• Wednesday, May 22, 2024
businessday logo

BusinessDay

Analysis: Political honeymoon turns into economic nightmare

tinubu and world record (1)

As the political honeymoon of President Bola Tinubu fades into memory, the harsh reality sets in: “Ẹ̀mí lókàn“, once hailed as a beacon of hope for many Nigerians, becomes an economic nightmare, with sobering macroeconomic indicators signalling economic distress.

These indicators are statistics that provide insights into the overall performance and health of an economy.

Behind this economic nightmare lies the aftermath of President Tinubu’s announcement during his inauguration—a decision to remove subsidies and unify the currency.

While initially praised for its boldness in tackling shady subsidy practices, this move unintentionally exacerbates the nation’s woes, akin to the ‘cobra effect’—wherein attempted solutions worsen or create new problems.

So pathetic! Nigeria has never been this bad, as the dissatisfaction shows on the streets of the nation.

In December 2023, a report released by the Nigeria Bureau of Statistics (NBS) sent shockwaves through the nation. It revealed that Nigeria’s annual inflation rate had surged from 28.20 percent to a staggering 28.92 percent within just one month. This significant increase of 0.72 percent in such a short period was alarming.

The NBS also highlighted that compared to December 2022, the headline inflation rate had risen by a worrying 7.58 percentage points. This stark contrast paints a grim picture of the country’s economic situation.

What’s even more concerning is the comparison to global inflation trends. Despite the economic challenges posed by the COVID-19 pandemic, global inflation remained relatively low at 3.25 percent in the pandemic’s first year, before climbing to 4.7 percent in 2021.

As inflation rates soar and wages remain stagnant, the cost of living becomes increasingly burdensome for ordinary Nigerians. Families across the nation are feeling the squeeze as they struggle to make ends meet amidst mounting economic pressures.

Read also: I will not set up price control board – Tinubu

Notably, President Bola Ahmed Tinubu was aware of the economic hardships during his speech addressing Nigerians some months ago. He stated, “The cost of fuel has risen, food and other prices have followed suit, households and businesses are struggling, and things seem anxious and uncertain.

“I understand the hardships you face. I wish there were other ways, but there are not.” – The hard way, the only way, so to say.

As the cost of living continues to soar, many Nigerians struggle to make ends meet. Adesua, a single mother of three residing in Ikorodu, expresses that every trip to the market feels like a battle against rising prices. “I used to be able to budget carefully and provide for my children,” she says with a heavy sigh. “But now, it’s a struggle just to put food on the table.”

It’s not just families like Adesua feeling the pinch. Small business owners, like Adeolu Samson, who resides in Mushin and runs a neighbourhood grocery store, are grappling with dwindling profits and mounting debts. “I’ve had to let go of some of my employees,” he admits, his voice tinged with regret. “But if things don’t improve soon, I don’t know how much longer I can keep my shop open.”

Political honeymoon
Food inflation and inflation rate

Over six months, from June to December, there was a notable spike in both food prices and overall inflation. Food prices surged by 34.35percent, indicating a sharp increase in essential goods costs. Meanwhile, overall inflation soared by about 26.90percent, signalling widespread price hikes across sectors.

Read also: Petrol subsidy nears N1trn monthly, bigger than when Tinubu came

This rapid rise in inflation highlights the economic nightmare on households, hinting at potential challenges in affording everyday necessities.

A commentator somberly remarked, “We’re teetering on the edge of a social crisis as everyday essentials become increasingly unaffordable for many Nigerians.” He emphasised the ongoing repercussions of the President’s decision, which continues to sow seeds of hardship across the nation.

According to the Nigeria Bureau of Statistics (NBS), the surge in food inflation is attributed to the rising prices of bread, cereals, oil, potatoes, yams, rice, fish, meat, fruits, milk, cheese, and eggs.

This paints a vivid picture of the challenges faced by ordinary Nigerians as they struggle with skyrocketing living costs and diminishing access to affordable nourishment.

In light of the current state of affairs, the economic and social fallout exposes a lack of preparedness on the part of President Tinubu for the adverse effects of his economic reform – the removal of subsidies.

Read also: Tinubunomics: Beyond currency shame!

The government’s sluggish response to the widespread repercussions is prolonging the economic woes affecting every sector. In this dire situation, an anonymous observer remarked that there are no winners; everyone is a loser.”

Oluremi Tinubu, the First Lady, addressed economic issues during her speech at the inauguration of a multipurpose hall named after her at a private university in Kano State. She emphasised, “Things are hard, but when I see those children standing on the streets, I see the removal of fuel subsidies is for their future.”

Continuing, she highlighted the need for change, stating that, “We can’t continue with business as usual. Certain events can change the trajectory of our thinking.” She also expressed her commitment to working for the people and her belief in the drive of the President to turn the nation around.

“It’s disheartening that our country’s economic growth has consistently been ‘jobless growth’ over the years—characterised by a lack of inclusive growth. Yet, another economic reform policy has plunged millions of Nigerians into hardship, with hunger prevalent, purchasing power diminished, and wages stagnant,” Adeleke Jamiu, an economist said.

Okenwa Valentine, a conglomerate businessman in Egbeda, expressed grave concerns about the state of the economy. “With the look of things, the economy is crashing drastically considering the persistent rise in inflation rates and exchange saga,” he remarked, fearing a potential exchange rate of N10,000/$.

He noted the daily decline in purchasing power, driven by escalating food prices. In response, he explained, “As for me, I have decided to draw a family tree in terms of feeding, and I’ve been trying to prioritise necessities to manage with just two meals per day instead of three.”

Valentine lamented the drop in the standard of living, expressing hope for an economic recovery to alleviate the threat of hunger. He described the distressing experience of walking the streets of Lagos and witnessing fear among fellow citizens. “In a nutshell, the cost of living is too high, especially for car owners,” he observed, highlighting the necessity to reconsider outings due to fuel expenses.

Reflecting on widespread discontent, Valentine noted, “There’s nothing more to say about the economy; everybody is angry. That’s why people talk rudely and harshly nowadays.” He underscored the critical issue of food scarcity, stating, “Food is what fuels the body system, and currently, food is the major problem in the country.”

Some groups of experts believe that the President and his cabinet are facing confusion regarding the direction of their economic policies. Despite frequent issuance of monetary authority circulars aimed at addressing economic challenges, macroeconomic indicators have failed to show any positive effects. Additionally, fiscal policies have been perceived as ineffective during this challenging period.

A source has issued a warning about the potential for social crises, highlighting the increasing pressure on citizens due to economic challenges. With over 269 days passed, the President’s tenure has been marked by widespread grievances across the country, yet there remains a lack of clear direction or strategy for the way forward.

Are we really sure that with all these hardships there will be a green light at the end? Because the President Tinubu is still not hitting what is expected rather still playing politics at this dangerous point. Concerns of a group professionals update forum.