From plenty to poverty: Nigeria’s descent into economic chaos

For Nigeria, the cost-of-living crisis is no longer a policy concern but an urgent humanitarian issue. From food and healthcare to housing and transportation, costs have surged beyond the reach of ordinary Nigerians. The inflationary tide that began with the fuel subsidy removal and currency float in June 2023 has swelled into a storm, drastically reducing purchasing power across the nation. For a country rich in resources, this situation exposes severe structural flaws, compounded by policy inertia and inefficient responses.

Food inflation stands at the heart of Nigeria’s economic dilemma. Despite government rhetoric and recent declarations of a “state of emergency” on food security, inflationary pressures have only intensified. Nigeria’s food inflation rate rose from 26.98 percent in July 2023 to a staggering 37.77 percent in September 2024, underscoring the ineffectiveness of existing measures. The country’s reliance on imported staples, limited agricultural output due to insecurity, inadequate storage, and supply chain breakdowns have left the population vulnerable to volatile global markets.

“The country’s reliance on imported staples, limited agricultural output due to insecurity, inadequate storage, and supply chain breakdowns have left the population vulnerable to volatile global markets.”

The government’s declaration in July 2023 promised robust interventions, from National Commodity Board efforts to stabilise prices to increased coordination between the agriculture and water ministries. These plans, however, remain largely theoretical, and Nigerians continue to pay the price for poor follow-through. The country’s food production remains insufficient to meet demand, and critical staples like wheat and rice are imported in vast quantities to fill the gap. Nigeria only produces a small portion of the wheat it needs each year, according to latest statistics, which increases its reliance on imports and exposes it to global price swings.

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These systemic issues are compounded by policy gridlock. For instance, the government’s much-publicised duty-free import policy for staple foods, aimed at providing temporary relief, remains stalled in implementation. The Nigeria Customs Service claims it awaits further directives, but there is speculation that fiscal concerns are causing delays. If true, this raises serious questions about the government’s priorities: are immediate fiscal revenues more important than affordable food for Nigerians? In a country where over half of household income is already spent on food, this bureaucratic inaction borders on negligence.

Nigeria has options, even within the constraints of its current challenges. One immediate step could involve leveraging the African Continental Free Trade Area (AfCFTA) to import staple foods from neighbouring countries at reduced costs. Expediting the duty-free import of essential food items could offer some relief to households while structural issues are addressed. Long-term solutions, however, demand a holistic approach: stabilising domestic agriculture by investing in infrastructure, facilitating access to finance, and strengthening land administration must be prioritised.

Furthermore, Nigeria’s reliance on imported food underscores a need for strategic planning and a policy framework that incentivizes sustainable agricultural practices. Private sector partnerships, technological investments, and improved security measures in rural areas could significantly impact production and reduce dependency on imports. These are not new ideas, yet the urgency of implementation cannot be overstated if Nigeria is to weather this crisis.

The cost-of-living crisis is not only an economic issue; it is a litmus test for Nigeria’s governance. The government’s response, or lack thereof, will reveal whether it prioritises fiscal stability over the well-being of its citizens. A decisive commitment to implement the duty-free import policy could signal a willingness to prioritise the people’s immediate needs over bureaucratic hurdles. Nigeria’s leaders must put food security at the top of the agenda and act without delay.

In the face of mounting hardship, Nigeria must transcend rhetoric and demonstrate responsive governance. By placing the welfare of its people above short-term fiscal gains, the government can rebuild public trust and set the country on a path to economic resilience. To achieve this, the government should prioritise food security by implementing policies that incentivize domestic food production, such as providing subsidies to farmers, improving infrastructure, and investing in agricultural research and development.

Additionally, strengthening social safety nets to provide targeted support to vulnerable populations, promoting transparency and accountability, engaging with stakeholders, and investing in education and healthcare are crucial steps towards a more resilient and equitable economy.