Currently, Nigeria is grappling with significant socio-economic challenges and instability due to prevailing economic uncertainties. The situation notably worsened on May 29, 2023, when President Bola Tinubu’s administration, upon taking office, announced the cessation of the fuel subsidy and the unification of the exchange rate.
This decision has since influenced various aspects of daily life, notably causing a surge in the price of Premium Motor Spirit (PMS). The resultant effect has been an increase in transportation costs and food prices. Despite the discomfort, these reforms are viewed as crucial steps towards achieving a sustainable economy.
Over the past eight months, Nigerians have been questioning whether these government reforms are aimed at economic improvement or further detriment. Previous governments have largely failed to diversify the economy effectively, a critical step for a country considered to be Africa’s largest economy yet teetering on the brink of collapse due to economic mismanagement.
Today, we face multifaceted economic challenges and widespread dissatisfaction among the populace, marked by rising food and transportation costs, inconsistent power supply, and diminishing purchasing power. These issues, if unaddressed, could potentially lead to unrest and economic turmoil.
However, it’s important to recognize that economic difficulties are not unique to Nigeria; they are a worldwide issue. Many developed and developing economies, including the United Kingdom, Japan, South Africa, Kenya, and Ghana, are experiencing economic downturns.
The Naira has significantly depreciated, currently trading at N1,900/$1, in part due to unscrupulous activities in the foreign exchange market facilitated by platforms like Binance and other cryptocurrency services. Despite efforts by fiscal and monetary authorities to maintain its value, these actions have led to its drastic fall.
The government’s reforms, though challenging, are seen as long overdue. If earlier administrations had gradually implemented similar measures, the current economic predicament might have been mitigated. The reality is that Nigerians have become overly reliant on subsidies, which are unsustainable for long-term welfare.
The devaluation of the Naira can be attributed to manipulative financial elites opposing government efforts. This situation worsened following statements by Mr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria about the undervaluation of the Naira and forthcoming corrective policies, which only intensified speculative activities.
Furthermore, the role of cryptocurrency trading, especially after the Central Bank of Nigeria (CBN) lifted its ban in 2023, has been controversial. While the ban aimed to curb money laundering and terrorism financing, its removal sought to encourage regulated crypto use. Despite this, certain crypto entities like Binance have been accused of exacerbating forex market manipulation and engaging in illegal activities, undermining national security.
The CBN’s revised stance aims to protect the financial ecosystem and investors from the risks posed by unregulated crypto markets, known for their manipulative practices. It is crucial therefore to regulate the growth of the crypto industry to prevent potential threats to national security.
In conclusion, the activities of these manipulative entities pose a significant threat to the Nigerian economy, with dire consequences for all citizens. It is imperative for security agencies and regulatory bodies to take decisive action against such disruptive forces to safeguard the economy and the well-being of the Nigerian people.
Chisom Adindu writes from Umuahia, Abia State.
