Grow the naira

HR-CobblerBuying local goods in Nigeria is one way to increase the value of the naira. But there are two things that need to happen first, explains Nkem Ifejika

The earliest reference I can find to a now famous quote about being British is from 2005, from a reader’s letter in The Daily Telegraph newspaper: “Being British is about driving in a German car to an Irish pub for a Belgian beer, then travelling home, grabbing an Indian curry or a Turkish kebab on the way, to sit on Swedish furniture and watch American shows on a Japanese TV.” The quote is meant to be an observation about multiculturalism in Britain, but on close inspection it’s also about globalisation. Ships and aeroplanes crisscross the globe dropping off and picking up goods. Trade is what makes the world go round.

Africa is no different: global brands have beaten a path in search of new markets. However, an imbalance of trade is not a good thing and, for African economies, it’s been devastating. Relying on one commodity for the majority of foreign exchange earnings and a scarcity of foreign exchange being made available by the central bank are just two of the reasons the naira is losing its value.

However, the rationale is that if a country that imports as much as Nigeria can buy local instead of foreign, there’d be less need for scarce forex, as purchases would be in naira. Which is why the hashtag ‘BuyNaijaToGrowTheNaira’ has been gaining traction on Twitter including with the populist opposition politician Ben Murray-Bruce.

Being able to choose between foreign and local products is the preserve of the elite, and they’re the most vocal about it. You can buy what you like only when you have a choice, especially if the option is to choose a more expensive local product. The poor man or woman on the street doesn’t have that option – they go for what they can afford, which is often the cheapest (and often imported) product. Many products are not manufactured at home because they cost too much and it doesn’t make business sense.

There are also statistics that suggest the problem with a country like Nigeria isn’t too many imports, but too few exports, particularly when compared to the size of its GDP. And simple anecdotes can bear this out. The very poorest people aren’t eating foreign breakfast cereals, they’re eating matoke, pap, or acamu. Nigeria imports toothpicks, but I reckon most people in villages will use chewing sticks if need be.

Where there’s clearly room for improvement is the reputation of local African products. ‘Made in Aba’ (the trading hub in southeast Nigeria) is a term often used disparagingly. So much so that when shoes and clothes are being made, the tailors also make ‘made in Italy’ labels. They fear that people will refuse to buy them if they’re thought to be Nigeria made.
Two things need to happen: the standards of local products need to keep improving, and the stigma attached to them needs to go. But you can’t have one without the other.