What the continuing and relentless drop in Naira value means is that all citizens are getting poorer by the day. Whether you are rich or poor, you are getting poorer.
Nigeria, often referred to as the “Giant of Africa,” is facing a daunting challenge that threatens its citizens and the nation’s overall stability.
The Naira is daily losing value relative to foreign currencies, particularly the American dollar. As I write this morning, one dollar commands more than N1000.
This loss of value has led to a sharp increase in cost of all goods and services. In other words, there is a steep decline in the purchasing power of the Naira, as economists would say.
Coupled with the high cost of fuel for vehicles and a general collapse of manufacturing, a storm of economic hardship has thus been created for the citizenry with a consequent increase in crime rates, and criminality across the board.
With little or no manufacturing, any increase in the cost of the dollar will lead to an increase in cost of goods in the marketplace because most goods are either imported or have a high import component in their local manufacturing processes.
Since May 2023 till date, the naira has lost half of its value. By simple logic, all prices have increased by 100%. Just yesterday, I bought a packet of shaving sticks for N1,800. Before Tinubu (BT) I bought same brand of shaving sticks for under N1,000 for the same pack of 5.
Dettol soap that I used to buy at N900 for a pack of 6 is now 900 for one. This steep price adjustment is the norm across all sectors in Nigeria today. Incidentally, salaries and wages have not been adjusted to match the price surges. In Nigeria, salary is not inflation adjusted. The simple effect is that the average Nigerian is now much poorer than he was before May 29, 2023.
Coupled with this disastrous cost of living, is the renewed effort by governments to collect more taxes from the hapless economically traumatised citizens. Even as citizens incomes buy less and less goods, many citizens are waylaid by multiple taxation. From LGA through state governments and up to the federal government, the mantra is increase in IGR, internally generated revenue.
These government agencies seem to forget that inflation generally leads to a down turn in economic activities. If governments continue to harass the few manufacturers left for more taxes, the net effect is that some of these factories will go under, thus throwing a lot more citizens into unemployment and penury. Clearly, this is a time for tax rebates and tax holidays, not tax increases.
Has Palliatives Helped?
From the experience in the Buhari era, one can safely say that palliatives have not helped the poor that it was meant to serve. Instead, it has lined the pockets of those in power. Nobody should forget that the youth protest termed #EndSARS was actually about antigovernment policies, anti-poverty and anti-palliatives hoarding.
The so-called palliatives were simply hoarded by government officials in government warehouses. There were many reports of politicians using the palliative items for their birthday parties or as gifts for their cronies and supporters. The point being made here is that the palliatives never got to those it was meant for.
In this Tinubu era, so far, palliatives have simply gone the same way. There is a viral video where a chairman of a housing estate was decrying the fact that their estate of about 150 households received a 25k bag of rice as palliative for the entire estate. This is simply the norm across the nation. In many states, citizens hear of palliatives but they see it not. They now term it “audio palliatives”!
What Of Cash Transfers?
For many Nigerians, these cash transfers are little short of official fraud. First of all, vulnerable Nigerians live mostly in rural areas where there is very little access to formal banking. Yet, government wants us to believe that it will transfer cash to these individuals, majority of whom cannot read and write, how then can they operate accounts? The Buhari cash transfer failed woefully and this columnist does not see how this one will fare better.
Despite these clearly token government efforts, citizens are getting clearly poorer. Many states have topped civil servant wages by a token sum, some by N10,000. While I commend these states for this gesture, many questions need to be answered. What percentage of a state population are civil servants. In most states, civil servants constitute less than 0.1%, yet poverty rate in Nigeria is put at 70%. How can a programme targeted at 0.1% of the population help 70% who are desperately poor?
Subsidising Farmers
The most efficient means of addressing the sharp rises in prices is to subsidise farmers. By this, I mean meaningful subsidy. Not the ones we saw in the past where a state with 3m population was given 5 tractors. Or the one that CBN under Emefiele funded politicians and governors in the name of funding farmers.
If government truly wants its welfare efforts to reach the average citizen, it should stop all these cosmetics and face the issues squarely.
They should target small scale enterprises, SMEs; they should provide loans to manufacturers and food processors whose components are largely locally sourced and not imported.
So long as our economy is gasoline based and for as long as gasoline is priced on the dollar (because it is imported) so long will poverty continue to grow in the country.
Therefore, every effort should be geared towards discoupling this nation from gasoline import. Isn’t it scandalous that a country that exports crude, turns around to import gasoline and diesel. How can an enterprise survive when it is powering its processes with diesel that is selling today above N1000 per litre?
We deserve a change in outcomes to reduce poverty in the country. Sadly, nothing will change if we continue to tolerate corruption. Tackling corruption within the government and public institutions is also essential to rebuilding public trust and ensure that resources are allocated efficiently.
Nigeria’s economic crisis, characterised by the rapid depreciation of the Nigerian Naira, high fuel and diesel costs, and a general collapse of the standard of living, is pushing the country to the brink of a major social and economic catastrophe. It is imperative that those in government take immediate and decisive action to address these issues.
A multifaceted approach that includes diversifying the economy, attracting foreign investment, and providing social safety nets is necessary to alleviate the suffering of Nigerians and restore stability. The future of Nigeria hinges on its ability to navigate this crisis and create a more prosperous, equitable, and secure environment for its people. Time is of the essence, and the government must act swiftly to prevent further deterioration of living standards and social order.
MAY NIGERIA REBOUND
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