By Akoma Chinweoke

Dr. Michael Aderohunmu,  is  the President Nigeria- Malaysia Business Council. In this encounter,  he  shares his thoughts  on the burden of forex restriction policy,{ US Dollar] as well as it’s harmful effects on Nigeria’s economy. Excerpts:

How in your view can the country attain  rapid economic transformation?

•Dr. Michael Aderohunmu

The recent quest for political and economic change in Nigeria, call for a re-thinking. I believe that the national economy will achieve rapid transformation when the people of Nigeria will have good knowledge of economic strength and political weakness of the country in which they live. In order words, until proper analysis and in-depth understanding of the impact of foreign exchange on the daily lives of Nigerians are done, including  urban and rural poor as well as  its consequence on Nigeria’s economic environment generally.

And until the national political consciousness is awakening to redress the situation with serious commitment and actions to place the country in the centre of polity,( like Malaysia did ), then the process of structural economic change and transformation had just begun.

The leaders of this great country must accept the evidence of global economic change and make concerted efforts with proper assessment of ways these changes effects Nigeria.  In 2014 according to the World Bank, Nigeria through the re-basing  of its economy saw the size and structure of the economy, surge past South Africa to become Africa’s largest economy, with a rebased GDP estimate of $454 billion in 2012 and $510 billion in 2013. In actual fact, the Nigerian economy is transforming from an agrarian economy to a tertiary service economy, without going through the intermediate stage of industrialisation.

Why?

This is because it lacks basic and necessary infrastructure for what can be considered as a “take off stage” to become   industrialised nation.

In spite of this, the non availability or the shortfall of US$ exposed the vulnerability and  fragile nature of our country’s economic structure vis-a-vis it’s model of economic development, and the consequence of mono-product (hydrocarbon rent )as a major source of (forex) revenue, accountable for more than 70 percent of income flow.

In reality, this is the   hidden danger under the structure of African’s largest   economy facing with the largest threat  of the recent time.

Where did we go wrong?

The original concept of the Import Substitution Strategy from the Latin America school of Structuralists and its true policy application  was that government economic development strategy; must emphasize replacement of some agricultural or industrial imports, to encourage local production for local consumption. Import substitutes are meant to generate employment, in order to reduce foreign exchange demand , stimulate innovation and make the country self-reliant in critical areas such as food security and technology.

Looking at the genesis of this disarticulated strategy of national economic development as we follow the trajectory from yesterday, we observed change of route from the strategy of national economic development that “Moved from Import Substitution to Import Orientation”. The reality is that This is a typical transition, the so-called ‘‘tertiarisation” and “service oriented economy’’that has so far failed to deliver quality of good livelihood to growing population, poses challenges for the sustainability and inclusiveness of economic growth in Nigeria.