Inflation: Nigeria needs more transparent economy management – Duru
Given the worsening economic situation of things in the country, our reporters, CHIKAODI CHUKWULETA and BLESSING NNABUIFE, sought the opinion of people on citizens’ state of living, rate of inflation and other issues. A scholar, Dr Henry Duru of Mass Communication Department, Nnamdi Azikiwe University, Awka and Paul Mmaduekwe, a graduate of Ebonyi State University shared their views . Excerpts:
WHAT could have caused the high rate of inflation we are having today in the country?
I think the answer is straight forward. Ours is a monoculture economy, an economy that relies almost on oil only as our source of foreign exchange. We do not produce so much but we consume so much. When you compare what we import in this country to what we actually export, you will discover that we really export little. So, when you don’t export as much as you import, you will be having what is known as unfavorable balance of trade and unfavorable balance of payment and one of the implications of this is that your currency will remain weak; you will be experiencing inflation.
The reason for this is that we have not actually harnessed other sources of foreign exchange, other sources of national income, and other sources of production that is going to increase our export. We have not harnessed sufficiently, the industrial sector. We do not manufacture rather, we import most of our manufactured goods and because we haven’t fully obtained our manufacturing potential, we have continued to experience unfavorable balance of trade and unfavorable balance of payment.
Secondly, because of our almost so reliant on oil as a means of foreign exchange, we are always vulnerable in the global oil market. Whenever the oil market fall, we experience it very negatively here within our local economy and one of the consequences is the inflation as you can see with the depression which our economy went into in 2015 and last year, as a result of COVID- 19 pandemic which affected oil price in the international market.
We would have actually done better if we have other goods that we are exporting; if we have actually harnessed fully our industrial sector so that we have more to export apart from oil but because oil is our major source of income, when this global crises led to fall in oil prices, the effect was very negative in our nation.
So, we can say that the high rate of inflation that we are experiencing now is primarily as a result of our monoculture economy. The situation of oil in the international market has not been favorable for the past few years and because of that, the economy is being affected.
There has also been serious economy mismanagement on the part of the leaders. We have not really managed our economy optimally. Our culture of accountability has been very poor with corruption and embezzlement of public funds.
We have not been able to develop our infrastructure which is a key factor that will trigger drastic economy growth in this country. Economy mismanagement has also contributed to what we are experiencing today because with more efficient, more transparent economy management, even though we’ve international economy crises, the effects on our own local economy would have been better handled.
Fuel price moved from 97 Naira to 163 and there are incessant increments in power utility bills. Do you think it is a welcome development?
Definitely, it is not a welcome development because everything comes down to the poor masses. When the price of petrol goes up, it has statutory effects on other sectors of the economy because transportation relies on fuel, industries rely on fuel.
Even agricultural sector and the services sector all rely on fuel so when the fuel price goes up, it affects the cost of production in these other sectors making prices of goods and services to go up.
Concerning the hype in power bill, of course, you know that it is not actually helping the common masses.
We are not actually having the electricity that we require in this country and when people have to pay highly for what they have not consumed, it’s economic exploitation. I think the government must intervene here even though the power distributing companies have been complaining that the bills being charged do not reflect the true market situation in the power center and we also know that the government has been subsidising the electricity bills but I still think that the government and other players in the power sector must put their hands together to fashion out a very creative solution to this problem which is going to bring a better situation for all players.
Let the common masses not bear the brunt of the perennial mismanagement in the power sector; rather, let government and other players sincerely tackle this perennial problem so that we will have the power sector that we actually desire and deserve in this country.
Do you think establishment of modular refineries will help to boost refineries and distribution of petroleum product s in the country?
I believe that such modular refinery will help us because this refinery will help to increase local production. It’s a serious contradiction that we produce or we extract these petroleum products in our country; yet, we cannot process them so that they become finished goods and that has been part of the reason why we pay highly for petroleum products. So, I think by increasing the local refining capability, this modular refineries will help to bring about the more efficient oil industry where we are going to
Recently, petroleum tanker drivers threatened to withdraw their services due to failure by the federal government to provide safety values in all the petroleum trucks to protect lives and properties in case of road mishaps. What is your take on this?
The demand they are making should be looked into. The federal government, the drivers, the owners of the petroleum companies should come to a round table. It is not a one party rather, all parties that are involved should put heads together in other to fashion out a solution that will automatically address all the concerns and as well, result to win win situation for all the parties.
The service of this truck drivers are very crucial to the economy of this country, very crucial to the well being of all of us. It’s my take that all should join hands to bring out a workable solution that is going to address all the concerns.
However, I still want to point out the fact that when it comes, the problem of safety as regards to the trucks that convey the petroleum products across the country; the drivers need to caution themselves and they need to be cautioned because at times, you see them exhibiting one form of carelessness or the other. While on the road, some of them over speed, some of them drive in a way that amounts to recklessness and disregards for traffic rules, some of them drink before driving.
I think while they make their demands towards the federal government, they should also look inwards to see how they themselves might also have been responsible for some of the safety concerns regarding their operations on our roads.
Is there a way forward?
The way forward in this conflict between truck drivers and the government from my own perspective will be for the two sides to sit at a round table and dialogue. The services of the truck drivers are very essential to our socio-economic life and at the same time, other interests in the society also have to be respected. So, I think it is all about dialogue.
No one gets it all in a democracy. I wouldn’t know the complete details of what is causing this conflict but all I know is that whatever it is, dialogue will be the solution. When the activities of the truck drivers are disrupted, it affects all of us and at the same time, the drivers require that other interests in society who benefit from their duties are also in good terms with them.
In other words, the truck drivers don’t operate in isolation. They also require all of us so they have to cooperate with every process that is being given in bringing about a solution that will lead to a better situation, a solution that will be founded by dialogue so that at the end of the day, they benefit and every other interest in the society will also benefit.