How President Buhari can fix Nigeria’s inflation problem [Pulse Editorial]
The Nigerian economy has been heading south since Buhari took over in 2015. It's time to hit reset.
President Buhari at sea as the Nigerian economy crumbles around him
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Headline inflation currently stands at 17.33% from 16.47% in January, food inflation now stands at 21.79% from 20.57% in January.
Core inflation is at 12.38% from 11.85% in January and 23 million Nigerians are currently unemployed--current jobless rate is pegged at 33.3% by the NBS (National Bureau of Statistics).
For context, 17.33% is Nigeria's highest double digit inflation rate since February 2017.
A weekly visit to the grocery store down the road or the food markets, underscores the fact that Nigeria’s inflation isn’t just galloping, it has since spiraled out of control.
A crate of eggs which cost N900 just a few weeks ago now goes for N1,400, a carton of onion/chicken Indomie noodles went from N2,300 to N2,800 in a few weeks and a bottle of C-Way dispenser water which cost N500 last year now goes for N650. A bottle of Coca Cola or Pepsi now goes for N120 from N100.
Everywhere you turn, costs of household items and foodstuff like rice are spiraling out of control and a nation where a quarter of the population or more is unemployed cannot continue down this path. Something desperately needs to give.
We are here because of some of President Buhari’s ruinous economic and protectionist policies, the novel coronavirus pandemic and the lockdowns that came with it, a slump in the price of crude oil in the international market for much of 2020, a domestic economy that isn’t producing enough to fend for the local population, growing insecurity across the land and a Nigerian economy that is essentially an import-dependent one.
As a consequence, the Naira continues to weaken considerably and embarrassingly against foreign currencies like the dollar and pounds sterling, compounding the woes of the Nigerian populace.
The solution
To get out of the hole and rut we’ve dug for ourselves, we have to seriously diversify the Nigerian economy away from energy proceeds, beyond banal rhetoric spewed at every government forum.
When Gross Domestic Product (GDP) improves, the Naira will appreciate and foreign reserves will be strengthened.
Government has to empower farmers to produce sufficient food for local consumption and ensure that these farmers have storage facilities to guarantee food security all year round. Something has to be done as well about our agro-processing or agro-allied value chain.
We also have to invest in irrigation farming to ensure that there is sufficient food supply for the markets in and out of season.
While encouraging local production, the Buhari administration has to ensure that there is healthy competition among players who desire a pie of a 200 million-strong Nigerian market--be they local or foreign.
We cannot strengthen the Naira by closing our borders or by sending wrong, protectionist messages to foreign investors and allies.
If we insist on consuming what we produce, Buhari and his team have to encourage local manufacturing, small and medium enterprises and the private sector like never before. This will include cutting taxes and waivers due to some firms, providing infrastructure especially around rural communities where the food is produced, and empowering young people to contribute in one way or the other to GDP.
Lastly, as long as we keep recording cases of terrorism, banditry or kidnappings every other day, our economy wouldn’t grow.
A lasting solution has to be sought for the farmers-herders crisis and people who do business in our country have to be assured of their protection and safety by the state.
We’ve got to return investor confidence to our flailing economy and the government has to continue to provide the right kind of environment for businesses to thrive.
We are in a big hole with our damning economic numbers. It’s time to stop digging!
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*Pulse Editorial is the viewpoint of the editorial desk at Pulse. It does not reflect the views of the Organisation Pulse.
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