24 February 2016•Update: 09 May 2016
By Rafiu Ajakaye
LAGOS, Nigeria
Nigerians are looking inward to address their economic woes after being hit by an estimated 60 percent drop in national revenues from oil and crises arising from shortage of foreign exchange.
Some measures being employed are a campaign for Nigerians to buy locally-made goods and patronizing of local service providers.
This call is precipitated by the foreign exchange crisis that has led to serious rise in the cost of commodities. Since the government's earnings have dropped, it has been unable to meet foreign exchange supply to support the largely import-dependent economy, according to experts.
Moreover, since most importers have no access to foreign exchange from official quarters, owing to a central bank policy banning banks from giving foreign exchange to importers of goods that could be sourced locally, they have had to scramble for it in the parallel market where one U.S. dollar is exchanged for between 397 nairas and 400 nairas. The official rate is 199 nairas for a dollar.
This has had exponential effects on the price of commodities, mostly imported ones in the country. The crisis is not helped by the fact that most Nigerians love to brag about using imported things, while the country does not produce enough for its population.
With critics ridiculing the government for losing its hold on the economy, Nigeria's ruling All Progressives Congress (APC) last week launched a social media campaign called #MadeInNigeria to spur citizens into buying local products in efforts to cut demand for foreign exchange and grow the local economy.
"Not just physical products. If you have a service/solution, tweet it at us with using #MadeInNigeria and remember to include contact number," APC tweeted recently to promote local goods and services.
This was preceded by #BuyNaijaToGrowTheNaira, another social media campaign initiated by Senator Ben Murray-Bruce. According to the senator, the way to resolve the naira problem is to prefer local goods over foreign ones.
Nigeria produces a number of consumer goods, although issues of qualities and protectionist laws of some countries are believed to hamper exports. Recently, a local firm in the country started producing SUV cars and buses, which too were being aggressively promoted online and on air.
Analysts say such initiatives are laudable but warn that they are not enough to save either the falling naira or the local economy.
"I honestly don't think this campaign will save the economy," Tunji Andrews, an economist, told Anadolu Agency.
Andrews said the campaign did not necessarily help businesses. "Let's be honest, it's a nightmare to do business in Nigeria. Even the strong fall and crumble, so a supply-driven campaign will not do much for the economy as a whole," he said.
"While everyone is focused on solving the FX [foreign exchange] supply challenge, the larger issue of inefficiency of the Nigerian economy to effectively sweat its assets continues to stare us in the face," he said.
Atiku Samuel, financial analyst, also doubted the effectiveness of the campaign.
"The campaign is welcome and may indeed help but the flow of foreign capital determines to a greater degree the value of a currency, not necessarily trade," Samuel said.
He said Russia enjoys massive trade surplus by importing less than they export but he pointed out that the Russian currency was among the worst performing. India on the other hand had a wonderful year in terms of currency appreciation but it imported more than it exported in 2015, the expert said.
"The real work will be making the Nigerian economy competitive to attract foreign investment. Nigeria's recent actions in term of predatory pricing in the electricity market leave little room for that," he said.
"If we are hoping to solve the Naira problem permanently, then a wonderful business environment powered by low operating cost and simplified tax regime is needed," he added.
