By AYOOLA OLAOLUWA
His election as president on May 29, 2015 was greeted with euphoria. Many had hoped that the former general would quickly drag Nigerian out of the economic crisis he had inherited.
They can hardly be blamed for having such huge hope, as the ‘Change’ machinery of the All Progressives Congress (APC) that produced the president was effectively deployed to selling its candidate and policies to the disillusioned but expectant Nigerians.
Some Nigerians who bought into the ‘change’ agenda of the new government even sang a new song: ‘The ‘Messiah’ who will redistribute wealth equitably between the rich and the poor has finally come’. The president was expected to expand growth and reduce pervasive poverty.
Unfortunately, the huge optimism that trailed the election of President Muhammadu Buhari almost four years ago has evaporated, as Nigeria’s major economic indicators have weakened since May 29, 2015, when he was sworn-in. The euphoria has now turned to despair and insistent demands for the fulfillment of his electoral promises.
BusinessHallmark’s investigation revealed that though, government agencies such as the National Bureau of Statistics (NBS), Central Bank of Nigeria, and the Ministry of Finance have continued to churn out positive data of growth and repeatedly boasted that they have set the economy back on track, the climate still remained challenging.
On Tuesday, February 27, 2018, a report by the National Bureau of Statistics (NBS) on the nation’s Gross Domestic Product (GDP) shows that the economy recorded a growth of 1.92 percent in 2017.
However, checks revealed that the growth in the nation’s GDP, as released by the NBS has no correlation with the conditions of living of Nigerians. Rather, the current economic condition has dealt a devastating blow on Nigerians who now grapple with job losses, stagnant wages, and astronomical prices of essential services and commodities in the country.
On March 1, the International Monetary Fund (IMF) cried out that Nigerians are getting poorer despite the country’s slow recovery from recession, and economic reforms are urgently needed.
Available statistics indicate that more Nigerians are living in poverty today, than they were just four years ago. Real income has dropped over the past three and half years with the massive fall in the value of the naira and rising unemployment.
Living standards, according to the World Bank, are measured by income and expenditure. It is the quality of life being lived by a particular set of people — their level of wealth, comfort, material good and access to the basic necessities of life. The United Nations also recently reviewed poverty line from $1.25 per day to $1.90 per day. Based on this benchmark, most Nigerians who collect wages less than $1.90 (N700) per day live below poverty line
BH reviewed the prices of goods and services across the country and the findings are the same: cost of living is getting out of the reach of the poor.
Checks confirmed that since May 29, 2015 when the administration came into office, prices of most goods and services such as petrol, cooking fuel (gas and kerosene), electricity tariffs, dairy products, meat, and bread, school fees, bank charges among others have increased tremendously.
In the same vein, taxes, and fees such as land use charges and motor vehicle licenses, have gone up, further making life expensive for average Nigerians.
Many economic analysts agree that though, other factors, such as the crash in the prices of commodities worldwide contributed to the current economic hardship, policies of the present administration further pushed millions of Nigerians into poverty.
In December 2015, the Federal Government increased the prices of electricity tariff across the nation. Before the new tariff , residential customer category (R2) in the Federal Capital Territory (FCT), Niger, Nassarawa and Kogi States for instance, which fall under the Abuja Electricity Distribution Company (AEDC) franchise area, that previously paid N14 per kilowatt hour, now pay an increase of N9.60 making N23.60 per kilowatt hour.
Residential customers in Eko and Ikeja electricity distribution areas received N10 and N8 increase respectively in their energy charges. The same situation goes for residential customers in Kaduna and Benin electricity areas who got an increase of N11.05 and N9.26 respectively in their energy charges. For commercial consumers under the C2 category for instance, their energy charge increased by N12.08 and N13.35 respectively. The government followed up with an increase in the price of petrol from N126 per litre to N145 per litre on May 11, 2016 after Nigerians had endured a debilitating shortage of petrol.
