The anatomy of inflation: A letter to Mr President

Dear Mr President,

I write to you today in the spirit of the recently celebrated Democracy Day.

It is to address the growing concerns about inflation in our beloved nation and its profound impacts on our economy and populace. The consistent increase in interest rates on the money in the bank, as pursued by the Central Bank of Nigeria (CBN) Governor, has not only failed to stabilise the economy but also continues to harm it. Rather than implementing monetary policies that encourage savings and investments within our banking system, we are witnessing a series of decisions that are counterproductive.

The devaluation of the naira has created a hostile environment for multinationals, leading to their steady exodus from Nigeria. Their earnings, significantly diminished in value, no longer justify their presence here. This economic instability is a direct result of insensitive governance, particularly during critical discussions about the minimum wage. Instead of addressing the economic plight of our citizens, attention is diverted to inaugurating a new residence for the Vice President—an act perceived as extravagant and out of touch with the people’s struggles.

The high cost of governance, exacerbated corruption (whatever happened to Betta Edu and Yahaya Bello), and wasteful spending on international trips just add another layer to our economic woes. The Climate Change COP26 summit last year, the earlier meeting in the United Kingdom hosted by the Accountant General, and the International Labour Organisation conference attended by 289 Nigerians are examples of such expenditures. These trips, coupled with the continuous depletion of our external reserves, signal a need for urgent fiscal responsibility.

It is imperative that the Accountant General announce new public procurement rules and that the CBN Governor introduce measures to encourage funds to remain within our banking system. The Nigerian people are bearing the brunt of current policies, and it is time for members of the National Assembly to demonstrate a sense of responsibility by stating sacrifices they are willing to make. It is unacceptable that our lawmakers are among the highest earners in any democracy globally yet continue to levy ministries and parastatals while cornering contracts for personal gain. Something has to change.

Let us shift our focus from ineffective monetary policies and the high cost of governance to performance management. A recent meeting with the Commonwealth Trade Competitiveness Department highlighted a critical issue: despite a formal request from the department communicated to the responsible minister in April, there has been no response. This lack of action is the reason for delays that have affected our participation in initiatives like the Africa Continental Free Trade Area (AfCFTA) and the Guided Trade Initiative (GTI), relegating Nigeria from a leading role to that of a late adapter, always playing catch-up.

In Nigeria, every minister, senator, and House of Representatives member has a retinue of senior special assistants or special assistants. What are their roles? Who is providing the research, analysis, and insights necessary for effective governance? Let me give the example of the calls by the African farmer Mogaji, warning about the food crisis and recommending steps to mitigate it. Who will capture such input? What will you do about your non-performing appointees? The economy is in need of emergency solutions; it can no longer wait for ministers in training.