Traders at Mile 12 Market, Lagos


The worsening economic crisis in the country has continued to have adverse effects on the citizenry, Business Hallmark findings can reveal.

The nation’s economy, BH recalled, had been in a very bad shape since 2016 when it recorded two recessions within four years (2016 and 2020).

The economy recorded its worst recession in four decades in 2020 when it recorded Gross Domestic Product (GDP) contraction of 3.62% in the third quarter of the year owing to the novel COVID-19 pandemi.

The situation is worsened by uncertainties in the business community, due largely to policy summersaults on the part of the administration of President Muhammadu Buhari who came to power on May 29, 2015.

For instance, the nation’s land borders were shut down for over a year, causing a huge damage to the country’s trade within the West African sub-region.

Also, exchange rates were regularly fixed by the Central Bank of Nigeria (CBN) until the interventions become unsustainable, prompting some form of flexibility in the determination of the exchange rate according to market forces.

These policy somersaults, coupled with rising insecurity, negatively affected the economy. In the agricultural sector, attacks by bandits, herdsmen and insurgents have led to the destructions of large swathes of farmlands, as well ss killing and maiming of farmers. The lucky ones have to flee to safety, resulting in severe food shortage and inflation across the nation.

Also, most manufacturing concerns could not access foreign currency through unofficial sources, forcing them to approach the parallel market for the scarce Forex at exorbitant rates. This led to the high cost of raw materials, which in turn affected the manufaturing sector and its outputs, with many of them unable to scale up production or recruit more hands.

Government’s inconsistencies and ineptitude, findings also revealed, caused capital flight. In the equities market, huge foreign portfolio investments were lost, with investors fleeing to safety with their funds. It also affected capital investments such as foreign direct investments and capital importation.

Apart from these hiccups, business owners have to cope with inadequate and dilapidated infrastructures like access roads and electricity critical to production.

The result has been inflation, job losses and the dwindling capacity to create jobs. Findings revealed that while millions of Nigerians have lost their jobs, those that are lucky to be retained have to cope with salary cuts and the ever rising cost of foodstuffs, commodities and serviced due to inflation.

According to the Nigeria Bureau of Statistics (NBS)), Nigeria’s employment rate rose from 27.1% in Q2, 2020 to 33.3% in Q4, 2020. In its last quarterly unemployment and underemployment report released in March 2020, the NBS said the computed national unemployment rate rose from 27.1% in Q2, 2020 to 33.3% in Q4, 2020, while the underemployment rate decreased from 28.6% to 22.8%.

The bureau put a combination of both the unemployment and underemployment rate for the reference period at 56.1%.

This means that 33.3% of the labour force in Nigeria (23,187,389 persons) either did nothing or worked for less than 20 hours a week, making them unemployed. This is an additional 1,422,772 persons from the number in that category in Q2, 2020.

Under the age-groupings, the highest rate of unemployment was recorded among the 15-24-year age-group with 53.4%, followed by those aged between 25-34 with 37.0%, together the youth population recorded an unemployment rate of 42.5%.

In the underemployment by age grouping, those aged between 55-64 recorded an underemployment rate of 25.7%, the highest amongst the age groups.

According to the International Labour Organisation (ILO), an acceptable level of unemployment should be 4% to 6%.

The World Bank in a report estimates that about 19 million Nigerians (300,000 per month) have joined the workforce over the past five years, but only 3.5 million jobs have been created during the period.

According to the bank’s Nigerian Economic Update, about 30 million new jobs will be needed by 2030 just to keep the current employment rate constant.

However, an online survey conducted by BH shows that 4 out of 10 (40%) Nigerians are currently unemployed. While 80 out of the 200 people that responded to the survey said they are currently out of job, another 60, representing 30% said they have been receiving half salaries since the advent of Covid19 in March 2020.

“I have been home since June 2020 when the effects of Covid19 lockdown manifested. All efforts to get another job had not yielded results. It is very difficult to survive now with my family of four. We can hardly eat twice a day. And when we have that grace, it is usually through the assistance of friends, family and church members.