The federal government under President Buhari also ended kerosene subsidy, by selling the product for N83 per litre from N50. However, the least the product is sold in the open market is N180. It sold for more outside Lagos.
Similarly, liquefied natural gas (LP), popularly known as cooking gas which hitherto sells for between N2,300 and N2,500 in 2015, now sells for between N3,500 and N4,200.
In terms of exchange rate, the Central Bank of Nigeria (CBN in 2016, allowed the naira to “free float”. Although the apex bank had firmly held the official exchange rate at N305 to a dollar in the last one year, the level of depreciation of the naira has been unprecedented. When Buhari took over power in 2015, the exchange rate was N199 to a dollar.
The naira has depreciated in the official market by 53 per cent and 70 percent on the parallel to about N365 to a dollar.
Prices of food items have also shot to the roofs making it increasingly difficult for Nigerians to continue to feed on the kind of diet maintained before 2016. With the rise in prices of basic items, staples such as meats and fish are gradually disappearing from dining tables.
Gabriel, a security guard in a publishing firm in Lagos, who live with a colleague in Akute, Ogun State, claimed that he had to review his monthly budget for food. He said that he and his colleague, who have a “common pot”, usually contribute N6,500 per month to buy food items for one month, but that things have changed for the worse.
“We had to increase the monthly budget from N6,500, to N15, 000, yet we have had to remove some things we put in our food. We don’t eat meat again, we don’t eat fish again, its only egg or ponmo. At times, we go to sleep on empty stomachs,” he said. The story is not different in many Nigerian homes.
BH however, observed that while the prices of several food items have gone up, the case of rice, garri and tomatoes is giving Nigerians hope of a better future. Tomato prices have been on a decline for a while, and were selling for N3,000 per basket at the Ile-Epo market in Lagos as at March 15, 2018.
It would be recalled that a basket of tomato went as high as N40,000 in 2016 owing to “tomato ebola” which affected the crop across in the northern part of the country. Rice, which went up as far as N22, 000 per 60kg bag in 2017, now sells fo between N8,000 and N14, 600.
Market survey conducted by BH in some markets in Lagos revealed that the prices of some products are now three times higher than what they used to be in 2015. For example, a 1kg of Dangote sugar which sells for N180 in 2015, is now N400 on the average; 1kg of Omo is N650; a pack of Lux toilet soap (6 pieces) is now N550; Royal Shaving Powder, N1,000, Magic Shaving Powder, N1,100; Bournvita (refilled), N1900 and Close up (140g) N270.
Others are Dano Milk Full Cream (refilled) N980, 1kg of frozen chicken N1,100; 1 cartoon of frozen chicken N9, 800; 1kg of Titus frozen fish N900; 1 pack of Maggi seasoning (100 cubes) N550; one 5litre keg of red oil N2,200 and one 5litre keg of vegetable oil – N2300.
The increase in prices is not limited to food items. Cost of basic household needs and fees payable on utilizes have risen tremendously. Electronic prices such as washing machine, blenders, phones, television, fridges and deep freezers as well as air conditioners have gone up.
A Binatone electric blender sold for N8,500 in 2014 now sell for N24,000; a Samsung 1.5hp split air conditioner now sells for N195,000. The same applies to phones and televisions.
The federal government and several state governments have also increased taxes and fees paid on several services. For example, Land Use Charge in Lagos state has increased by up to 400 percent, prompting fears of increment in house rents.
Also, fees paid to renew vehicle license, road worthiness and waste disposal have gone up. The renewal of papers for a 1999 Toyota Camry, which used attract N10, 000 is now N13, 500. Vehicle license renewal is now N3,500 instead of N1,350, while road worthiness fee is now N5000, instead of N3000. The only fee left untouched is vehicle insurance which remains N5000.
