It is most unfortunate and regrettable that social unrest is rising across the world, thus adding to already known risks in the global economy. As people return to work after the pandemic lockdown, we have seen anti-government demonstrations in developed and developing countries.
For example, Canada and New Zealand – two developed economies where social uprising is very rare have had a bite of anti-government demonstrations. We have equally seen several emerging and developing economies where dictatorship, high cost of living, poor leadership and constitutional crises have generated widespread protests.
Actually, it was predicted by the International Monetary Fund (IMF) that two important factors namely, COVID-19 pandemic and rising food and fuel prices, may be responsible for public frustration across the globe. While many countries are strategizing and exploring various policy options to avert doomsday, Sri Lanka had succumbed to its dilapidating economic crisis.
Nigeria mirrors Sri Lanka on all fronts – dwindling foreign reserves, unviable infrastructure funded with huge Chinese loans, rising imports, policy inconsistency, tumbling Naira and excessive public debt coupled with growing deficit
Sri Lanka, a South Asian country with similar economic history to many African countries including Nigeria, is the first country to fall in the face of global economic threat. It is a harsh reality for a country that has been growing with a rising and vibrant middle class to have its economic fortunes destroyed in a flash. This is always the case in any country with very few committed political leaders.
The case of Sri Lanka is so pathetic that some official buildings in Colombo had to be occupied by citizens of the country due to economic challenges. In other words, the country was in the grip of mass unrest over economic crisis. What one saw on the television screen was a picture of a frustrated, angry and hungry people with barely no alternative but to vent their anger on their political leaders.
Sri Lanka, an island with a population of about 21.5 million people, is having economic chaos that has led to protests against Mr Gotabaya Rajapaksa who resigned as President of the country. As the unrest continues, the President who ordered the military to restore peace and order ran away to Maldives and thereafter escaped to Singapore. He resigned as the president through email. But the citizens were adamant in registering their grievances. So, they vowed they were not prepared to leave all government buildings occupied until there was a change in political leadership.
Our respected readers may recall that protests started in the capital Colombo in April and spread across the country. Like it is the situation in many developing countries, Sri Lankans have been struggling with daily electricity power supply cuts and shortages of basics such as fuel, food and medicines. Inflation is currently above 50 percent in Sri Lanka. The country does not have enough fuel for essential services such as buses, trains and medical vehicles.
In fact, we read that the country does not have sufficient foreign exchange to import. The country’s foreign exchange shortages became a serious national crisis in early 2021. The purchasing power of Sri Lankans is weak while the lack of fuel has caused petrol and diesel prices to rise drastically. And the sale of fuel remains restricted. Schools have closed and the citizens have been directed to work from home in order to ration fuel supplies.
What happens to a country that runs out of money? Sri Lanka is unable to import goods it needs from abroad. And in May 2022, the country failed to make an interest payment on its foreign debt for the first time in 70 years. The government banned importation of chemical fertilizers. Farmers were told to use locally sourced organic fertilizers instead. The result was widespread crop failure. Consequently, Sri Lanka had to supplement its food stocks from abroad which impacted the foreign currency shortage negatively.
What does the future portend for Sri Lanka and the people? The confusion will remain for sometime in the country as the solution to the economic woes will not happen overnight. The future of Sri Lanka will depend on the goodwill of friendly nations and international agencies like the IMF. The country must be organized and disciplined, with credibility for international agencies to take her seriously. Sri Lankans need to settle down fast and remain focused on solutions. The earlier, the better for the crisis to be resolved.
We strongly believe that the Sri Lankan crisis presents an opportunity for Nigeria to appraise its political and economic realities. Nigeria, the most populous African country with a population estimated to be over 200 million, has the capacity to trigger a regional upset if it slips into economic and political instability.
Why do we think so? Nigeria mirrors Sri Lanka on all fronts – dwindling foreign reserves, unviable infrastructure funded with huge Chinese loans, rising imports, policy inconsistency, tumbling Naira and excessive public debt coupled with growing deficit. Insecurity is at its peak while the country is filled with tales of unexpected and unrestrained violence as a result of frustration of the poor. We should not forget that our beloved nation is still the poverty capital of the world.
Read also: CBN should focus on fighting inflation – World Bank
With overdrafts by the CBN which are not fully made public, the country’s national debt is about to exceed the N50 trillion mark predicted by economists. Whereas the debt to GDP ratio, at less than 40 percent, is among the lowest in the region, a large chunk of the earnings goes into servicing debts and the controversial fuel subsidy. All these are wrapped up with unrestrained official graft.
Many Nigerians have started throwing tantrums at political leaders as Sri Lankans have done in the past few weeks. Nigeria’s inflation is 18.6 percent, which experts claim is the highest in 5 years. But the economic challenges fuelling uprising in Sri Lanka is a constant reminder of the threat facing Africa’s largest economy. The same threat looms in other African countries too numerous to mention here.
It is expedient for our political leaders to take the right steps to make sure there is no social uprising in our society. Now, we are in another political season. INEC and political parties should take necessary steps to ensure that there is no rigging during the 2023 polls. The citizens have an opportunity once again to elect politicians who have the capacity to turn Nigeria into a prosperous country.
The lesson we must draw from the Sri Lankan crisis is that when people lack basic means of subsistence, when the local currency is grossly devalued, when there is dishonesty coupled with injustice, inequality and maladministration at all levels of government, when there is insecurity with safety of lives and property not guaranteed, the citizens can embark on civil disorder.
The political leadership must examine our realities and do something urgently to reverse the economic misfortune of most citizens. It is absolutely the responsibility of government to see to the welfare of citizens. No one prays for evil, but we do not know what problems awaits us tomorrow if necessary steps are not taken to alleviate the problems of the people. Thank you.
