Hunger. Hardship. Protests. These are the words that are increasingly trending in the conversations among Nigerians on and off the social media. They summarize the existential experience and reality in Nigeria in the past eight months or so.
Social media platforms are filled with video clips showing hungry children and women scrambling for cooked or raw food items donated by an occasional kindhearted individual or organization. Routine greetings or discussions are never complete these days without passionate rendition of account of tales of how individuals and families are dealing with the hard times. Market prices now spike by the miniute – not by the day any more. To prevent possible heart attack resulting from the shock of such unpredictably brutal assault on family budgets, a widely circulating message on social media now warns men to switch off their phones until their wives return from the market.
But, for how long can Nigerians shut themselves off from the reality of their daily living? They have had enough already and have decided to register their disillusionment publicly. Beginning with isolated cases, Nigerian women and youths have taken to the streets to protest the worsening economic hardship. At the last count, the protests had taken place in Minna, Niger State; Kano and Ibadan, Oyo state. The Organized Labour has taken up the gauntlet, to make the protests more coordinated nationwide a reality. The Nigeria Labour Congress has scheduled a two-day nationwide street protests against economic hardship for February 27 and 28. Whatever relief or solution the action is capable of bringing remains to be seen.
What we do know for now, however, is that the hardship has taken a huge toll on the lives of Nigerians. The Nigerian Red Cross Society (NRCS) has asserted that the nation’s hunger crisis has reached a critical level, necessitating urgent action and collective efforts to alleviate the plight of vulnerable individuals.
Dr. Abubakar Ahmed Kende, Secretary-General of NRCS, who sounded the alarm during an event in Abuja recentlly, expressed the organization’s deep-seated concerns regarding the escalating food insecurity gripping the country.
Kende revealed that an alarming 26.5 million Nigerians, including women and children, are currently grappling with acute hunger. The disproportionate impact of malnutrition falls on children, pregnant women, and lactating mothers, with nearly 4.41 million children and 585,000 mothers facing acute malnutrition. He lamented the grim reality that approximately 1,000 Nigerian children succumb daily to malnutrition-related causes. He cited factors such as insecurity, inflation, extreme weather patterns, and global conflicts as driving forces behind the crisis, saying the situation requires desperate and urgent assistance to avert fatalities and prolonged suffering.
Unfortunately, fatalities are already here. The Academic Staff Union of Universities, Abuja zone, attributed the death of 46 of its members to the current economic hardship in the country alongside poor remuneration of academics and unfavourable working conditions. The zonal coordinator, ASUU, Abuja zone, Salahu Muhammed, disclosed in a statement released on February 19 in Abuja that the deaths occurred in the University of Abuja, Federal University of Technology, Minna; Federal University, Lafia; Nasarawa State University, Nasarawa; and the Ibrahim Babaginda University, Lapai. He cited the case of an eminent Professor of Fisheries, Johnson Oyero, of the Federal University of Technology, Minna, who died due to the inability to afford quality medical facilities.
In its attempt to address this ugly situation, the Federal government could succumb to the temptation of denying responsibility or looking for scape goats. It could, for instance, trace the roots of the current state of the country’s economy back to decades of overdependence on oil revenue and other imports, neglect of the manufacturing industry, failure to develop the country’s solid mineral resources, wastage of government revenues on fuel subsidy, corruption, etc. The Federal Government could also blame political opposition, as it has started to do, for instigating the public to protest against the short term pains of its policies that were designed to stabilize the economy in the long run. But it is our candid opinion that neither of these resorts, individually or combined, can excuse the Tinubu administration from blame or restore Nigeria’s economy to good health now or in the near future.
The essence of electing new governments at intervals in a democracy is to provide opportunities for correcting bad governance of the past or improving on the existing good one. Whether elected on the platform of the ruling party, like that of Tinubu, or of an opposition, the new government is expected to take stock of past or existing policies; it is expected to assemble its own team(s) of experts; adopt or adapt existing policies or design new ones, subjecting them to strategic analysis before implementation. It was obvious that Tinubu took none of these measures before introducing the two policies of his new administration that are now traumatizing Nigeria and its citizens – removal of fuel subsidy and floating of the exchange rate.
The new president casually announced the withdrawal of fuel subsidy in his inauguration speech on May 29, 2023 and followed it up in June with the floatation of the exchange rate. There was no cabinet in place, no economic or finance minister, no economic team – nobody in government beside him and the Vice President – to analyze and articulate the possible effects of the policies with a view to putting measures in place to mitigate the adverse effects. Apparently, the President only saw the prospect of increased revenue earnings by government which he promised to invest in public transportation, health, education, security and other physical infrastructure.
Eight months down the line, Nigerians are yet to see any tangible evidence of such life-changing investments. Instead, what they have been confronted with daily is the spiraling cost of living and of doing business resulting from the twin policies of fuel subsidy withdrawal and currency devaluation. Before Tinubu’s subsidy declaration, the pump price of petrol was below N190/litre; it jumped to over N500/litre after the President’s statement, and moved up again to over N600/litre a few weeks later. Today, it is hovering in the neighborhood of N700/litre. This is the direct consequence of the devaluation of the Naira because 100 percent of the fuel consumed in Nigeria is imported.
