The hopeless situation that many Nigerians have found themselves following the sudden removal of the oil subsidy and unplanned floating of the Naira has been adjudged as unprecedented.
The condition is made worse with the poor economy inherited from the Muhammadu Buhari government.
It is obvious that the two policies of the present administration though laudable, were ill-timed. They were implemented without adequate policy direction or benchmarks to mitigate the adverse impact on the citizenry.
Neither of the initiatives can or should be reversed at this point because the repercussions will be way more devastating.
While staying the course, President Tinubu has a lot of work to do to rebuild the economy and gain the trust and confidence of the citizens before it is too late.
The economic hardship, the high cost of living and the rising prices of goods and food items in Nigeria have reached alarming levels. Foreign exchange is becoming alarming by the day, with the high rate of crime getting scary. The prices of food and commodities have skyrocketed in the markets, and Inflation rates have surged, eroding the purchasing power of an average Nigerian.
Drugs have become out of reach for the poor and the costs of goods and services have multiplied incredibly. Even fees for both private and public schools have been outrageously increased. Despite low usage, electricity bills have gone up. The reality on the ground is very terrible, and the government should act assiduously.
Factories and shops are closing, even as people are losing jobs. It is separating homes and increasing crimes. The situation in recent times has pushed many people to take extreme measures, even severe depression and taking their own lives. The rising cost of living is driving Nigerians to take extreme measures to survive or give up and the unemployment rate is alarming.
A recent report released by the National Bureau of Statistics (NBS), Nigeria’s unemployment rate surged to 5% in the 3rd Quarter (Q3) of 2023 from 4.2% in the previous quarter. The report stated that the unemployment rate in Africa’s biggest economy, with more than 200 million people, fell from 5.3% in Q4 2022 to 4.1% in Q1 2023. It also added that the unemployment rate increased significantly in Q3 2023 at 5.0 per cent. This is an increase of 0.8 per cent from Q2 2023.
However, the Tinubu government has taken some measures to alleviate the suffering of Nigerians and immediately address the economic hardship.
Some of the measures include the distribution of food palliatives to cash transfers to the citizens. Also, the President ordered the release of 10,000 metric tons of grains from the national food reserves.
As good and pleasant as the measures may sound, their effectiveness is yet to be seen and felt by the citizens, and no data has been provided to show the beneficiaries of palliative. It may not bring any comfort or relief to the people because of insufficiency.
A political economist, Akinkunmi Ogunbanjo, said the present bad economic condition of the country needs immediate attention.
Ogunbanjo stated that the country’s problem is not the supply, but purchasing power, stating that the better part of the nation’s foreign exchange earnings come from the sale of oil.
He said: “For a one-dimensional economy like Nigeria, the implications are far-reaching. One, almost 90% of our foreign exchange earnings come from the sale of oil. Two, our annual Federal budget is created based on projections made on oil prices and the quantity of oil sold. There were early signs and warnings, but our insensitivity contributed a lot. Based on some of these anomalies, Nigeria was said to be technically in recession, sick or heading to recession.
“And what, then, is a recession? It is a situation where the country’s state of the economy declines; there is a widespread decline in GDP and per capita income, the decline in employment and trade lasting from 6 months to a year. The resultant effect of all these is that the inflationary trend soars, investors pull out their funds from the market because our Nigeria economy depends majorly on crude oil earning, there will be economic hardship, people will suffer to pay their bills or meet up with their daily obligations, sack of workers among economic agents, high unemployment rate, hike in the prices of basic amenities like food items, housing and shelters.
“Prices of food items have also continued to increase in increasing order, leaving the cost of living too high for an average Nigerian. Most States of the Federation today have been declared insolvent or bankrupt because they can’t even meet their obligations to the masses, such as welfare and security. Some can’t even pay their workers salaries nor provide basic infrastructural facilities and or social amenities in recent times. Others have adopted the half-salary paradigm for their workers, while many have resulted in indiscriminate taxation to meet up with the challenges.
“At the Federal level, the case is no different. The hardship has led to a various cut in the spending of the Federal government. Over the years, there has been a deficit balance of payment and balance of trade. Our national reserve has continued to fall over the period. With all these anomalies, today, the state of the economy has declined to a level where everybody is hugely affected. There are serious problems, hardships and sufferings in the country as a result of the economic kwashiorkor.”
Akinkunmi Ogunbanjo reiterated the fact that one of the major causes of Nigeria’s economic woes was over-dependence on crude oil as a major source of revenue for the government.