates and attract foreign investment.

While the move aimed to create a transparent forex market, it inadvertently heightened exchange rate volatility, eroded investor confidence, and amplified inflation.

Policy Decisions and Their Fallout

Under the leadership of President Bola Ahmed Tinubu, economic reforms were initiated to address Nigeria’s longstanding fiscal challenges.

The removal of fuel subsidies was heralded as a bold step to redirect funds toward public welfare and infrastructure.

Additionally, policies to increase access to credit and attract investment were implemented.

However, these measures have failed to yield significant relief for the average Nigerian.

Inflation has skyrocketed, and the cost of living continues to surge, making basic commodities unaffordable for millions.

Critics argue that dependence on borrowed ideas and Western economic frameworks has hamstrung Nigeria’s potential to craft sustainable, localized solutions.

A Nation of Untapped Wealth

Nigeria, often dubbed the “Giant of Africa,” is endowed with abundant natural resources, arable land, and a vibrant, youthful population.

Yet, systemic corruption, policy inconsistencies, and infrastructural decay have kept the country from realizing its economic potential.

Opposition figures, including 2023 presidential candidate Dr. Gregory Peter Obi, have emphasized the importance of productivity as a cornerstone of national development.

He contends that no nation can thrive without producing goods and services, urging constitutional reforms to foster an economy driven by self-reliance and innovation.

The Way Forward: A Call for Economic Redemption

To reverse this economic decline and unlock Nigeria’s immense potential, the following steps are imperative:

1. Promoting Good Governance: Leadership accountability and transparency must become the foundation of policy execution.

2. Addressing Corruption: Tackling graft and mismanagement at all levels of government will restore investor confidence.

3. Revamping Infrastructure: Investments in critical sectors such as energy, transportation, and digital infrastructure are crucial.

4. Fostering Productivity: Policies that encourage domestic production, particularly in agriculture and manufacturing, will reduce reliance on imports and create jobs.

5. Engaging Constitutional Reforms: Restructuring legal frameworks to enable economic initiatives and protect investments is essential.

Conclusion

Nigeria’s Naira crisis is a stark reminder of the consequences of misguided policies and unfulfilled potential.

The country stands at a crossroads, with a choice to either continue on its current trajectory.

Or embrace a path of accountability, innovation, and self-reliance.

For Nigeria to rise as an economic powerhouse, good governance and a renewed commitment to productivity must become the administration’s guiding principles.

The fight for economic redemption is not just about stabilizing the Naira but about redefining Nigeria’s future as a prosperous and self-sufficient nation.

Marshall Odede, Edo State.

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