A renowned Economist, Prof. Ken Ife, said the import dependence nature of the Nigerian economy is a major challenge fueling inflation and weak currency.
Ife, a member of the Governing Council, Ministry of Finance Incorporated (MOFI), said this in an interview in Abuja.
According to him, not much has changed in terms of the structure of the economy over the years.
He said that Nigeria was part of an international division of labour, which confines it to the provision of raw materials and consumer of finished products.
“Any attempt to add value to our exports is usually met with stiff resistance.
“When a country is import dependent, it becomes so vulnerable to any external, global headwind, and it affects the economy
The mortgage crisis in America, and the Russian-Ukrainian war affected us because we are import-dependent.
“What we have is imported inflation,” he said.
He said the importation section required four billion dollars monthly to import goods and services into the country.
“But because we have excess liquidity in the system, speculators in the system are simply keeping the dollar as a store of value.
“They are now betting on the Naira, and the forward bet on the Naira is that it will continue to go down.
“Everybody keeps holding the dollar and using the dollar to trade with the expectation that the Naira will continue to fall.
“If the expectation is that the Naira will appreciate, people will quickly sell dollars,’’ he said.
Ife said that excess liquidity was also a challenge to the Nigerian economy.
He said that people with so much Naira go looking for dollars.