From less than N500 per $1 when the nation’s currency was floated by Tinubu in June last year, the Naira is exchanging at around N1,700/$1 now. This is a staggering loss of value. Among 151 currencies it tracked, Bloomberg reckoned the naira as the worst-performing in the world in 2023. This has, in turn, pushed the landing cost of petrol, which includes the product’s international price, shipping, insurance, and other charges, to about N1,100/litre from N720/litre in October 2023. What this means, in essence, is that the fuel subsidy which Tinubu withdrew in May last year has been brought back by the devaluation induced by the floatation of the Naira.
Thus, not only has the initial objective of government earning stupendous revenue from subsidy removal turned into an illusion, the accompanying policy of currency floatation has induced a spiral of general price increases economywide. For instance, from about N35,000 a year ago, a bag of 60kg of rice is currently about N75,000. Beans, garri, fruits and vegetables, cooking oil and seasonings are similarly expensive. A bag of cement which cost below N5,000 before Tinubu’s arrival now sells between N10,000 and N15,000 depending on the location. Water and drinks are not left out. It does not matter whether these items are imported or produced locally. From 22.79 percent in June 2023, the rate of inflation accelerated to 28.99 per cent in December. Food inflation inched to 33.93 per cent, reportedly a 21-year high.
In our editorial titled ‘Time for a rethink on fuel subsidy’ published in August 2023, we likened the impact of the subsidy withdrawal by Tinubu on the economy to that of the Ibrahim Babangida regime’s Structural Adjustment Programme (SAP) of the 1980s and early 1990s. We said the introduction and implementation of the zero subsidy policy were not well thought out; that the palliatives designed to cushion the effects of the policy were incapable of addressing the hardships it would bring on citizens and businesses; and that “the combined and ultimate effect of the subsidy removal is the eventual collapse of our economic, social and political systems, if not the country itself.”
We predicted that “it might not be too far into the future before the masses, union or not, will pour unto the streets to register their protests with their feet, stones, sticks and other available unfriendly objects.”
The evolving state of affairs in our economy since then has vindicated us. While most of the palliatives promised by the government are yet to produce any visible impact, the government is still looking in the direction of more palliatives, including the release of grains from strategic reserves, for solution. The government is also working with the private sector, organized labour and other stakeholders to introduce a new, higher minimum wage for workers. We want to restate our position that no amount or form of palliatives can resolve the economic challenge we now face, neither can any minimum wage, no matter how high. Apart from the fact that palliatives and minimum wage benefit only a negligent proportion of the population, the rampaging inflation occasioned by the relentless depreciation of the Naira would soon wipe off any consolatory gains.
We sincerely believe that in order to genuinely tackle this cost of living/doing business challenge, the Tinubu administration must put politics aside and face the realities head on. That politics is the urge to accuse the opposition of instigating the current public outcry or protest against the state of the economy. All housewives, family breadwinners, business people and party members buy from the same market and need no opposition politician to tell them that things are really and terribly bad.
The realities the government must face, as we see them, are as follows:
One, the removal of 100 percent subsidy on fuel in Nigeria under the current structure of the economy (100 percent dependent on imported fuel and domestic road haulage; and about 80 percent dependent on imports of manufactured and household products) is unsustainable. For the same reason, a floating foreign exchange regime is ill-advised.
Two, fuel subsidy, as explained above, has been brought back by the market forces unleashed by the removal of subsidy and floating of the Naira by the Tinubu administration. If these market forces – the exchange rate and general prices – are allowed to continue their free reign, the pump price of fuel in the next one year could be as high as N2000 per litre. Only God knows where the prices of other goods and services would hit by then.
In the light of these ominous realities and prospects, the following lines of action are suggested:
IMMEDIATE ACTION – The government should humbly accept the failure of its fuel subsidy and Naira floatation policies, fix fuel pump price and the exchange rate at the current levels. It must resume and sustain the payment of whatever subsidy that this entails in order to stabilize both the economy and the polity until medium to long term policies to be implemented begin to produce the desired effects.
We make bold to offer this prescription fully aware of the enormous fiscal cost involved. But we believe that no amount is too much to pay, at least, for the stability of the economy and the government. In like manner, we believe that the government is better placed to pay such a price than the citizens as the unfolding experience in the market place and the dining table since May last year has shown. As government officials, insiders and experts have pointed out time without number, the previous subsidy regime was riddled with corruption which bloated the subsidy paid far above the actual. We expect the new subsidy regime we are prescribing to be free of corruption, learning from experience.
MEDIUM TERM ACTION – All the existing government-owned refineries must be revived and returned to full capacity production. Also, new private refineries must be encouraged to join Dangote Refinery (commissioned but not producing yet) to boost domestic refining so that by, say, 2027, the country will be self-sufficient in locally refined petrol. Mass commuter transit and goods haulage should also be diversified away from fuel-consuming road transportation to rail and waterways to reduce fuel consumption.
LONG TERM ACTION – Nigeria should be transformed from a consumption to production economy; from an import-dependent to an exporting economy. Policies that discourage importation and encourage exportation should be designed and implemented. For instance, policies should compel Nigerians to eat and wear only what they produce or produce all they eat and wear.
The current situation in which few privileged Nigerians live a life of luxury which the majority of the poor citizens pay for through the withdrawal of subsidy is unacceptable and must stop.
