Nigerians have continued to wonder why the economic troubles in the country have been persistent despite different measures being put in place to tackle the current economic challenges. Some have also insisted that the country’s economy has been stagnated by the continuous selection of mediocre persons who were said to be incapable of helping to resuscitate Nigeria’s current economic woes. It is a fact that a country’s economy is the oxygen which it breathes.
This can be corroborated by the words of a British politician, David Cameron, who puts it this way: “An economy is the start and end of everything. You cannot have successful education reform or any other reform if you do not have a strong economy.” This translates to how essential a nation’s economy is and how it holistically affects the country’s growth.
Since the emergence of President Bola Tinubu on May 29, which followed an immediate and unexpected removal of fuel subsidy, Nigerians have been thrown into unprecedented hardship, with the price of food items and other commodities increasing almost daily.
The naira on recently hit N1,900 to a dollar at the parallel market, while at the official market, the naira stood at N1,551.24 to a dollar. According to the National Bureau of Statistics, as of May 2023, the headline inflation rate was 22.41% but it increased and hit a 27-year high as headline inflation rose to 28.9 per cent in December.
However, the National Bureau of Statistics, in its Consumer Price Index published Thursday, revealed that the inflation rate climbed to 29.90 per cent in January 2024, while food prices have continued to increase without end, with costs of essential goods hitting three times high in the market.
For instance, it was gathered that one of the most consumed foods in Nigeria; rice, which used to sell for between N45,000 and N50,000 in November, now costs over N70,000, while noodles formerly sold for between N1,900 and N2,000 now sell for N7,000 to N7,800 in Lagos.
Also, garri, which was one of the cheapest foods before and was sold for N800 for a paint bucket, is now sold for N2,500. While a bag of beans, which was sold for between N22,000 and N25,000, now sells for between N75,000 and N80,000.
In the same vein, the cost of transportation has astronomically increased as fares at most destinations have tripled since the removal of the petrol subsidy. The price of petrol currently sells between N600 and N650 per litre depending on the filling station. This was before the price increased from N195 per litre.
According to the NBS, the average cost of bus transportation within Nigerian cities rose from N649.59 in May 2023 to N1,285.41 in June 2023 as the pump price of Premium Motor Spirit significantly rose.
The biting economic hardship forced many Nigerians to take to the streets in some cities across the country, protesting against the economic downturn. Protests had broken out in different parts of the country in reaction to the high cost of living, with citizens in Niger, Kano, Kogi, Ondo, and Oyo, among other states demanding solutions to the economic crisis.
Again, The Nigeria Customs Service recently announced the suspension of the sale of foodstuffs following a stampede that reportedly killed seven persons at the NCS Old Zonal Headquarters in the Yaba area of Lagos State. With this, the attempt by the government to find a quick solution to hunger and hardship was stopped.
This was as the National Executive Council of the Nigeria Labour Congress issued a 14-day ultimatum to the Federal Government to implement the October 2, 2023, agreement and address the mounting cost of living crisis in the country. The NLC also declared a two-day national protest on February 27 and 28 to register their outrage at the frightening level of hardship and lingering security challenges.
Although this was not the first time the Organised Labour had threatened a strike since the removal of the subsidy, it did the same, which was planned to commence on August 2, 2023, but was cancelled after President Bola Tinubu rolled out a list of plans to ease the hardship in a nationwide protest on July 31.
In the broadcast, the President said his government had saved over N1tn within two months of ending the petrol subsidy regime while listing several initiatives to cushion the hardship. The President said his administration would invest N50bn each to cultivate 150 hectares of rice and maize; N50bn each would be earmarked to cultivate 100,000 hectares of wheat and cassava; invest N100bn on or before March 2024 to acquire 3,000 units of 20-seater CNG-fueled buses; collaborate with the labour unions to introduce a new minimum wage for workers; 75 manufacturing enterprises will be able to access N1bn credit at 9% per annum; and to energise the micro, small, and medium-sized enterprises with N125bn.
Others are N50bn on a conditional grant to one million Nano businesses before March 2024; to fund 100,000 MSMEs and start-ups with N75bn; each enterprise promoter to get between N500,000 and N1m in loans at a nine per cent interest rate per annum; to provide 225,000 metric tonnes of fertilizer, seedlings, and other inputs to farmers; and to order the release of 200,000 metric tonnes of grains from strategic reserves to households at moderate prices.”
In line with promises, in August, the Federal Government approved N5bn as a conditional cash transfer palliative to 15 million households for each state and the Federal Capital Territory. The monthly federal allocation to states was also increased to almost double what was received in the past after the subsidy removal.
In January 2024, the President ordered the distribution of palliative items worth N200m to senators and Rep members for onward distribution to their constituencies. In February, Tinubu directed the release of more than 102,000 metric tonnes of various grain types from the National Food Reserve and the Rice Millers Association of Nigeria.
Also, in February, the Bank of Industry revealed that it would be disbursing three categories of funding totaling N200bn to support manufacturers and businesses across the country.
Despite the efforts of the government, civil society organisations and stakeholders have argued that no positive results have been achieved as the hardship in the country worsens daily.
Speaking on the matter, the Chairman of the Rivers State Civil Society Organisation, Enefa Georgewill, said, “If government policy is yielding positive results, we would have been seeing signs of it. Rather, what we are seeing is that things are getting worse; people are getting poorer, and people are getting hungrier. Companies are also collapsing. We are not seeing any visible signs that things will get better because they are getting worse by the day.”
