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The cost-of-living crisis has a global toll

Last week, thousands marched in the streets of London to protest the soaring cost of living in Britain and demand the government do more. The story was the same in Italy, in Israel, in Australia, in Germany – where workers are on strike, demanding the government ‘Stop the Inflation Monster’.

Nigeria is no exception. As the horrors of Covid-19 started to recede, our globally connected world has been hit with a new pandemic: the cost-of-living crisis. The price of staples such as cooking oil and maize flour is rising sharply at a time of heightened global demand and increased shortages due to the Russian invasion of Ukraine; the effects of drought and flooding; and the sky-high costs of fuel and energy.

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Inflation is surging in countries around the world, from the United States, where the US Central Bank is determined to bring prices down but warns that goal ‘depends on factors we don’t control’; to India, where inflation is having a disastrous effect on the tiny budgets of families already on the breadline as they seek to recover from the economic effects of Covid as well as the recent record-breaking heatwave. India, producer of a third of the world’s wheat supplies, has had to block exports in the face of domestic food shortages.

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Australia has seen rising fuel, energy and food prices after recent floods ruined crops and the price of fertilizer rose 120% since 2020. A bleak winter is on the horizon for them as power prices soar and increase inflationary pressure.

In the Philippines, workers can no longer afford the fuel to get to work and steep food prices mean many are going hungry.

In the United States, businesses and consumers tell the same stories – pandemic-related supply shortages, rising gas prices and soaring demand have collided with the impact of the war on Ukraine and weather-related issues to create a real crisis for the ordinary man.

The pain suffered by people here today is not local to Nigeria, it is a pain suffered by all people across the world whether their governments are left or right, democracies like ours or dictatorships, whether they are the world’s richest economy or one of the poorest. Citizens of the world are struggling today to pay for the essentials as we rebound from the humanitarian and economic devastation of the pandemic.

This global systems failure is hard for the average man, or woman, in the street to grasp. As they struggle to feed their children, put fuel in their car, keep their businesses solvent and their hopes and dreams on track, it is easy to look to local government leaders as the cause of their pain and anger and seek to blame them for the current situation.

However, just as no country was immune to the coronavirus, in the 21st century, no country is immune to this new global cost-of-living pandemic.

Nevertheless, there is cause for optimism, as the world came together to defeat Covid, so we will come together to forge a way out of the current crisis, through cooperation with our close neighbours, with the Commonwealth and the newly strengthened allegiances with our traditional western allies and international partners.

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But resolution also depends on strong actions at home: Nigeria’s ambitious infrastructure developments will help set the country on strong foundations for sustainable and equitable growth. We have faced international criticism in recent years for our focus on boosting domestic manufacturing and production. Yet today, all countries are thinking again about the importance of their energy and food independence and security.

Nigerian initiatives to protect our farmers against unfair competition from subsidized imports have boosted our rice production to the point where imports are near zero. And more is still to be achieved. We still struggle against the protectionist policies of blocs such as the European Union which undermine Africa’s self-sufficiency – but the EU, as they close the door on Putin’s Russian gas, will need to step up and end their hypocrisy on green energy policy. Africa’s abundant energy resources offer a clear solution: with UK and EU investment, our planned 4,000 km pipeline will bring Nigerian gas to Europe.

Here at home, we have recently voted through a bill that will allow state governments to generate and transmit their own electricity. We are also decentralizing the national grid through renewable driven mini-grids.

Despite calls from the IMF and World Bank to remove the fuel subsidy, Nigeria has resisted a move that would double the price for citizens overnight with untenable human consequences. Instead, a focus in boosting our refinery capacity will ramp up in the next 24 months as new companies come on board.

These upticks in domestic food and fuel production will both help diminish the threat of inflation, and our transport infrastructure developments in road and rail will alleviate many of the difficulties of food distribution.

The coming months will be hard – for the world not just Nigeria – as the cost-of-living crisis exacts a global toll.

 

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