Anger, misery rise across Nigeria as naira freefall worsens

With the gains of a market exchange rate still a mile off, it’s all pain and more pain for Nigeria.

The level of anger and misery is rising around Africa’s most populous nation as the seeming endless depreciation of the naira causes pain and despair for Nigerians at home and in their businesses.

In the northern region of the country, frustration over the exorbitant cost of pilgrimage to Mecca is a major source of the anger, according to Muslim teachers and other religious leaders.

In normal times, about 95,000 Nigerian Muslims will participate in the annual pilgrimage. This year, data from the pilgrims welfare board show that only 16,000 have registered. At the more than N5.2 million cost per pilgrim, the expectation is that some of those who have registered will pull out for inability to meet the financial burden made worse by the devaluation of the naira.

The last time officials provided advice on what this year’s pilgrimage will cost, the naira was at 833/$ on the official market and prospective pilgrims were told they would be required to pay over N5 million each. At the current rate of N1,400/$, the cost per pilgrim will be well over N6 million.

A leader in one of the mosques in Kaduna, Nigeria’s fourth most populous state, says the hopelessness of Nigerians over the surge in the cost of pilgrimage brings back sad memories of the time in 1984 when Muhammadu Buhari had in his first coming threatened that there may be no hajji. The then New Nigerian newspaper carried the story with a banner headline titled “NO HAJJ IF”. The banner headline caused panic and sent reverberations across the Muslim north, forcing Buhari to retrace his steps.

For those who are not bothered by the rising cost of the pilgrimage, surging food and medicine prices cause disaffection across Nigeria. The 50kg bag of rice has hit N65,000, while a bag of cement has reached N6,000.

Other Nigerians have been hit with vastly higher school fees for children in schools abroad, with some parents now considering bringing their children back home as a result.

“People might have to start transitioning their wards abroad back home. At N1,900/£ how will they cope,” Tosin Olaseinde, a financial advisor, said.

Nigerians faced with incredibly high food prices are having to cut meals and seek cheaper alternatives.

Senior officials of electricity distribution companies around the country are reporting rising defaults in the payment of monthly tariff by consumers.

Businesses, which were already hit by rising inventory, now face the dire possibility of closing down their plants and shops in the face of sharply falling disposable income.

Muda Yusuf, chief executive officer of the Centre for Promotion of Private Enterprise, said the naira freefall is bad news for manufacturers.

“This is not good news for manufacturers, as most manufacturers are import-dependent. It will affect their prices and further stoke inflation,” Yusuf said.

Nigeria’s inflation rate rose to its highest in more than 27 years in December as food prices surged, exacerbating a cost-of-living crisis and piling more pressure on the central bank to raise interest rates.