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Victor Ejechi: The relationship between economics and politics in Nigeria

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The relationship between economics and politics is not far-fetched as one influences the other, and Nigeria is no different. While Economics is concerned with the study of demand, supply, equilibrium and how insatiable human wants are met daily.  Politics, on the other hand, is the theory and practice of influencing people through the exercise of power which can either be in governments, elections or political parties.

The government is an economic unit and the connection between politics and economics is in government’s creation of an enabling business environment or government control of money supply either through fiscal policies or monetary policies to spur the satisfaction of its citizenry demand for goods and services. The quality of decision making in government, directly and indirectly, controls how other economic units such as businesses and households make economic decisions.

In Nigeria, nepotism and corruption by the people in government and partisan behaviours of supposed independent monetary institutions in the country have facilitated biased monetary directives and inept economic policies. The Nigerian political class over the years is said to have amassed wealth to themselves by influencing and sponsoring monetary directives and economic policies to favour personal agendas.

Meanwhile, there are many examples of how the reality of politics in Nigeria has influenced major economic decisions. In August of 2019, Nigeria’s president, President Buhari ordered the closure of the country’s land borders, making it difficult for importation and other economic activities to take place. This policy according to government is an effort to curb smuggling and associated corruption while facilitating the growth of the country’s agricultural sector.

As at August 2019 when the government shut the borders, the inflation rate was at 13.17% and PMS was sold at N145.48 naira. On opening the borders, Inflation jumped to 18.30% and PMS came to N167.27 naira. What then is the importance or the usefulness of the border closure in the first place?

If we look away from the socio-economic and political problems created by the border closure, we are not only faced with the damages that the policy will cause on our economy, we also became enemies with the sub-region. A country like Ghana, for instance, felt bad about the closure as Nigeria’s closest trading partner in the region, and this has stirred a certain level of subtle and overt attacks on the diplomatic buildings and harassment of Nigerian citizens doing legitimate businesses in Ghana.

Another example would be the ban of foreign exchange supply for the importation of certain goods and services, which the government explained the ban to the conservation of scarce foreign exchange for key imports and exportation while stemming the demand for dollars in other to improve the value of the Nigerian currency.

However, it’s of popular opinion that the current APC lead government in Nigeria as exploited the polity in the country to a devastating effect putting the Nigerian economy in a lot of economic mishaps which includes high inflation, high level of unemployment, and increased hardship for the ordinary man of the streets. The economic situation in Nigeria is well captured in the economic statistics and indexes used in measuring good economic performance, which clearly shows the country’s economy is at the wrong end of the stick.

In Nigeria, some of the negative effects of politics are evident in a manner which current Nigerian government has watered serious economic concerns and has consistently refused to recognize the precarious state of its people. In a bid to save good face and remain popular with the electorate.

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Victor Ejechi is the Media and Communications Lead at StatiSense Consult.


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