“To make ends meet, I have to follow some street boys I used to assist when things were good to construction sites. Unfortunately, it is not everyday that we get work to do. If we are lucky, we are picked as ‘laboures’ three times a week.

“We are paid between N2,500 and N3,500 daily depending on our bargaining power with the owner or contractor.

“At other times, I used to trek between Agege, Ogba and Ikeja looking for daily contract jobs. When I am lucky to get one, I get around N3,000 at the end of the day”, declared Segun Obateru, a National Diploma (ND) holder in Lagos.

Another respondent, Moji Durosimi, a customer support supervisor with an haulage firm in Ikeja, Lagos, considered herself lucky to still have a job despite being placed on less than half salary since May 2021.

“The firm where I work was barely surviving before Covid19 hit in March 2020. We were being owed several months in arrears before the pandemic.

“However, things seems to change for the better with the coming of Covid19. The management called us to a meeting, explaining that it could no longer pay our full wages.

“We were begged to accept 60% cut in our pays. Some workers were angry and left, thinking they will easily get another job. I however stayed behind, despite the fact that I now collect N120,000, instead of the N300,000 I used to collect as salary.

“But the good thing is that the salary has been regular, unlike when they were owing us. Some of my colleagues who left in anger have been calling on me to bail them out.

“I thank God that I did not also behave foolishly and leave in anger. There is no job anywhere”, Durosimi noted.

Apart from loss of jobs and receiving half salaries, Nigerians are also battling with high cost of goods and commodities.

According to the NBS, prices of food rose in May to 22.28 per cent, compared with 22.72 per cent in April 2021. The NBS said the rise in the food index in May was caused by increases in prices of bread, cereals, milk, cheese, eggs, fish, soft drinks, coffee, tea and cocoa, fruits, meat, oils and fats and vegetables.

It added that on a month-on-month basis, the food sub-index increased by 1.05 per cent in May 2021, up from 0.99 per cent recorded in April 2021.

“The average annual rate of change of the Food sub-index for the twelve-month period ending May 2021 over the previous twelve-month average was 19.18 per cent, points from the average annual rate of change recorded in April 2021 (18.per cent),” the NBS noted.

Some Nigerians who spoke with our correspondent lamented the rising cost of foodstuff and other commodities, while calling on the government to urgently intervene.

BH checks in selected markets indicate that prices of several essential products and commodities in the country such like sugar, salt, bread, cereals, cooking oil, fish, flour, fruits, fresh or dried, meat and poultry, milk, nuts, vegetables, natural water and table water have gone up astronomically.

While prices of manufactured goods only increased from between 10 to 30 percent, the increment in agricultural products was huge and unexplainable.

For instance, the price of granulated sugar produced by Dangote Industries, Honeywell Nigeria and others have witnessed marginal increase.

While a 250g of the product which sold for N120 two months ago now sells for N150, a 1kg pack which sold for N350 some months ago now goes for between N370 and N400.

Also, a packet of noodle sold for N50 in February, is now N60 and N70, depending on the brand.

Likewise, the price of a packet of spaghetti which sold for N200/N220 in February, now sells between N270 and N300.

The same goes for carbonated drinks popularly called ‘mineral’ by many Nigerians. The product which sold for N100/50cl in April, now sell from N120 to 150, depending on the brand and seller.

In the grains category, the price of a bag of rice which sold for N22,000 to N24,000 two months ago remain the same.

However, there is a huge increment in the prices of agricultural goods produced in the country.

For instance, while a Derica measure of beans (Oloyin/Sweet) now sells for N550/N600, that of Drum goes for N480/N500 and White N500.

Earlier in the year, the products (beans) were selling for between N200 and N300.

Also, a 4-litre paint measurement of white garri now sells for between N,1200 to N1,700, as against N600/N700 earlier in the year, depending on the brand and quality. On the other hand, a bucket of yellow garri preferred by Nigerians from the South East and South South starts from N1,500.

Visits to some markets revealed that there is a significant increment in the prices of food items, At the Agege Market, Lagos, the price of cooking oil, vegetables, shoes and toiletries recorded between 40 and 45 per cent increment. For instance, a 5kg of cooking oil that was sold for N3, 000 in January 2021, now goes for between N3, 500 and N4, 200 depending on the brand.

