Nigeria is currently experiencing its worst economic crisis in a generation, leading to widespread hardship and anger. A liter of petrol costs more than three times what it did nine months ago, while the price of the staple food, rice, has more than doubled in the past year.
These two figures highlight the difficulties that many Nigerians are facing as wages have not kept up with the rising cost of living. Like many nations, Nigeria has experienced economic shocks from beyond its shores in recent years, but there are also issues specific to the country, partly driven by the reforms introduced by President Bola Tinubu when he took office last May.
Overall, annual inflation, which is the average rate at which prices go up, is now close to 30% - the highest figure in nearly three decades. The cost of food has risen even more - by 35%.
However, the monthly minimum wage, set by the government and which all employers are supposed to observe, has not changed since 2019, when it was put at 30,000 naira - this is worth just $19 (£15) at current exchange rates.
Many
are going hungry, rationing what food they have or looking for cheaper
alternatives.
In the north, some people are now eating the rice that is normally discarded as part of the milling process. The waste product usually goes into fish food.
Widely shared social media videos indicate how some are reducing portion sizes. One clip shows a woman cutting a fish into nine pieces rather than the average four to five. She is heard saying her goal is to ensure her family can at least eat some fish twice a week.
What is causing Nigeria's economic crisis? Inflation has soared in many countries, as fuel and other costs spiked as a result of the war in Ukraine. But President Tinubu's efforts to remodel the economy have also added to the burden. On the day he was sworn in nine months ago, the new president announced that the long-standing fuel subsidy would be ending.
This had kept petrol prices low for citizens of this oil-producing nation, but it was also a huge drain on public finances. In the first half of 2023, it accounted for 15% of the budget - more than the government spent on health or education. Mr. Tinubu argued that this could be better used elsewhere. However, the subsequent huge jump in the price of petrol has caused other prices to rise as companies pass on transportation and energy costs to the consumer.
One other factor that is pushing up inflation is an issue that Mr. Tinubu inherited from his predecessor, Muhammadu Buhari, according to financial analyst Tilewa Adebajo. He told the BBC's Newsday programme that the previous government had asked the country's central bank for short-term loans to cover spending amounting to $19B. The bank printed the money, which helped fuel inflation, Mr Adebajo said.
What has happened to the naira? Mr. Tinubu also ended the policy of pegging the price of the currency, the naira, to the US dollar rather than leaving it up to the market to determine on the basis of supply and demand. The central bank was spending a lot of money maintaining the level. But scrapping the peg has led the naira's value to plunge by more than two-thirds, briefly hitting an all-time low last week.
Food commodity prices rose from Eggs at 32% to Onions at 123%. Like in the US and everywhere else, when you add the food cost increases to the reported inflation percent, inflation is in the 30% to 40% range.
https://www.bbc.com/news/world-africa-68402662
Comments
The President of Nigeria needs to recognize his mistakes with money printing and currency crashing by pegging their currency to the US dollar. He needs to share his view of “current conditions” and his recovery plan with his citizens.
The food cost problems outlined above affect the poorest 12 million citizens more than it affects the 100 million of the 112 million population.
Biden’s support of the Climate Change Hoax prompted him to reduce oil and natural gas production. Supplies were reduced and prices rose. Natural gas produces Nitrogen, needed to grow food. It also increased the price of gasoline that made distribution costs rise.
Norb Leahy, Dunwoody GA Tea Party Leader
No comments:
Post a Comment