Thinking Economics

Thinking Economics

Most human behaviour can be viewed through an economic lens to identify trends, patterns, biases and misconceptions. This column assesses Nigerian behaviour by applying Economics to behaviour and behaviour to Economics.

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You've been framed: Why Narratives Matter

Chuba Ezekwesili

Chuba Ezekwesili

Chuba is an economist, a data analyst, and the co-founder of Akanka - a global design studio.

How many times have you seen a headline similar to this – "Nigeria loses $34 billion to tomato/fish/toothpick imports?" If you’re Nigerian, you’ve heard an assertion like this at least once. And how does it make you feel? Angry, right? How could we be losing so much money by importing these items?

If you share this or a similar reaction, you've been framed. 

Nigeria does not "lose" money when it spends on a foreign good. Why? It receives a good or service in return. If we were to spend ₦34 million purchasing military weapons to counter a terrorist insurgency, would this be described as a loss of ₦34 million or simply a transaction where we parted with ₦34m and gained valuable weapons?

Here’s an example that should help. Scenario A: A family in Yaba spends ₦100,000 on food; Scenario B: Another family in Yaba has ₦100,000 in cash stolen by thieves. What's the difference in the two situations? Would you say both families have lost ₦100,000? One family got ₦100,000 worth of food, and the other got nothing. Apparently, this delineation between the two scenarios should clear any confusion of what it means to lose money.

If all this seems a bit obvious, then good. We are actually pretty familiar with this difference and have an intuitive understanding of what it is to really lose something. So why do we still fall prey to such claims?

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