If the past offers any reliable data to predict by, then the naira hasn't yet hit rock bottom.
...until the Nigerian government begins to implement effective policies that strengthen the naira, Nigerian citizens are in for a hard time for the foreseeable future. Nigerians are already trying their hardest to adapt to these unreasonable costs of living. The government must play its part by providing targeted support for lacking populations and executing responsible fiscal management alongside viable monetary policies to stabilise the weak naira and lay a foundation for long-term economic development.
At the time of writing this article, the naira had risen to over N1,230 in exchange for a single US dollar, the highest ever recorded in Nigeria's history. A few years ago, saying that the naira would ever trade at over a thousand to a single dollar would have sounded like a dream. No one could foresee it. Yet here we are. To say that the fast-rising deterioration of the naira has wrought untold hardship on Nigerians is understating the situation. With Nigeria being a state with very few exports outside crude oil and one that is highly dependent on imports, the ever-weakening naira has made trade and importation very difficult. The effect of all this is that an astronomically high cost of living has been forced upon all Nigerians.
The rapidly rising costs of living have begun to force Nigerians to radically adjust the way they live and work. Every day, we are forced to develop innovative ways of cutting costs in this increasingly tough economy. So, for instance, owing to the sky-high prices of fuel, a lot of car owners have stopped driving their cars and now prefer to commute via public transportation or ride-hailing services. A number of companies are increasingly switching to hybrid or completely remote systems of work in order to cut costs. Not everyone is so lucky, as there is a significant number of Nigerians who are not fortunate enough to have the option of going remote, yet transport costs to their current jobs eat too deeply into their salaries. They are left with no option but to resign and begin the gruelling and uncertain process of seeking new employment.
So yes, we see how the ever-rising cost of living in Nigeria is forcing its citizens to develop coping mechanisms every day in order to survive. However, when it comes to the cost of food, the agony touches Nigerians on a different level. Just a month ago, a cup of rice cost about N500. Today, you can't get it for anything less than N800. The same goes for a cup of beans. The reason this matters is that Nigerians already spend the majority of their incomes on food. Data from Picodi, an international e-commerce organisation, has revealed that the average Nigerian household spends 59 per cent of its income on food. According to data from a statistical analysis carried out in 105 countries of the world, aimed at discovering how much people spend on groceries, Nigeria ranked number 105 - the highest - in the world. To put this in better context, the global average for the percentage of household income spent on food is 11 per cent.
This gap between the global average and the local average is alarming. And what makes this fact only more worrying is that this report was from over two months ago. The cost of food has risen since then. Prices of foodstuff are still rising in a state that has already been eaten so deeply by food insecurity. When a state that is already plagued by record levels of poverty and hunger is threatened by even more poverty and hunger, the ripple effects cannot be anything but deadly.
In the absence of gainful employment for many Nigerian youth, as the suffering becomes unbearable, many will inevitably be pushed into crime. The lowest hanging fruit for many is cybercrime, popularly known as Yahoo Yahoo. Cybercrime or fraud is already a widespread phenomenon in Nigeria. In fact, it is practically a staple of Nigerian culture at this point. From several songs celebrating it to the populace idolising those who practice it, cybercrime has sadly become a cancer that has devoured Nigerian society, particularly the demographic of the male youth.
From N150 to $1 to N500:$1 and N800:$1, Nigerians remained in disbelief as they watched the naira weaken and fall over several years and across different governments. And no matter how many governments have promised to turn the economy around, the downward trend has not stopped. Thus, it would be foolhardy to expect that the naira will suddenly reach a new record low, change its mind, and start climbing upwards. No! Unfortunately, it could still get much worse.
As inflation worsens and costs of living rise, this disturbing cancer called fraud is only going to eat deeper into society. It was only last week when Justina Tiffany Otuene, a 300-level Biochemistry student of the University of Calabar, was killed by her boyfriend, who was a student of the same university. It has been alleged that the murder was a ritual killing. Again, on the 20th of October, robbers stormed three banks in Otukpo, Benue State, and killed seven people, two of who were security operatives. The three banks include Zenith Bank, First Bank Plc, and United Bank for Africa.
