The main cause of the problem is because our government failed to make the country to be less relying on foreign products. We are importing goods more than necessary. In technology we lag behind and the foreign nations are innovating new products that we continue to import.
And the most devastating part of this is when I heard that most of our exports are being bought from us with the equivalent of naira, whereas those imports that we bring into the country are bought at the dollar rate. I think that was what I heard from one of these interviews I've been listening to about all these economic crises in the country, from a seasoned lawyer.
Now, I can't imagine if this is really true because what this means is, if we are taking out our exports and allowing those buying it from us to pay in naira equivalent, but then when we come to buy from them, they sell it to us in dollar equivalent, that means we are suppressing our currency. Because what that means is, there would be more demand for the local currency by these buyers that are coming into the country, which will only weaken the local currency.
Then, what do you expect about inflation when, at the end of the day, we buy those products in dollars? So, if we are importing and we are buying in dollars, what that means is there are a lot of people looking for that dollar currency, which will amount to them holding it. And that is why you find situations whereby even people who would not really need dollars are hunting for it, and they can easily get it from the BDCs.
Federal government needs to tackle the reasons we rely on importing goods. We need ways they can encourage and create a good environment of increasing productivity in Nigeria. Electricity is bad and has gotten worse again during this dry season as usual. They should start by providing constant electricity. Many companies left the country because of bad electricity. There is much more to discuss about this than Electricity.
Exactly, if the Federal Government aims to empower our local market, then we must also have stable electricity in the country. According to many scholars of the economy, it is said that MSMEs (Micro, Small, and Medium Enterprises) contribute more than 40% of the revenue generated by the country's GDP, which is about $200 billion.
Now, imagine if we can digitize some of these MSMEs, it will boost our economy even more because the country will provide an ease of doing business to those business owners. But when faced with a situation where even basic electricity is not guaranteed, what can we expect of the economy of the country? It is definitely going to be a quagmire, as it is right now.
So the government are not solving the primary reasons but going for secondary reasons. They wanted to control the parallel market and which they have just achieved like the CBN rate. Exchanges and others are restricting people that have ads from selling if not following the rules of the CBN, making the CBN to be indirectly using the exchanges to control the P2P price. Naira has increased in price now, but things in the market are still expensive and not reducing in price at all.
Now, you can imagine the lack of priority in the government's policies or activities by attempting to ban P2P services in Binance and other cryptocurrency activities. It was alleged that over 20 billion worth of transactions moved through that window in Binance alone, and the country is not able to monitor these transactions. It's quite unfortunate, really.
I think we should be proud of what we are against, proud in the sense that the country should be able to properly regulate and monitor these activities to boost the economy further and make it easier for people to invest through these platforms. When you can easily access transactions, especially foreign exchange, it becomes easier to do business in those localities. Many more developed countries are properly regulating these exchanges, and it should be relatively easier for the government to control or regulate activities on these online platforms since we already have regulatory agencies like NIBSS responsible for this.