By Oghifo Titi Emmanuella
Ranging from the highest quality of goods to the lowest, the Nigerian government spends billions of dollars importing all kinds of goods that can be efficiently produced locally, within the country. Nigeria operates a mixed economy which supposedly, should allow for mass production of goods and services at reasonably high qualities. Nevertheless, Nigeria’s economic policies has focused more on importation of goods rather than engaging in local production of goods. This poor strategy over the years has only been detrimental to the citizen’s welfare and the growth of the economy at large. The economy is currently facing serious challenges, especially from inflation, high cost of living, insecurity, unemployment, exchange rate instability and so on. Due to these factors, Nigeria is commonly referred to as a developing country. This article aims to show the shortcomings in the economic system and reasonable steps the government can take in other to curb these problems and attain a better and healthier economic system.
For decades, Nigeria’s economy has focused more on importing goods rather than locally producing them. Though it seemed cheaper in the short term (most factors of production are fixed) currently, there is a growing demand for more infrastructure and technological advancement needed to enhance local production. Purchasing a good today with no guarantee that in the next one month, the price of that goods remains the same is one alarming issue in the country. Inflation of prices has gotten so drastic to the point that the prices of goods are capable of increasing per hour. The prices of food, transportation, gas, cement, housing, among many others have risen so severely making life more difficult for the average citizen. Sadly,the standard of living of the citizens do not increase as the cost of living increases rather the citizens receive low salaries and wages, and are left to cope with the continuous inflation of prices.
One major challenge facing Nigeria’s economy is importation of goods and services. It is noteworthy that import dependence only weakens the Nigerian currency because, every imported goods leads to a higher demand for dollars. Regardless of the fact that the government impose importation subsidy on certain imported products, the fact remains that these goods are being sold internally at very high prices, and they can actually be produced locally and sold at lower prices. Data analysis from the Central Bank of Nigeria shows that Nigeria spent $40.97 billion on imports in 2024 and $2.34 billion on food imports alone in 2025.
Take a walk through any market in Nigeria and you’ll find out that 90% of the manufactured goods are foreign made. A large country like Nigeria ought to have a good number of well established and functional companies capable of not just producing domestic goods, but also exporting goods and services. But as the case is, the only remarkable organizations are ; Banks, Telecommunications and a few other organisations. The point remains that, excess importation of goods into the country only leads to increased government expenditure, which consequently leads to economic instability.
Furthermore, another challenge Nigeria faces is the problem of insecurity. One of the major security outbreak in Nigeria is banditry and farmer-herder conflicts. There is a high rate of bandit invasion in various communities in Nigeria. These bandits camp in farms and bushes and they attack farmers, taking them hostage and asking for a ransom for their release. If this condition is not met, they go ahead to kill the innocent striving farmers leaving their families bereaved. Additionally, as the Nigerian populace increases, land availability has become scarce. Some flock herders, due to land scarcity take their flock to already cultivated farmlands where they graze upon the farm produce causing the farmers to suffer great loss. A number of conflicts like this arise in rural area where little or no attention is given by the government. Moreover, the few farmers who are not victims of such circumstances are left to sell their farm produce at a relatively high price making it difficult for the masses to cope.
Another key issue facing Nigeria’s economy is weak infrastructural facilities. Nigeria performs poorly when it comes to maintaining infrastructures. In most rural areas, a road can be constructed today and remain so for ages without any form of maintenance, faulty street lights are hardly replaced, government owned institutions like schools and healthcare centres are being neglected. Even when money is allocated for maintenance of these institutions, it is being embezzled by officials due to lack of proper monitoring by government agencies. It is important to note that there are four government refinery units which are all non-functional : the Port Harcourt Refinery (actually two refining units at one complex) which has undergone rehabilitation and has restarted in phases but it is not yet operating in full capacity, the Warri Refinery which has faced repeated shutdown and repairs, and the Kaduna Refinery which has remained inactive for years.
However, one private owned Refinery exists which is the Dangote Refinery and it has recently begun operating but not yet at full capacity.. This is to say that Nigeria is not lacking in infrastructural facilities, but in adequate maintenance of its infrastructures.
One other debatable issue is the over dependence on crude oil. It is true that Nigeria is richly endowed with crude oil as one of its natural resources but excessive reliance on it has created an impediment to the development of other important economic sectors of the country such as agriculture, manufacturing, mining of solid minerals and so on. At a time, agriculture was one of Nigeria’s strongest sectors which contributed significantly to exports. Overtime, excessive focus on crude oil reduced the investments in other sectors, limiting diversification and job creation.
It is however pertinent to note that, over the years the government has made various efforts to improve the economy but their efforts have been termed insignificant because it has not brought much change. As the economy develops, there is a growing demand for more infrastructures and technological advancements, creating a broad spectrum of opportunities for businesses across the country.
The Nigerian government can simply tap into the world market, giving global manufacturing companies access to benefit from Nigeria’s strategic location and regional influence which makes it the ideal regional export hub to scale operations to meet global demands making a great input to Nigeria’s economy.
Oghifo Titi Emmanuella is a Public Affairs Analyst.
In essence, the government should shift policy focus from subsidizing imports to promoting and protecting local products. Moreso, when the cost of living outpaces the cost of earning, economic instability is likely to arise. The goal of every accountable government is to improve the standard of living of its citizens, which could be achieved through implementation os sustainable economic policies such as ; building industrial capacity, creating mass employment, enhanced economic sovereignty, improved infrastructures. With this, the cost of living will reduce which the standard of living increases.
The government can also encourage infant industries by patronising them thereby encouraging public interest. Though Nigeria faces significant economic challenges, proper and effective leadership can place the country on the path to sustainable growth and development.
Oghifo Titi Emmanuella is a Public Affairs Analyst.