He criticised the APC governments under Buhari and Tinubu, describing them as “directionless.” According to him, it is a wrong decision to remove the petrol subsidy in a country that cannot provide a stable electricity supply. Petrol and other related products are the energy life wire of Nigeria and that is why, immediately after they removed the subsidy on petrol, they increased the cost of everything in the country. And what is happening is a reflection of what we said before.”
He stated further that the subsidy removal policy had only succeeded in inflicting more hardship on the people, saying it had “made Nigeria poorer and disempowered. And until it is reverted, we are going to go down deeper in the poverty line.
Georgewill, however, wants the Federal Government to invest “heavily” in energy to ensure it is sustainable.
According to him, if Dangote could say about 30 per cent of their production cost is consumed by energy, one can imagine what small enterprises are confronted with. He also enjoined the Tinubu-led government to invest in agriculture for food security.
He added, “It is a shame that Nigeria cannot utilise its arable lands to feed itself and boost the economy and we are saying that the Federal Government should immediately declare a state of emergency on agriculture so that there would be food sufficiency.”
Also, the founder of the Act for Positive Transformative Initiative, Tolulope Babaleye, described the initiative adopted to cushion the effect of the subsidy removal as a “widow-guessing solution.”
According to him, the removal of the subsidy, which has thrown all Nigerians into hardship, was a “mistake” by the president, who was unaware that he had been led into a “trap” by former President Buhari.
“I think the President made a mistake in just announcing the removal of subsidy on the very day he was sworn in without finding out the actual situation of things. I believe the last government must have hidden some things from him. Nobody knew Nigeria’s economy would be as bad as this. It was like a moving trap.”
He, however, said that the steps that have been taken by the government require patience and that with time, they could yield the expected result.
He added, “I pity the president because Nigeria seems to have lost their patience. And if something drastic is not done between now and a few months, I am afraid there may be a replica of the Arab Spring because the situation is very tough.
“Everything has a divided solution because the economy is fully dependent on importation. And any economy that depends on importation would have its currency decline in the world market and that is what is happening to us. For us to get to that level, we have to have a productive economy. How? We must have power and electricity because this determines most things.”
Also, the Director General of the Presidential Campaign Council of the Peoples Democratic Party in Kwara State, Dr Mahmud Ajeigbe, said, “Every government comes in with policies they believe will drive the economy of the country. I am not so sure about the dynamics in which some of these policies were set up because a government that has been in power for nine months is going down. I am not sure where we can point out that the problem lies because it is a tough one.”
He also said it was easy to accuse the previous government of not governing well, which was what led to the current situation, but the failure of the government to provide relevant information on the situation of things has contributed to a great extent to the nation’s predicament.
He said the current hardship started with the deregulation of fuel prices, which had continued to worsen the costs of goods and services.
“I think the major problem is that there has not been good information on what is going on or if they have an idea of where this will get to with all these things falling apart. What I have seen is that every month is now worse than the previous month. It is tough.
“For me, this is beyond politics because it affects everybody, whether you are APC, PDP, or anyone else. I don’t know what exactly they are expecting to achieve with whatever they are doing. What I know is that if you do certain things, you will expect certain results. Is this what they were expecting to happen? If yes, what are we expecting to happen next?”
On his part, the Vice Chairman of the Kwara State PDP, Abraham Amah, said Nigerians would not have been facing the current hardship if Buhari had revived the refineries as promised during his campaign in 2015.
He advised the Federal Government to open the borders for the importation of cement, rice, and other important commodities to end the monopoly within a certain period of years, which would crash the market prices. According to him, crisis looms if the government does not address the situation in a few months, saying the situation will deteriorate as many families will no longer have the capacity to pay house rents and cater for themselves.
“I think that the steps that the President needs to take right now are to open the importation of cement. We cannot continue to leave these things in the hands of a few individuals, at least for a window period of two years, to allow his policies to stabilise so that within this period, rice and other basic items can be affordable. They should allow more people to participate in the importation of cement, rice, and flour. It will go a long way towards ameliorating the suffering of Nigerians.
“Nigerians cannot afford rice at N80,000. The minimum wage is N30,000, but despite that, most states are not paying it. How will people then cope? If these things are not taken care of, we are going to face more challenges. Firstly, many people will not be able to pay their rent because the cost of rent will increase. After all, the cost of building materials is also increasing consistently.”
He, however, urged the President to engage more technocrats to work and fast-track the process of resolving these economic crises.
Supporting Amah’s view, an economist and Professor of Economics at the University of Uyo, Edet Akpakpan, urged the President to assemble experts who would proffer solutions and guide in the implementation of the solutions.
He, however, disagrees with the PDP vice chairman’s position on allowing for importation, saying Nigeria must reduce the level of demand for the dollars. Akpakpan also stated that most of the increase in the prices of commodities was “artificial”, adding that the rate of insecurity rate in the country has affected the country’s production line, thereby causing food scarcity.
He said, “Some of the increases in some of the commodities are artificial; part of it is what has happened to production. Production has shrunken because of insecurity. Food insecurity is affected by the prevailing security situation in the country and whoever manages to have the food in stock will take the prices up.”