Historically, findings show that Nigeria had experienced seven economic recessions with the current downturn making it eight in 50 years, according to the World Bank Report.
Indeed, there is no economy around the world that is immune to recession. Furthermore, National Bureau of Economic Research (NBER), a firm known for monitoring recessions in the United States, also reported that the U.S., which is world’s largest economy, had been through recession 49 times in 240 years. To this end, Nigeria had at least one recession in the average of seven years, while U.S. had at least one in five years.
Comparatively, in the past decade, Japan, Brazil, Russia, U.K. and South Africa had experienced economic decline one time or the other. The CBN Governor, Godwin Emefiele’s message, also called Emefiile’s “Tooth-pick model,” is recommended antidote for recession.
In his submissions, he said that Nigerians in year 2014 and 2015 reportedly spent $2.71 and $1.32 million, respectively, importing tooth-pick into the country. The high yielding plant used in producing this is called “Bamboo.”
Bamboo naturally grows in the forests along the river plains of River Niger, Benue and their numerous tributaries. Like most African countries, Nigeria is blessed with 1.7 million hectares of land, with its native variety making it abundant in valuable quantities.
The machine needed to produce tooth-pick is less than $50,000. Now, by the forex restriction on the importation of tooth-pick, we now have tooth-picks being produced at Sango Ota, in Ogun State, from Bamboo. That company has created jobs for Nigerians. In addition, yellow Nylon at retail shops is no longer imported from South Africa.
Statistics indicate that in 1970, Nigeria’s economy recorded growth of 25%, which was highest in the country’s history. The first economic meltdown was recorded during the civil war, between 1967 and 1970. However, there was economic recovery at the end of the civil war.
Nonetheless, the rise in oil prices from 1970 to 1974 gradually weaned Nigeria off its dependence on agriculture and other farming production.
In 1975, oil prices dropped to $35.5 per barrel up to 1980. The country mismanaged its years of boom. The only option needed to save Nigeria was the industrialization policies of the CBN.
Some Northern States were known for the commercial production of cotton, a primary source of raw materials for textiles industries. However, the collapse of the Northern textile industries paved the way for total reliance on foreign textiles in a country where the states like Kano and Kaduna, among others, were the leading textile hubs in Africa.
Nigeria has the biggest textile market in Africa. The question arises as, to what hinders the country from hosting the biggest textile manufacturing industry on the continent?
On the report of Dangote Group that only 5% of clothes worn by Nigerians are produced in Nigeria, this made the CBN place a ban on importation of such products and access to foreign exchange from CBN.
In conclusion, the only option needed to save Nigeria is the industrialization policies of the Central Bank of Nigeria.
Refs/Source: Emefiele’s tooth-pick model, CBN.
National Bureau of Economic Research (NBER) and IBRD Economic Reports.
Compiled by: Ojurongbe Ayodele Julius (Mr)
Culled from The Badography publication of July, 2017.