Likewise, fees paid to dispose waste in Lagos have gone up by over 100 percent from between N250 and N10, 000 to between N500 and N25,000. The very poor that lived in the popular ‘face you and face me’ who used to pay N250 now pays N500, while a three-bedroom flat pays between N750 and N2,500 per month. Medical waste attracts between N6000 and N50,000 depending on the size and location of the health facilities. Factories and industries pay move to evacuate their waste.
Meanwhile, with stagnant wages, inflation and job losses, most Nigerians are finding it difficult to afford these fees and live a decent life. The non-payment of the salaries of both public and private sector workers as at when due, makes the experience more excruciating to the extent that virtually everyone is lamenting.
High rate of employment in the country has also worsened the situation. According to the National Bureau of Statistic, Nigeria’s unemployment rate rose to 18.8% in Q3 2017, from 16.2% in Q2 and 13.9% in Q3’16. This is the 11th highest unemployment rate in the world. Likewise, the underemployment rate inched to 21.2% in Q3, from 21.1% in Q2, and 19.1% in Q3’16. This means that 34.02 million people were either unemployed or underemployed in the third quarter of 2017.
The spike in unemployment and underemployment occurred within the same period Nigeria exited recession and recorded a positive GDP growth rate of 1.4% (Q3’17). This means that Nigeria recorded a jobless growth in Q2 and Q3 of 2017.
According to the Financial Derivatives Company Limited, Nigeria’s misery index (combined unemployment, underemployment and inflation rates) stands at 55.90 per cent. The report by Financial Derivatives ranked Nigeria as the sixth most miserable states in the world.
The misery index is an economic indicator created to measure the well-being of the average citizen. It looks at the purchasing power of income, the ease of getting paid work, and the quality of available jobs. Unemployment + Underemployment + Inflation = Misery Index.
However, the firm’s Managing Director Bismark Rewane, “We expect the unemployment rate to ease marginally in 2018. It is a lagging economic indicator; hence the economic growth and pick up in business activities will be felt on the job data in 2018”.
Also, according to the United Nations Development Programme (UNDP), many Nigerians are living on less than US$1 a day, while poverty, hunger and inflation are making life miserable for them.
Reacting, former Minister of Education and social critic, Dr. Oby Ezekwesili, blamed the government of President Buhari for the poverty and despair in the country.
She claimed that President Buhari’s current economic policies are similar to those he promulgated during the military regime he led in the 1980s.
Ezekwesili said the president’s “archaic” and “opaque” economic principles are not only encouraging massive corruption and abuse of power, but also hurting the poor they were intended to help.
“During the first coming of this our new president, a command and control economic system was adopted. During that era, inflation spiraled. During that era, jobs were lost. During that era, the economic growth level dipped. That era wasn’t the best of eras in economic progress. What did not work in 1984 cannot possibly be a solution in a global economy that’s much more integrated.”
Ezekwesili said Buhari was rehashing the same “command and control” approach towards economic issues which has left the country’s economic indices worse off since he assumed office almost year ago.
“In over three years, the president is still holding to the premise that command and control is the only way out. The distortion of foreign exchange system has left the poor it was intended to support even worse off”, she said.
Some economic analysts who spoke with BH blamed the president for the current state of Nigeria’s economy, insisting that the masses will continue to suffer without the full involvement of the private sector.
“Investor confidence is at its lowest ebb because of the President’s perceived naivety when it comes to the economy. Buhari scores poor marks in the big areas. Privatisation, which offers a real lifeline, is in abeyance. No economy can develop without private investment, local and foreign, as the resources and technical expertise available to government are limited.
“Economic growth does not just happen by accident. It is always a result of conscious planning and diligent implementation of complex policy options”, declared Dr. Bayo Inaolaji, a lecturer at the Olabisi Onabanjo University.
The misery index is an economic indicator, created by Economist Arthur Okun measures the well being of the average citizen. It looks at the purchasing power of income, the ease of getting paid work, and the quality of available jobs. Unemployment + Underemployment + Inflation = Misery Index.