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Nigerian economy weighed down by inflation

14/08/2020
Source : africanews.com
Categories: Economy/Forex

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In this market in Abuja, in the heart of Nigeria's capital, the stalls are filled with goods that are slow to find buyers.

Daily food products have not escaped the inflation that has affected the country for ten consecutive months now.

For analysts, everything comes from the increase in demand for dollars.

Rather than being influenced by the production of goods and services, inflation is determined more by politics and the injection of liquidity by the monetary authority.

Professor Godwin Owoh, an economic analyst, offers an explanation:

"What is really happening in Nigeria today is a hyper dollarization of the country's economy. Everybody wants to store all their income in dollars, that's why, while the airports are closed, the restrictions on visas , the demand for dollars is multiplying. What are these dollars for? It just tells you that there is a mad rush to store dollar values. This is what is killing the Naira and will continue to kill the Naira until what we decide to fix it".

What remedy to get Nigeria out of inflation? Reduce dependence on imports and increase export opportunities, as goods produced in Nigeria will involve local circulation of money.

Godwin U. Ukah, economic analyst, tells us more:

"We have to produce and produce and produce, encourage the manufacturers, give the loans that are below the normal bank charges. In the United States, the interest rates sometimes go down to 3% to allow you, as a businessman, to borrow and create a factory. When you create a factory that employs so many people, what do they produce? They produce something that we are going to use here and then they export some of it, the excess ".

Fluctuating prices and rising unemployment and poverty rates are signs of a struggling economy, but factors such as insecurity and corruption have also had a major influence on this faltering economy.

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