The Nigerian economy is one of the biggest examples of where finance and reality meet. As an entrepreneur, investor, or even an ordinary citizen, you cannot separate your daily life from what is happening in the Nigerian economy.
Every year, we witness the Naira rising and falling against the US dollar. This constant movement affects almost everyone, especially businesses involved in import and export. It also affects the prices of food, fuel, electronics, transportation, and many other goods and services.
Over time, I have personally observed some of the reasons why the value of the Naira keeps changing. These are my observations.
1. Personal Interest Over National Interest
I have traced the root of many of these economic challenges, and I believe they are not only caused by market forces as many economists explain. In my opinion, many of the problems are also driven by the personal and selfish interests of some stakeholders who influence government policies and regulations.
Some policies are designed to solve immediate political problems instead of building a strong economy for future generations. As long as leaders focus on short-term gains rather than long-term development, the economy will continue to experience instability.
2. The Election Effect
One thing I have noticed over the years is that during election periods, the Naira often appears to become stronger against the dollar. After elections, however, the exchange rate usually begins to rise again, creating hardship for importers, exporters, businesses, and ordinary consumers.
This raises important questions.
Why does this happen? Why do we often see improvements around election periods but struggle to maintain them afterwards? Is it simply for political campaigns and public validation, or is there something deeper happening behind the scenes?
These are questions every Nigerian should continue asking.
3. Political and Economic Instability
Another major challenge is the lack of continuity in government policies.
Every new administration often prefers to abandon the projects and economic strategies of the previous government. Instead of improving existing policies, they introduce completely new reforms and replace key personnel.
Without long-term economic planning and policy continuity, investors lose confidence, businesses struggle to plan ahead, and the economy becomes unstable. This instability eventually affects the value of the Naira.
4. Lack of Internal Production
Nigeria is blessed with enormous natural resources, yet our level of local production remains very low.
No country can build a stable economy when it depends heavily on imported goods and services. Since international trade is largely conducted in US dollars, our high demand for imports increases the demand for foreign currency, putting more pressure on the Naira.
If we truly want a stronger currency, we must prioritize local industries, manufacturing, agriculture, technology, and value-added production instead of depending heavily on imports.
5. Unqualified Personnel and Corruption
Many people define corruption in different ways.
To me, corruption also includes placing unqualified individuals in positions where they make critical economic decisions simply because they are political loyalists.
When competence is ignored, poor policies become common. Instead of creating strategies that will strengthen the economy for future generations, decisions are often made to satisfy immediate personal or political interests.
This has remained one of Nigeria’s greatest economic challenges.
What Economists Say
Many economists will rightly argue that the movement of the Naira is influenced by factors such as supply and demand for foreign exchange, oil revenue, foreign reserves, import dependency, inflation, monetary policy, interest rates set by the Central Bank of Nigeria (CBN), and market speculation.
I do not disagree with these explanations because they are important economic factors.
However, I believe we should ask ourselves a deeper question.
Without strong internal production, industrial development, competent leadership, sound economic policies, and long-term planning, can Nigeria truly build a strong and stable economy?
For many years, a large portion of Nigeria’s oil industry has been managed by foreign companies. Although the establishment of the Dangote Refinery is a significant step forward, the country has struggled with local production for decades.
Even where production exists, poor monitoring, weak institutions, and corruption often reduce the quality of locally produced goods. As a result, many Nigerians still prefer imported products.
We need to understand where our economic problems truly come from because our financial reality has a root cause.
If we fail to learn, understand, and make the necessary adjustments, the decline in our purchasing power will continue to affect our everyday lives.
Finance is not just about making money.
It is about understanding reality.
There is still more to reveal.