The prices of kitchen utensils recorded about 40 per cent increment. Likewise, household items like sponge, shopping bags, cooking pots, among others, recorded about 35 per cent increase in price.

Another product that witnessed significant spike in price is frozen foods. A 20kg pack of panla which sold for N23,000 on February is now N31,000, while a 10kg chicken is now N20,000/N22,000. A kilo however goes for N2,000/N2,200.

A kilogramme of Turkey now sell for N2,200/N2,500, while a 10kg pack is now N28,000.

In Ogun State, foodstuff prices have increased by about 50 per cent in the last six months. For instance, a measurement (2 dericas) of beans which was sold for N500 in the past, now goes for N900 and N1,000, a bag of rice which was sold for N19,500 now costs N23,500; vegetable oil has moved from N18,000 per keg (25 litres) to N24,000, while palm oil which was sold for N10,000 now costs N17,500.

Likewise, garri which was sold for N300 as of January now goes for N700 per mudu (2 dericas).

“We are in deep trouble in this country. Garri supposed to be the food of the poor. But it is now unaffordable. If average Nigerians can’t afford to buy garri, then I think we are in a deep mess in this country”, said Alhaja Barakat Awale, a market leader at the Kuto Market in Abeokuta.

Experts believe that by the time the NBS released inflation rate next week, June food inflation will rise further.

Speaking on the high rate of unemployment/underemployment, the Managing Director/CEO, Highcap Securities, David Adonri, blamed it on socioeconomic conditions in the country.

“The increase in the unemployment rate of labour to 33 percent in Nigeria is not surprising. The prevalent socioeconomic conditions in the country are precursors to this parlours situation. If things continue the way they are, the situation can get worse.

“Nigeria degenerated to this dangerous level of unemployment owing to the absence of population control and excessive supply of unskilled labour.

“As a result of population explosion due to lack of birth and migration controls, the economy is overwhelmed with excess liquidity of people.

“Then, concerning the demand for labour, the economy lacks the required capacity to generate productive employment that can consistently mop up labour.

“Due to the absence of engineering infrastructure, the economy is unable to sustain itself internally, thus exporting jobs through pervasive import dependence. “Nigeria is an agrarian economy, but the recent breakdown of the rural economy due to widespread insecurity has worsened the country’s unemployment rate.

“Challenges to tackling rising unemployment rate are mainly from population explosion, absence of engineering infrastructure to support production and pervasive rural insecurity.

“The first two are age-long while the third challenge assumed an unprecedented dimension since 2015.

“While the first two challenges are inimical to full employment of labour and capital, the third factor deals with the employment of land.

“Analysis of these factors shows very clearly that all the factors of production are massively underemployed in Nigeria”, the Highcap Securities boss noted.

Also speaking, a lecturer of Capital Market Studies at the Nasarawa State University, Prof. Uche Uwaleke, said since GDP growth rate became weak and below population growth rate in 2015, unemployment rate is bound to be high.

“We have to recognize that sustainable economic growth, measured by GDP growth rate, is a necessary condition for economic development and by extension low unemployment rates”, Uwaleke said.

“Sadly, GDP growth rate since 2015 has been weak and below the population growth rate. In this condition, the unemployment rate is bound to be high.

“Second, it is equally important to realize that the quality of economic growth is critical to job creation. Before 2015, GDP growth rates were relatively high averaging about six percent in the preceding five years.

“Yet unemployment and poverty rates were high. This is because the GDP growth rates witnessed during those periods were non-inclusive in the sense that they were powered more by the oil sector than the employment-elastic sectors.

“As you know, the oil sector employs an insignificant proportion of the labour force. These are some of the factors responsible for the high rate of unemployment in the country.

“This administration has launched so many job creation initiatives encapsulated in the Social Intervention Programmes.

“These are complemented by the CBN interventions, especially in the agriculture and manufacturing sectors. “Some progress has been made no doubt, but the impact is what I may liken to a drop in a bowl of water.

“But the reach and coverage is far from what is desirable partly on account of government tight fiscal position”, the university don stated.