By Ayo Akinfe
All this talk about the naira strengthening or weakening is just hot air as what we need is a weak currency that will make our manufactured exports cheaper.
[1] So the naira strengthens slightly against the dollar and Nigerians are celebrating. This just shows how economically illiterate we are as a people. To have a robust economy, Nigeria needs a weak currency that will make her exports competitive on global markets
[2] China has intentionally kept her yuan weak so she can dominate international trade. Chinese goods are much cheaper then their American or Japanese alternatives
[3] Just imagine how Nigeria would be thriving Witt her weak currency were we say the world’s number one manufacturer of motorcycles, bicycles, mobile phones, laptop computers and flatscreen TV sets
[4] In Nigeria today, manufacturing only accounts for 7% of gross domestic product (GDP). This for me is at the root of all our problems
[5] Do you know the global average with regards to manufacturing as a percentage of GDP is 30%. When we only have about one quarter of that, you can see why we are in trouble
[6] In China, manufacturing as a percentage of GDP is a whopping 40% and in developing economies similar to Nigeria such as Indonesia, Mexico, Iran and Brazil, it is 47%, 34.2%, 40.6% and 27.4% respectively
[7] Nigeria currently has a GDP of $550bn. If we can double the contribution of manufacturing as a percentage of GDP, I think we can easily boost that figure to $1trn
[8] No matter how many dollars you throw at the naira, any respite is temporary as ultimately, the strength of your economy is what really determines the value of your currency. We import so much that any vagaries in the global currency market automatically has an inflationary impact on Nigeria
[9] We have a lot to leverage on as we can use agriculture as a basis to manufacture agri-based products. We also have enough solid minerals to began manufacturing finished industrial goods like pipe rods, machine tools, ball bearings, etc. We also have enough oil and gas to become a major player in the global petro-chemicals industry
[10] We simply need to get Nigeria manufacturing to move on to the next rung of the ladder. I was hopeful that this recent gas-fired industrial park in Delta State will be the catalyst for the Nigerian industrial revolution. We need the margins from manufacturing to offset the volume of imports, to increase our export earnings from the current $50bn to around $100bn and to end the dependency on oil. In all the other sectors, the margins are simply not high enough to have a dramatic effect on the economy.
