By Nwigwe Alexandra
WHILE it is not proven that high employment rate has a direct or indirect correlation with trade surplus, it is worth nothing that many of these countries with high employment rates are generally realised as countries with successful economies. In fact, an article listing the top 10 economies in the world and runner-ups (Prableen Bajpai) included every single country named on the list documenting the 10 countries with the lowest unemployment rate (Adamson).
This is because a large factor in deciding these successful economies is GDP (Gross Domestic Product). A country’s GDP provides a measure of the total monetary value of all the goods and services it produces during a certain period of time, usually a year.
Countries with healthy economies usually have higher GDPs because they make more products and are said to be productive. A growing GDP shows a country is in the process of becoming more productive while a falling GDP signifies the opposite. If Nigeria wants a productive and successful economy, our GDP needs to grow. The only way to ensure our GDP grows is to encourage people to buy locally made products which in turn creates more jobs and ensures a higher standard of living for everyone.
Investing in Nigerian made products would help us out of financial crisis and boost foreign investments. Currently, Nigeria is in a period of recession. Recession is defined as a time “when businesses cease to expand, the GDP diminishes for two consecutive quarters, rate of unemployment rises, and housing prices decline.” (Morah).
While fixing housing prices is another matter entirely, the other three criteria are ones that can be rectified with an increase in nationally sourced products. A rise in locally made products would cause business expansion, and an increase in both GDP and employment. In short, investing in Nigerian-made products may be an imperial solution in getting Nigeria out of recession.
During the 2008-2009 period, many countries experienced recession. The ways they recovered from recession were varied but many decided upon an export-led recovery, including Spain and France. In France, the Economy Minister, Christine Lagarde said: “solid exports and strong public sector investment, fueled by government stimulus measures to counter the global economic crisis, were bolstering growth in France.” (CNN Money).
Similarly, Spain’s recovery from recession was another much-talked about story. Many reforms were put in place that had a hand in the recovery but the rise in exports was the main reason: “The growth in exports will help companies pay down debt faster, create more tax revenues for the government, and create more jobs inside Spain, each of which will eventually lead to higher domestic demand. (Wagner).”
While an increase in exports will boost economy, another major help would come in the form of foreign investments. In an article about the United States’ recovery from the 2007 recession, they praised their success in economic recovery but lamented the lack of investments which were said to be needed for lasting growth: “Acceleration of U.S. economic growth in 2010 is a welcome relief three years after the financial crisis plunged us into the Great Recession.
But continued weak investment poses concerns for sustaining growth momentum and revitalizing dynamism in the U.S. economy.” (Hersh). An increase in Nigerian-made products that can be sold as exports and a healthy economy are key steps to attracting more foreign investors and building a growing GDP. As of today, Nigeria is importing many products that we could just as easily make ourselves. If this continues, trade deficit is inevitable.
Nigeria is importing items like milk, rice, sugar, wheat, even palm oil, and so much more. Instead of spending such money on things we have the ability to produce, we should encourage more people to go into agriculture as a way of improving our economy. Nigeria is not helpless. We have the ability and sufficient labor to make these items, if only we put in the work, time, and energy needed. It is not a one-person effort but an entire country effort.
The countries in this essay are real. They, too, faced economic problems and they fixed those with reforms. Reforms mean change and change is necessary when the current way of doing things does not seem to be working. Nigeria needs to reform its way of thinking because if we do so we will see that made in Nigeria products are the vehicles for sustainable development.
If we look in the past, we would notice that countries fell into recession because they were too dependent on other nations. What happened when these nationsfell into political, financial, or other types of crisis? They were left stranded. To avoid this situation, Nigeria needs to become more independent. After all, if we do not know our history, we are doomed to repeat it.
Also, while corroborating the winning essay, President/CEO of Erisco Foods Limited, Chief Eric Umuofia, in his paper presentation on Made in Nigeria Products: The Only Vehicle for Sustainable Development made a case for local products. He, outlined eight hindrances towards sustainable development of made in Nigeria products.
He said: “Lack of access to enough foreign exchange, lack of appropriate policy against dumping and importation of substandard and cheap product from countries like China, India and other Asian countries, the role of bribery and corruption and the role of the multiple taxation by the three tiers of government, local, state and federal government are causative agents.
Others include, Lack of infrastructure, lack of practical policy by government to deliberately encourage the growth of indigenous manufacturers the way it is done in other countries, policy inconsistency and policy somersaults by succeeding government particularly at federal and state governments levels.” He lamented that Nigeria is the biggest tomato paste importer in the world with over USD1 billion per annum, urging Nigerians to have a change of attitude and stop the penchant for consumption of foreign made products.