Commodification Of The Naira Explained: A Cassava Solution?

The Nigerian economy has been facing several challenges, including inflation, unemployment, and a devalued currency.

Recently, a suggestion was made to use cassava-based products for the commodification of the Naira.

The idea is to promote the export of cassava-based products to generate revenue and bolster the value of the Naira.

In this article, we will explore the concept of commodification, the current state of the Nigerian economy, and the potential of cassava-based products to address the challenges facing the Naira.

What is Commodification?

Commodification refers to the process by which something without an economic value gains economic value that can replace other social values. 

In the case of the Naira, the idea is to transform it from a simple currency into a commodity that can be traded or exported to generate revenue.

This would increase the demand for the Naira, which would, in turn, increase its value.

The Current State of the Nigerian Economy

The Nigerian economy has been facing several challenges, including inflation, unemployment, and a devalued currency.

Inflation has been on the rise, with the inflation rate reaching 17.38% in August 2023. Unemployment is also a major issue, with the unemployment rate at 33.3% in the second quarter of 2023. 

The Naira has also been devalued, with an exchange rate at N1000.50 to $1 as of September 2023.

The Potential of Cassava-Based Products

Cassava is a root vegetable that is widely grown in Nigeria. It is used in the production of several food products, including garri, fufu, and tapioca.

Cassava-based products have the potential to be a major source of revenue for Nigeria.

The idea is to promote the export of cassava-based products to generate revenue and bolster the value of the Naira.

According to Uzoma Oranebo, the key to the commodification of the Naira using cassava-based products is to create a compelling brand story around cassava and market it to trigger foreign export.

This would cause the demand for Naira to increase, and the law of demand and supply would take its course.

Conclusion

The idea of using cassava-based products for the commodification of the Naira has generated reactions from Nigerians. While the idea has potential, it remains to be seen whether it will be implemented and its effectiveness in addressing the challenges facing the Naira. However, the potential of cassava-based products to be a major source of revenue for Nigeria cannot be ignored. The Nigerian government should explore ways to promote the export of cassava-based products to generate revenue and bolster the value of the Naira.

Table: Current State of the Nigerian Economy

List: Potential Cassava-Based Products

• Garri
• Fufu
• Tapioca