There is chaos in Nigeria, apparently because there is a cash shortage! Lack of actual cash led to the riots in the cities of Ibadan, Benin, and Delta State.
The reason for this banknote shortage is the country’s Central Bank’s decision to replace old notes with new ones. This has forced banks to restrict customer access to cash and some businesses to reject old Naira currency notes.
In the process, people’s frustrations have led to unrest, which has, in turn has led to interruption of businesses locally. So, in addition to the usual poverty levels in Nigeria, people are now forced to contend with lost business and lack of cash for daily use.
How Economic & Social Tensions Built up in Nigeria
The economic and social crisis currently in Nigeria requires immediate attention. Despite being the largest oil producer in Africa, the nation has struggled to maintain its oil refineries, and this inadequacy has led to a crisis within the oil sector.
In Nigeria domestic oil supplies have been inadequate, and sadly the country has had to import fuel. This state of affairs has negatively impacted the economy. The GDP of the nation exceeds that of all other West African nations put together, yet due to over-reliance on oil, the nation is susceptible to global changes in oil prices.
In addition to the challenges already mentioned, Nigeria’s population is still growing, and it is anticipated to reach 375 million by 2050. This means there will be greater pressure on the government to provide jobs and other avenues for its citizens to earn a living. Even the infrastructure as it is today can barely support the growing population.
How Nigeria should Mitigate Future Crisis
To address these difficulties, the Nigerian government must diversify its economic activities. The government must establish a stable business climate, increase financial access, and promote investment. Nigeria has a lot of room to grow in the areas of industry, agriculture, and technology, and with the correct focus the country could manage more job opportunities and boost its GDP.
Nigeria must also readjust its investment focus, so that significant portions go to technology, education, and infrastructure.
It is also important that the government worked closely with the private sector,including international organizations, if it is to achieve its goals. It also needs to create an environment suitable for foreign investment; one that promotes innovation and provides opportunities for local citizens.
Corruption is another thorny issue that Nigeria has to address. Just as in many other underdeveloped countries, corruption undermines economic growth and contributes to social unrest.
The issues Nigeria is facing call for quick action. A comprehensive approach is needed to deal with the interconnected issues of inoperable oil refineries, cash shortages, rising poverty, and social instability.
Hopefully, the government will prioritize economic diversification, development of infrastructure, and education, even as it embarks on fostering a stable economic environment. If Nigeria gets on the right track, it has immense potential to play an enviable role on the global economic scene.