This ghastly wave of crime and scares is just a symptom of a deeply rooted illness in the Nigerian system. Fraud, ritual killings, kidnappings, robberies, organ trafficking, and child trafficking are the gruesome crimes that epitomise the Nigerian condition -- a reflection of the new normal. As more and more people get thrown into poverty, more Nigerians will be forced into crime. And while we can spend all day debating whether poverty justifies people turning to crime or not, the fact remains that poverty makes it increasingly harder for men to survive. When men are forced to choose between harming others in order to survive and starving to death, between their survival and the survival of others, many will be forced to choose themselves.
At this juncture, it is critical to point out that this is not a justification for crime. Cyberfraud, ritual killings, kidnappings, and all other crimes and condemnable and are, in fact, mostly caused by greed. What this argument simply aims to point out is that when a government repeatedly makes poor decisions, it accumulates and creates a harsh environment that will inevitably enable the worst of human nature. Nothing justifies these wicked acts. People must always strive to earn an honest, crime-free living. But the government must not make this noble pursuit more difficult than it already is.
Sadly, the government has failed to ensure this. So we must now have a conversation about what the people themselves must do. It is often a customary Nigerian reflex to hold out hope. To hope that things will get better. Will the exchange rate rise to N1,300 naira to a single dollar? We all certainly hope not. But it is submitted that sitting on our asses and hoping is not the wisest thing to do. It is not even the wisest hope. If the past offers any reliable data to predict by, then the naira hasn't yet hit rock bottom.
From N150 to $1 to N500:$1 and N800:$1, Nigerians remained in disbelief as they watched the naira weaken and fall over several years and across different governments. And no matter how many governments have promised to turn the economy around, the downward trend has not stopped. Thus, it would be foolhardy to expect that the naira will suddenly reach a new record low, change its mind, and start climbing upwards. No! Unfortunately, it could still get much worse.
For starters, it would seem that the ever-weakening naira has defeated the conventional wisdom of "delayed gratification". If everything gets more expensive, waiting to buy automatically becomes a bad financial decision. For the foreseeable future, it is probably best if you purchase everything you want to buy as early as you can, rather than delaying and paying more for these down the line.
Thus, Nigerians must steel themselves and shift their minds from conversations about hope to conversations about how to prepare for the worst. And how do we prepare for the worst? Well, Nigerians have already started adopting several cost-saving measures, such as going remote and using alternative modes of transportation.
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For starters, it would seem that the ever-weakening naira has defeated the conventional wisdom of "delayed gratification". If everything gets more expensive, waiting to buy automatically becomes a bad financial decision. For the foreseeable future, it is probably best if you purchase everything you want to buy as early as you can, rather than delaying and paying more for these down the line.
Also, since the majority of our incomes are spent on food and non-alcoholic beverages, it is recommended that Nigerians start to make their purchases in bulk. Cutting down on unnecessary expenses, such as eating out, also helps to cut costs. Beyond that, Nigerians must take extra precautions with regard to their security and the security of their finances. Not only are ritual killings, robberies, and kidnappings going to go up, but the rate of fraud attacks as well. We must guard our financial details with utmost care and be careful with our movement.
In conclusion, until the Nigerian government begins to implement effective policies that strengthen the naira, Nigerian citizens are in for a hard time for the foreseeable future. Nigerians are already trying their hardest to adapt to these unreasonable costs of living. The government must play its part by providing targeted support for lacking populations and executing responsible fiscal management alongside viable monetary policies to stabilise the weak naira and lay a foundation for long-term economic development.
PS: This piece was written in Gboko, Benue State. I am grateful to Professor Zack Gundu, Vice-Chancellor University of Mkar, who generously provided the space and the inspiration.
Toyin Falola, a professor of History, University Distinguished Teaching Professor, and Jacob and Frances Sanger Mossiker Chair in the Humanities at The University of Texas at Austin, is the Bobapitan of Ibadanland.
