Inflation is eating deep into many pockets to an extent that a former colleague was called to compare notes on the rising cost of living. We conversed for almost one hour about the impact of inflation on our pensions. Almost at the end of our conversation, I asked him which class in the society does he think that we belong in retirement.
He simply told me that we both belong to the middle class. How did he arrive at grouping us in this class? He simply told me the problem was rising inflation. It is inflation that has reduced the purchasing power of our local currency – the naira – and what it can buy.
Since the beginning of the year, we observed that the cost of everything from food to sachet water has been rising. With rising inflation, the cost of living has become increasingly expensive for the middle class, as the cost of core services and goods such as housing, electricity, food, fuel and transportation have risen faster than income. This makes the purchasing power of a large number of Nigerians to crash.
As an engineer, I did not know that inflation is very deadly until this year when it was published that the country’s inflation remains double – digit. Inflation, we have been told by our bureau of statistics, has hit 17.71percent in May 2022, while food inflation is 19.5 percent during the same period. It is also a fact that the country’s foreign exchange management has not succeeded in stabilizing the naira after defending it with millions of US dollars. That is why one US dollar is N440 officially and N609 in the parallel market.
Who are those in the middle class? “They are individuals and households who fall between the working class and the upper class within a society. They are educated – mostly college or university degree holders with more income for consumption and may own a house
It is true that millions of Nigerians are living in extreme poverty according to the data from the World Poverty Clock of the Brooking’s Institute. Or, is it not true that Africa’s largest economy has 56.1 percent unemployment and underemployment according to our bureau of statistics? It is true, and also right that the price of diesel and aviation fuel have increased considerably. While electricity bills and cost of transportation have gone up.
It is equally true that minimum wage in the country remains N30,000 but not paid by all the states. It is true that more than ten million children are out of school. It is true that our medical facilities are decaying while medical tourism annually cost the nation billions of dollars.
Who are those in the middle class? “They are individuals and households who fall between the working class and the upper class within a society. They are educated – mostly college or university degree holders with more income for consumption and may own a house.
They are professionals who work in industries and public service. The middle class is the largest group in most countries and the driving force beyond economic growth because of their level of education.
Globally, it is projected that this group will reach 4.2 billion by 2022, representing 53 percent of the world population. That is why the middle class is considered by experts as the “centre of economic activity.”
A recent survey by the African Development Bank shows that the middle class makes up about 23 percent of the population in Nigeria. They are well educated according to the report – 92 percent have obtained post – secondary education or have studied at an institution of higher learning. This notwithstanding, about half of the 200 million population are poor.
Most flourishing and stable economies are those that have continuously grown the size of their middle class, increased consumer spending, and attracted Foreign Direct Investment with the right policies. When the middle-class families can no longer afford to buy goods and pay for services that businesses can provide, the entire economy goes through a tough time. While politicians see a thriving middle class as part of the dividend of democracy, a strong middle class is actually a source of economic growth.
Nigeria’s middle class has been shrinking as rising inequality pushes more households into the upper- and lower-income brackets. As a matter of fact, the insecurity Nigeria faces today is as a result of the diminishing middle class. Indeed, over the years, the middle-income households have experienced dismal income growth or even stagnation in the country.
The past decade has been very tough. This has fuelled growing perceptions that the current socio-economic system is unfair and that the middle class has not benefited from the country’s economic growth in proportion to its contribution. Hence, the exodus of professionals out of the country in search of a good life. Yet, our policy makers are watching as we reverse transfer our indigenous technology to foreign countries.
Imagine that you are a worker or retiree whose children are just graduating from college or higher institution without a regular salary or pension. We find a situation in which many parents uncertain of their own prospects are also concerned about those of their children.
Are we able to say that our generation is one of the most educated in the society today, when the education system is not something one can be proud of? And yet many of our youths have lower chances of achieving the same standard of living as their parents. So, you find situations where parents still find pocket money to give to their children who are graduates that are unemployed and, in some instances, underemployed.
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Why do we need to focus on the middle class? For this writer and many Nigerians above the age of 60 years, the middle class used to be an aspiration. For many generations, it meant the assurance of living in a comfortable home, and affording a rewarding lifestyle, thanks to a stable job with career opportunities. It was also a basis from which most families aspired to a better future for their children. At the macro economic level, the presence of a strong and prosperous middle class support healthy economies and societies.
How do you identify someone in the middle class? Through their consumption, investment in education, health and housing, their support for good quality public services, their intolerance of corruption and their trust in others, are all the very foundations of inclusive growth. What about trust in leadership? The trust of citizens in leadership is dependent on the quality of leaders that are managing the affairs of the country.
Trust is the foundation of leadership. However, there are new signs in the polity currently which indicate that what can be regarded as the bedrock of our democracy and economic growth is not as stable as they ought to be. Are middle class being scraped out in Nigeria? Yes, on the average because the economic influence of the middle class and its role as the “center of economic gravity” has been weakened over the years.
Today, as poverty permeates the fabric of the society, the middle-income group has grown smaller with each successive generation. In those days, most Nigerians enjoyed more stable jobs during their working life than younger generations. But now, the middle class is under serious pressure.
In fact, the middle class is shrinking and being squeezed. We therefore advocate those economic reforms particularly in education, health and housing that will improve the lifestyle of the middle class. More importantly, policies should aim at tackling vulnerabilities at the grassroots. Thank you.
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