Young Nigerians usually joke that if anyone explains Nigeria to you, and you understand it, then something is wrong with you. That joke captures the intricacies, and complexities of most things Nigerian. Basic policies become complex as soon as they are domesticated for Nigeria. For example, every Nigerian was turned into a petroleum expert a few weeks ago, from premium motor spirit to compressed natural gas.
Then we all became power sector engineers, taking crash courses on factors that could lead to the daily failures of the national grid. I think this week will be devoted to tax reforms. Little wonder GenZ people say that surviving in Nigeria should earn one a lifetime award.
I was studying the latest figures from the National Bureau of Statistics, NBS, and I wondered what fuels the optimism being mouthed around government circles. This government unarguably has scored so many 'firsts' that they deserve an award. From being the first to have fuel sold above N1000 to being the first to push naira over the N1000 threshold to the dollar. Inflation which started edging upwards to 32.17 per cent, up by 0.55 per cent from 32.15 per cent in August 2024 aptly reflects the rise in the price of Premium Motor Spirit (petrol) to N1030.46 per litre in September, marking the first time petrol prices in Nigeria were above the N1, 000 mark. Not to be left behind, cooking gas prices also rose by 1.49 per cent in September 2024.
Nigerians were informed that fuel scarcity was caused by inadequate pricing, and that removing subsidies and deregulating the process could lead to product availability, albeit at a higher cost. Nigerians accepted. Not that they had a choice. They have been cowed into acquiescence such that irrespective of any policy the government of the day throws at them, not even a whimper would be uttered.
Yet with every increment, availability is still a challenge. I can bet that the government through the NNPCL is testing the waters; the price would still nudge upwards. Unfortunately, the price of crude is dropping at the international market, but this is not reflecting on the retail price in Nigeria.
Regretfully, the economic management team is completely oblivious to the negative effects their ill-advised policies are having on the overall economy. A country that is having runaway inflation, which is at a historic 28-year high, is busy churning out policies that exacerbate the inflation rates, worsening the economic situation, and pushing millions into extreme poverty as the economy shows signs of early tanking!
Proponents of the stifling economic policies cajole us that these are tough but necessary decisions that must be taken to turn the economy around.
However, nobody seems to be cognisant of the overall impacts of these harsh economic policies on the people. The vast majority of people who fall out of the economic circle and are destined to live in poverty--many of whom may never be able to recover--are ignored.
There is a Yoruba proverb that challenges the rationality of using a medication to treat a headache that necessitates head amputation. During the World Economic Outlook, WEO, presentation recently in Washington, Pierre-Olivier Gourinchas, the International Monetary Fund, IMF, Director of Research and Economic Counsellor, may have said as much by accident or by thought. He cautioned that "excessive austerity could hamper economic recovery efforts" and emphasised the necessity of striking a balance between fiscal and monetary measures in order to address issues of inflation and debt.
He said: "You have to be careful because most countries have important needs when it comes to spending, whether it is about essential services, healthcare, or public investments. If you try to do too much too quickly, you might have an adverse impact on growth."
As if he were warning the Nigerian authorities, the IMF Director added that Nigeria's economic growth has slowed and is expected to grow at 2.9 per cent in 2024, which is the same growth pace recorded in 2023. This is a decrease of 0.2 per cent from the previous projection in July and a 0.4 per cent decrease from the earlier projection in April 2024. This, according to the IMF, reflects slower growth in the country, amid weaker-than-expected activity in the first half of the year.
We don't need the World Bank or the IMF to inform us that the economy is in bad shape and that economic activity has slowed down. In addition to the hundreds of minor traders who have turned their money into housekeeping funds in order to live, no Nigerian can identify more than five business owners who have shuttered their doors this year alone.
It is incredulous that we have yet to attribute the economy's slower growth in the second half of this year to the significant decline in economic activity brought on by the high cost of fuel, which has impacted not only the cost of energy but also transportation, the movement of people and goods, and most importantly, the cost of logistics, which is primarily the transportation of food from the hinterlands to the cities. All of them are directly to blame for the historically high rate of inflation that began to rise again in August and September.
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Since we still live in a society where in-person interactions foster stronger bonds, policies that restrict people's freedom to travel also have an impact on their economic activities. Furthermore, almost all additional ancillary expenditures are directly impacted by high transportation prices.
Government and quasi-government organisations throughout Nigeria subject Nigerians to some of the most egregious economic dehumanising policies on a daily basis. The phrase "feeding from hand to mouth" has never made more vivid sense than the lives of average Nigerians, who currently live day to day.
*Deca, a journalist, and public affairs analyst,wrote from Lagos.
