By Mudiaga Affe, Andy Asemota, Cajetan Mmuta, Idu Jude, David Lawani and Elijah Keturah
Hunger is not just looming, it is already in the land. And it has persisted for a while, resulting in a majority of Nigerians facing hard times.
The continued financial policies of the apex bank, the Central Bank of Nigeria, may have worsened the situation as Nigerians groan under the high cost of living.
Essential food items, such as bread, rice, meat, tomatoes, among others, many citizens say, are beyond their reach nowadays.
Only last week, the apex bank, once again, devalued the naira to N410.25 to a dollar.
In fact, as of Saturday, May 29, incidentally the day President Muhammadu Buhari marked six years in office, currency speculators (black market operators) sold a dollar for N492. Euro sold for N595, while the British Pound was at the rooftop exchanging the naira at N690.
Dollar before the advent of the Buhari administration exchanged at N192.
The increasing naira free fall, coupled with unabating security challenges occasioned by banditry, insurgency, herders-farmers’ conflicts, among others, may have led to the high cost of living resulting in frustration and hunger in Africa’s most populous nation.
Nigeria’s rough population estimate is about 200 million.
The Ooni of Ife, Oba Adeyeye Adewusi, attested to this ugly commentary a few days ago at a National Security Summit in Abuja when he said that youths, comprising 70 per cent of the country’s population, are hungry and angry with the state of the nation.
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The monarch said, “Let us tell ourselves the truth, our youths are hungry and they are angry. I repeat: they are hungry and they are very angry. All of us that are here, I will be very happy if anybody can raise their hand and say I can go to my constituency, my local government area, and I can stay there in peace for one week.”
Oba Adewusi’s position on the state of the nation is not different from the views of economic experts who believe that the rising cost of inflation is a clear danger for the nation.
The situation is further worsened by the Nigerian Governors’ Forum subtle endorsement last March for an increase in the pump price of petrol from N162 to between N385 and N408.
Several market surveys carried out by our correspondents indicate that the prices of these items, including services and transport fares, have increased astronomically.
For instance, in Benin, Edo State capital, a congo (a local instrument of measurement) of white beans which formerly sold for N700 has risen to N1, 300, while a congo of brown beans rose from N800 to N1, 500.
The same quantity of foreign rice now sells for N2, 000 as against N1, 350, and stone-less local rice rose from N1, 300 to N1, 700. Also, the same quantity of garri, which previously sold for N700, has risen to N1, 200.
In Lagos, a loaf of sizeable bread that previously sold for N300, now sells for between N400 and N500, while a carton of Indomie noodles that formerly sold for N2,100 now sells for N2, 700.
Similarly, garri (paint bucket size) has risen from N700 to N1,200 just as a crate of egg now goes for N1,700. Before now, a crate of egg sold for N1, 100.
The situation is not different in other parts of the country where the cost of essential food items such as yam, beef, groundnut oil, palm oil, tomatoes, and pepper has risen astronomically even when the controversy surrounding the N30, 000 minimum wage has yet to end.
Some states have yet to pay the minimum wage, while a majority of the private enterprises still pay as low as N15, 000 per month.
Yusuf Lawal, a yam seller in Kubwa, Abuja, said, “I do sell tubers of yam, and I get them from Minna. The price of yam has since increased from N22, 000 to between N40, 000 and N50, 000 per calabash, and in a calabash, you can get between 70 and 100 tubers of yam.”
A trader at the Duste-Alhaji market in Abuja, Esther Timothy, said, “As of two weeks ago, we bought a bag of garri at N32, 000. We normally buy from Maddala, Nasarawa State, and Niger State market every Thursday. But last week, we bought garri for N38.000.”
Some of the market traders and dealers told ThisNigeria that the increases arose as a result of a hike in transport fares to bring the products into the market, while others attributed the development to a scarcity of the goods.
A National Youth Service Corps member with the National Council for Women Society in Abuja, John Saratu, lamented that the increase in the cost of commodities was affecting him negatively.
“Since I was posted to Abuja, I have noticed steady increases in the price of goods and services. In fact, every imaginable thing I know of has increased in one way or the other. I used to buy meat at N1, 400 per kilo, but presently I buy it for N2.000 per kilo. A bottle of coke that was sold before for N100 is now N150. The same goes for transportation fare and it is affecting us financially.”
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Other stakeholders have attributed part of the challenge to the continued devaluation of the naira by the CBN and warned of looming dangers.
Experts’ opinion
The Head of Department, Economics, University of Abuja, Prof. Sarah Anyanwu, said the latest deregulation by the CBN does not reflect what goes on in the Nigerian market.
According to her, the policy to deregulate only favours foreign exchange without considering the local price of goods, which is determined by the importation of goods.
