INFLATION IN NIGERIA; A BRIEF HISTORY

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One of the adverts effect of bad governance in Nigeria today is INFLATION It has ravaged our economy so badly that the nation has gone from recession to depression. Inflation which is normally caused by the increase in demand for a commodity has now affected even the commodities that are not in high demand.

HOW IT RECENTLY STARTED

Though a lot of bad governance contributed to the inflation we are suffering today, from the way it started in 2012, it was never meant to bring the country into chaos, rather it started as a means by the former president Goodluck Jonathan to bring a little bit of balance to other aspects of Nigeria economy by removing some percentage of government subsidy from the petroleum Industry and invest in other aspects like agriculture. His strategy was highly rejected by many not minding the intent it came from, and today we see its adverse effects as he couldn't stay in office long enough to actualize his goal.

Crude products being Nigeria's major source of revenue, as well as the major source of exchange in the trade market is one of the major cause of the current inflation in the country. The former president Goodluck Jonathan knew if Nigeria continued to depend on crude as one of the very few exportable commodities, it wouldn't be long before the country suffers depression. Ideally, if the strategy is to invest in agriculture and add it as a backup (at least) exportable commodity the value of the Naira in the trade market would be of greater value.

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Today what we see is the failure of the current government to diversify tradable commodities leaving Nigeria at the mercy of crude oil that has greatly inflated the price of goods and services. It's sad to note that even though Nigeria exports crude oil, the crude products are imported. This means that...

• Nigeria would buy crude products in Dollars giving them more value and devaluing the Naira

• Nigeria would have to sell crude products back to oil co-operation (Petrol/gas stations)with higher interest

• These cooperations sell to the masses at an increasable rate, so they can make a profit.

• Businesses who require petrol to function (due to the power failure in the country) which compromises 98% of businesses in Nigeria will have to buy at a high price and add it to their expenses.

• These businesses would need to turn the expenses they have incurred into profit else they suffer loss, so they add to the normal amount they normally sell to make back their profit.

• Technically everyone is trying to make profit by adding to the normal price of things that resulted from the importation of crude products, and the circle goes on and on.

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IT AFFECTS US ALL

Now everyone is affected by the decision to continue importing a product that we naturally produce in its raw form. This brings me to the question...

WHERE IS THE HIGH DEMAND LEADING TO INFLATION COMING FROM?

Since so many countries associates with the united states in the international trade market, it's only normal for demands to be high and supply to be low... Nigeria which is among the queue of demands now put its citizens at the mercy of the dollar since the rate at which we sell is nearly insignificant.

WHAT CAN WE DO?

• Nigeria would need to move from being a consumer nation to being a productive nation by doing the following.

• Accept and start using Nigeria-made products

• Thereby allowing Nigerian producers to improve

• Improve to the point of having something tradable in the International market.

• We sell at our own price and no longer have to depend on the dollar falling for our survival.

The common man suffers this the most because we depend on buying things that are available in a rather low quantity thereby dancing to the tone of the market... Seeing that we as the masses can't just provide a solution to this concurrent problem we can try to manage it in the best way possible. Here's what I do to manage my situation as a consumer.

BUU FOODSTUFFS IN BULK BEFORE LUXURY

No matter what I'm buying, food is always a necessity in my spending, I will rather use 60% of what I earn to get things that will sustain me before going for anything I like.

SPEND ON THINGS OF NEEDS AND VALUE

Why go to the boutique and buy a red shoe to fit my clothing when I know full well I have only one red set of clothing. I will instead buy a black shoe that will fit into almost all my clothing so I know I don't need to buy a shoe for a while. I will also ensure I buy a Very quality one affordable for me to make sure I don't start spending on maintenance or going for another shoe in a short while.

MANAGE WHAT I HAVE

This has helped me a great deal, with the rate at which the prices of things increase by the day, managing what I have is necessary so I don't have to purchase a new one at a higher price. I might not have much, but I try as much as possible to make do with what I have at every point in time.

Thanks for stopping by my blog today until next time.