The last eight and a half years have been tough for Nigerians. During this period, GDP growth averaged 1.1 percent as the country experienced two economic recessions.
Unemployment and underemployment rates increased to an all-time high of 56.1 percent in 2020, pushing 133 million Nigerians into multidimensional poverty, according to the data from the National Bureau of Statistics.
Likewise, economic growth has not been inclusive. Also, Nigeria’s economy faced key challenges of lowered productivity, and very weak expansion of sectors with high employment elasticity.
Another key feature of Nigeria’s economy in the last eight and a half years has been the shift of economic activity towards agriculture and a slowdown of the manufacturing sector. As a share of GDP, agriculture expanded from 23 percent in 2015 to 26 percent in 2021, while manufacturing declined from 9.5 percent to 9 percent respectively.
During this period, non-oil exports as a share of non-oil GDP averaged 1.3 percent while manufactured goods as a share of total exports remained low at 5.2 percent in 2021. Therefore, the major problem facing the economy is the neglect of the manufacturing sector. Essentially, Nigeria is not producing enough, for both local consumption and export. The consequences of having a weak manufacturing base for a country with such a large population are evident in its foreign exchange shortages, limited number of jobs created to accommodate workforce entrants, and an import bill that can hardly be met (nor sustained) by current export earnings.
High Unemployment Numbers
Worse still, 80 percent of workers are employed in sectors with low levels of productivity—agriculture and non-tradable services. This means that the kind of jobs needed to generate income growth and lift many Nigerians out of poverty are not really available in the required large numbers.
However, things seem to have gotten worse since May 29, 2023 following the removal of fuel subsidy and the floatation of the naira which had led to the freefall of the naira in value relative to other major currencies in the world which has exacerbated the hardship of Nigeria. Right now, in Nigeria, nothing seems to be working as far as the good of the people is concerned. The naira is depreciating at an unprecedented level; Nigerians can hardly cope with the rapidity with which the value of the naira changes at both official I & E Windows and at the parallel market (black market). All of these combine in making life miserable for Nigerians.
In a country with over 33 per cent unemployment rate, foreign multinationals are literally fleeing the country and new investors are not coming in to replace them. In the case of GlaxoSmithKline (GSK) Pharmaceuticals its departure has increased the cost of GSK produced drugs by over 500 percent, making them beyond the reach of the average Nigerian.
In the midst of these, the country is experiencing naira scarcity, yet the government has failed to explain to Nigerians the real reasons for the scarcity. Meanwhile food cost inflation has reached unbearable levels.
Also, there is still the problem of country-wide insecurity, a situation that has stifled economic activities in the country and contributed to the growing poverty in Africa’s most populous nation.
Tough Year indeed
Indeed, this year, 2023 has been a very tough one for most Nigerians except those in the ruling class. The situation is so dire that Nigeria’s 2024 budget may be largely funded by borrowing. The debt is still piling, as both domestic and foreign borrowing is still ongoing. The removal of the fuel subsidy without planned palliatives has worsened the rate of poverty; this coupled with the devaluation of the naira through floatation has skyrocketed the cost of food and other essential commodities.
Those have affected everything and everything since Nigeria is an import dependent country with little or no manufacturing at home. The economic reforms of the President Bola Ahmed Tinubu have not started to yield the desired results as domestic businesses are closing shop because of high cost of production, multiple taxation among many other challenges.
It is in this state of economic uncertainty that Christmas will be marked next week. As the holiday season approaches, the air is filled with excitement and anticipation. Families across Nigeria are preparing to celebrate Christmas, a time traditionally associated with joy, love, and festivities.
However, this year’s Christmas comes against a backdrop of economic challenges, making it crucial for families to approach the season with prudence and moderation. The removal of the fuel subsidy has had a profound impact on the cost of transportation. Transportation costs in most routes have soared by over 300 per cent, some even by 500 per cent. This rise in cost of transportation has resulted in a staggering 40 per cent rise in food costs, a fact which has left many families struggling to even eat.
In a country ranked as the poverty capital of the world, these economic challenges cast a shadow on the joyous season. It is disheartening to witness the strain on families as they strive to provide new Christmas clothes for their children and plan for travel expenses. The rising cost of living has created an atmosphere of financial stress, thus it is necessary to reconsider our approach to this festive season.
Celebrate with Prudence
In the spirit of Christmas, which revolves around love, compassion, and togetherness, it is essential for families to celebrate within their means. While the desire to create magical moments for our loved ones is natural, it is equally important to prioritize financial responsibility.
Instead of succumbing to societal pressures, let us embrace the essence of Christmas by fostering connections and expressing love in thoughtful ways. As we look forward to the New Year, characterized by the impending challenges of school fees and annual house rent payments, it becomes imperative for families to plan wisely.
The economic projections for Nigeria in the coming year, as indicated by the World Bank and International Monetary Fund (IMF), are not optimistic. Therefore, prudence and financial discipline should guide our decisions during this festive season. Let us remind ourselves that the true spirit of Christmas lies in the intangible gifts – love, kindness, and the warmth of shared moments. In the face of economic uncertainties, these are the treasures that truly enrich our lives.
This Christmas, let’s celebrate with moderation, cherishing the essence of the season while being mindful of the financial challenges many are grappling with. This is even more necessary for all those government MDAs that spend huge cash resources on Christmas hampers and gifts. They should shelve such lavish plans for now.
In doing so, we not only preserve the true meaning of Christmas but also lay the foundation for a more resilient and prosperous New Year for Nigeria and Nigerians.
Last Word
The political crisis in Rivers is becoming an embarrassment as well as a distraction to the ruling class as well as to citizens at large. It is the view of this columnist that the word godfather does not exist in the Lexicon of democracy. If anyone is godfather to a governor, it ought to be the citizens who voted him in. Having said that, can the politicians in Rivers State allow the citizens to breathe. That tussle has created so much tension that business activities in that state are on a lag. As the adage goes, when elephants fight the grass suffers. One hopes that this crisis is nipped in the bud before it snowballs into higher dimensions.
MAY NIGERIA REBOUND
