Under pressure from increased cost of living, Nigerians lose faith in government

Nigerians are increasingly losing confidence in government as rising cost of living puts pressure on their incomes and lifestyles.
From small business owners to large ones who spoke with BusinessDay, the common denominator is that of despondency that has left their businesses in a suffocating environment. They are also being bogged down by extra costs imposed by government as a result of decayed infrastructure.
The general consensus is that the Federal Government has not effectively positioned itself as an enabler of economic development that would inspire confidence in the citizens.
“It is not unexpected at this time if Nigerians are losing faith in government, considering the degree of deterioration in the quality of life and the transmission into macroeconomic variables. For an import dependent country, the level of imported inflation feeding from polarised exchange rate system is mounting enormous and debilitating pressures on prices, while wage rate remains the same.
Consumer spending power is overwhelmingly flagging as unemployment rate rises and corporates lay-off massively, in order to remain in business. The operating environment is undeniably very tough and stifling for businesses  and it does not appear that the government has a clue about what the issues are, nor have insight on how to get out of the economic conundrum, “says Robert Omotunde, head, investment research, Afrinvest.
Bismarck Rewane chief executive officer, Financial Derivatives Company, attributes part of the problems to conflicts between vested interests and national interest.
The economy, according to Rewane, in the Lagos Business School (LBS) breakfast meeting note for February, “is strangulated by pricing distortions in the forex market, as well as being exacerbated by delayed and inadequate policy decisions.”
He also alluded to the inconsistency and political interference in monetary policy environment, resulting in the erosion of investor confidence and dwindling capital inflows.
“Nigeria will be more prone to inflation than recession.” What the CBN should do is monitoring of M1 movements and dynamics, as well as more scrutiny on the banking system.
“In the past year, the surge in price level has been attributed to foreign exchange supply shortages and cost push factors but right now, looking at the growth trend of narrow money, the threat of increased inflation is now even more eminent,” he said.
Prices of bread, meat, fish, oil, yam and other essential commodities, last month, became increasingly unaffordable for Nigerians, as the inflation rate rose for the 15th consecutive month to 18.72 per cent, according to the National Bureau of Statistics,(NBS).

Also, the dream of many Nigerians to own their own homes continues to fade as prices of building materials rise astronomically, following a cost-push inflation that has driven commodity prices beyond the reach of most consumers.

The price of  50 kilogrammes of Garri, rose by 285 per cent to N15, 000, last month, from N3, 900 in January last year. Similarly, 50 kilogrammes of beans that sold for N13,500 in January 2016, rose by 33 per cent to N18, 000 last month.

Driven principally by the impact of naira devaluation and increase in prices of petroleum products, prices of goods and services have been rising persistently since 2015, with the inflation rate, which is the rate of increase in prices, rising from 9.3 per cent in October 2015 to 18.55 in December 2016.
The naira has continued to depreciate at the parallel market, in spite of the steady rise in the nation’s foreign reserves. The Nigerian currency lost three points at the parallel market to exchange at N510 on Thursday, after closing at N507 on Wednesday.
Investors’ optimism about Nigeria’s stocks has reduced considerably,  with the  equities  being the cheapest in Africa.

President Muhammadu Buhari, whose current term ends in 2019, pledged to increase economic growth to 10 percent and create 1 million jobs annually, when he asked Nigerians for their votes two years ago.
While Buhari remains in the U.K. for medical tests, some group of Nigerians and civic-group coalition had called for protests in Lagos and Abuja, against worsening economic conditions.
Gross domestic product probably contracted 1.5 percent in 2016, according to the International Monetary Fund, and the unemployment rate has climbed every quarter since the end of 2014, to 14 percent in the three months through September.