Our Greed And Imports Are The Reasons For Our Dwindling Economy...

Today I decided to eat noddles with eggs.
Sounds yummy right? It is. But I was shock to realize that the price for a single egg now cost 40 Naira = 20cents. Yeah!!!
Then a pack of 40grams of noddles cost 50 Naria = 25cents.
After being puzzled I remembered "this was Nigeria, where anything is possible". So I bought it cos I was so hungry.

After satisfying my stomach I then pondered and recalled; About 15 years ago, eggs cost  10-15 Naira each and the same noddles cost 20-25 Naira.

I drowned myself in thoughts; Then I understood why Nigeria's inflation rate keeps rising.


According to Wikipedia:

In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.



When the price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.

A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index, usually the consumer price index, over time.

I researched further and this brought me to the question: What Causes Inflation?

There is no one cause of inflation that is universally agreed upon, but at least two theories are generally accepted, there are:

Demand-Pull Inflation - This theory can be summarized as "too much money chasing too few goods". In other words, if demand is growing faster than supply, prices will increase. This usually occurs in growing economies.

Cost-Push Inflation - When companies' costs go up, they need to increase prices to maintain their profit margins. Increased costs can include things such as wages, taxes, or increased costs of imports.


After reading this, it became glaring why our currency is so inflated. I discovered  two major reason to why our currency is so poor, despite the fact our economy is growing strongly. 
They are:

• Greed 
• Importation.

Greed: As it relates to Nigeria; It's the intense and selfish desire for wealth and power.
These desire drives people to hike prices of commodities so they can gain.

Example: Two stores at close proximity, Store A will sell eggs at 30 Naira each, while Store B sells at 50 Naira each. Nothing is done about this. When Store A finds out that people buy the same eggs from Sore B at 50 Naira each, Store A then inflates it's own price too. 

Subsequently, when the demand for eggs is high and the commodity low the price super hikes by over 50%, selling at about 70 Naira. 

Importation: This is the act where by goods are brought into a jurisdiction, especially across a national border, from an external source. An import in the receiving country is an importer while the sending country is the exporter.

Nigeria is 100% an importer. We import everything. Ranging from technology, foodstuffs and even clothing.
This is not so bad compared to the inflated cost of imported goods.

Example: A retailer imports an Iphone at the cost of $600 = 94,800 Naira each (then exchange rate of 158naira - $1), this importer then sells each at the cost of $800 = 134,400 Naira. Adding over $200 to the purchased price.

Conclusion

• Despite the fact that Nigeria is a blessed nation with vast and fertile lands we lack agricultural goods...  Why? Because we have a Ministry of Agriculture, BDN (Busy Doing Nothing). They Claim to give loans and funds to farmers. All claims, cos we see no change.

 

• There is no fix price for goods or a particular product in Nigeria. 

• We have no adequate price regulating body. "Anybody, anywhere, anytime can inflate prices of goods, commodity and services".

• Our custom officials are not helping matters. How? Most importers hike prices because they pay money to custom officials so that their goods can be cleared and quickly delivered.

The Real Nigeria...