THE EVIL TRIPLETS OF UNEMPLOYMENT, INFLATION AND BALANCE OF PAYMENT DEFICITS THAT BEDEVIL OUR COUNTRY:
By Bola Ahmed Tinubu.
In the 1980s unemployment was Nigeria’s most urgent economic problem. Nearly twenty percent of the workforce was without job. It was a typical case of cyclical unemployment as there was a general decline in the level of demand for goods and services, which led to decline in the employment of workers producing those goods and services.
The situation is not better today. Unemployment means waste. Men willing to work, who could produce valuable goods and services, are idle; the economy produces fewer goods and services than it is capable of producing. Unemployment also means hardship and low standards of living for those out of work and their families. Hence, in any civilized society the avoidance of mass unemployment is accepted as a primary objective of economic policy.
Another characteristic of the Nigerian economy since the 1980s has been a persistent rise in prices and money income, and this is called inflation. Inflation can be harmful in various ways. Firstly, prices rise for everyone, but some people are better placed than others to secure increases in their money incomes which offset the rise in the prices of goods and services they buy. Secondly, inflation makes it difficult to achieve a satisfactory balance of payments. As prices of our exports rise, it becomes harder to sell them in foreign markets. And as imports become cheap in comparison with goods produced at home, there is tendency to buy more of the imported goods as opposed to those produced at home. Nigeria is heavily dependent on imports. This country is importing much of her manufactured goods. Furthermore, some food, like sugar and rice, produced in other countries will be purchased in Nigeria here because they are more competitive and of better qualities than ours. All these goods and our imports of services have to be paid for in foreign currency which is earned by our exports to other countries. It is not however, considered sufficient to earn enough foreign currency from our exports to pay for our imports. The objective should be to earn more than that, so that we have a surplus, and I will see to it that Nigeria will be earning tremendously surplus foreign currency if I am elected as Nigeria’s president.
Thank you.