“Well, it is good to be in line with the international rate of exchange more especially when importing in a single-digit, yet on the other hand, the strength of naira diminishes locally and this brings hyperinflation.
“The bank devalued the naira by 7.6 per cent against the dollar as the federal government migrates toward a single exchange-rate system for the local currency. The official unification of these rates is a welcome development as the fragmented foreign exchange market has been a cause of confusion and a source of arbitrage.
“I am still trying to grasp the whole idea. Well, it could be that Nigeria adopted the multiple exchange-rate regimes to avoid an outright devaluation of the naira by keeping a stronger pegged rate for official transactions and weaker exchange for non-government related transactions.
“This currency management system was criticised by the International Monetary Fund, and the World Bank who held back a $1.5bn loan in a bid to push for more foreign-exchange reforms.
“Now as you can see this whole idea is to certify only government official transactions not asking questions on how the informal market manages to survive.”
For a renowned agricultural economics teacher, Prof. Osifo Agharese, inflation is biting hard because “Nigeria is an import-dependent economy, meaning that a lot of goods and services consumed in the country have high import content.”
He continued, “The devaluation of naira to N410.25 is exposure to import and export windows; all goods and services will have inflationary level billed into it. It is called cost-push inflation, meaning that the cost of production has gone up because the cost of buying foreign exchange has increased.”
Agharese pointed out that the trend would lead to lowered income because when inflation is high, the income of the workers is reduced.
“And our standard of living reduces also while our cost of living increases. This is because of the higher rate of buying dollars which is the most convertible currency and which portends a very bad omen,” he stressed.
Counselling the Buhari administration, the university teacher said there was an urgent need to rescue the economy with policies and programmes that would cater to the needs of millions of jobless youths and the poor masses.
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On the rising cost of food, Agharese, a consultant agricultural finance and marketing practitioner to Bank of Agriculture and the CBN, said food security was a sine qua non to human security, adding that if the prices of essential items continue to rise, there may be socio-economic chaos.
He also urged the government to watch out for more violent crimes as people, particularly low-income earners, would become agitated because they would no longer afford the price increase of basic food items.
‘No country allows its currency to suffer free fall’
A chieftain of the National Chambers for Commerce, Industry, Mines and Agriculture (NACCIMA), Salish Mamman, said, “The inflation rate is cause for concern to everybody but the reality of it is that any nation or system that is faced with spiralling or galloping inflation will need to do so many things.”
Mamman, the chief executive of Continental Group and a two-time member of NACCIMA’s executive is, however, optimistic that the CBN and the Nigerian government would look at so many possibilities and fiscal measures in order to mitigate and reverse the trend.
He said, “The CBN has recently taken a proactive step by harmonizing the different fired rates. At the same time, the CBN has cautioned that they are still looking at it; they are not going to allow a free fall of the naira that will worsen the situation. No country will allow its currency to face a free fall.”
For a public policy analyst, Emmanuel Onoja, the steady devaluation of the naira given the foreign exchange rates is cause for concern for investors and average Nigerians, who are worried about currency risk and sky-rocketing prices of necessities of life.
“The economy is hard hit; the inflation is not abating and the naira’s crashing means the economy is not improving at all. So, it appears that Nigerians should brace up for more difficult times ahead,” Onoja, a lawyer, said.
A professor of Economics at the University of Abuja, Peter Siyan, called on the National Assembly and the executive to make good laws that will attract investors and investments in the country, saying the urge for companies to want to leave the country is a result of lack of electricity and other critical infrastructure.
Siyan said, “There are so many issues to be looked into. One, the Ooni spoke about the non-inclusion of youths in decision-making. That they should be involved. We should also look at the issue of migration. That is, youth are migrating from the rural areas to the urban centres trying to look for white-collar jobs. And this job doesn’t exist.
“So, if adequate provisions are made for them at the rural areas, there will be no such movement. If people are moving to where the jobs don’t exist, hunger sometimes will lead them to crime and they will start joining kidnapping, robbery, banditry gangs.
“The Ooni is canvassing that youths be involved in decision-making because decisions are made without their input. So, it is like the elite are making decisions that suit them to the detriment of youths. The import is that youths are eventually neglected in the affairs of the nation.”
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However, as academics and experts continue to proffer suggestions on the way forward to the authorities, a taxi driver, Segun Oluwatobi, said he would always be guided by his elementary knowledge of demand and supply.
Oluwatobi, who operates his trade in Abuja, said he would increase the cost of his services as soon as the price of Premium Motor Spirit (PMS) was increased to N385 per litre.
Oluwatobi said, “As a taxi driver, whenever the price of petroleum product increases he increases his price in line with the same rate. Buhari thinks that he is wise to satisfy himself alone, but we will still charge the passengers to pay us. If they think that we will not do our business, even if they make it N500 per litre, that will not work. We must find a way to survive the hard times”.
