Home Nigeria Inflation: Where are we going from here?

Inflation: Where are we going from here?



Nothing depresses the head of a household like waking up early in the morning, and preparing for the day’s tasks, all the while considering the mathematical economics of his lean pocket. His take-home pay can no longer cover even the bus fare, let alone provide for his family. The same applies to CEOs of various small and medium-scale enterprises. On a daily basis, if not hourly, they calculate overheads, the cost of raw material replacement, or order to arrive at fair prices for each item available for sale, ensuring the firm remains afloat. The worst hit are salary earners, whose pay rarely changes. All these calculations wouldn’t be necessary if the prices of goods and services were relatively stable, not fluctuating like water lettuce on the sea.

We are in a dire situation where one constantly racks their brain over the price of daily meals, transportation fares, or the cost of putting a car on the road, among other basic necessities defining human existence. Spending is adjusted downward until it’s no longer possible. The calculations used in the last 24 hours for purchasing goods are no longer reliable because prices have almost immediately increased. Where are we headed from here?

For any economy to achieve not just growth, but sustainable development, inflation must be well monitored and controlled. In fact, it should not exceed single-digit thresholds. According to the December 2023 report from the National Bureau of Statistics, the inflation rate was 28.92 per cent, with the food sector leading at a historical level of 32.8 per cent. This should concern every right-thinking individual and institution, locally and internationally.

Statutorily, the primary responsibility of the CBN as an institution is price stability. Every other function comes after ensuring price stability. This presents a serious challenge to the monetary regulatory authority. Continuous depreciation of the purchasing power of the naira can lead to a return to the dark days of barter trade.

An insatiable taste for foreign goods and services has significantly contributed to the persistent decline in the value of the naira. This trend will continue until we prioritise local production and add value to our products, making them irresistible to those outside Nigeria. This will, in turn, generate the foreign currency needed for international transactions. Relying solely on proceeds from crude oil, the major export item, is no longer sufficient to maintain a healthy liquidity position for the country. Nigeria would be in a better position if leaders and opinion moulders demonstrated a high level of patriotism by not only believing in Nigerian products but also buying and using them. The effects would trickle down to the common man on the street.

In 2017, during one of former President Muhammadu Buhari’s medical vacations, his Vice President, Yemi Osinbajo, signed three executive orders, one of which focused on ease of doing business. Within 30 days, there was respite and a noticeable improvement across the country. In fact, the exchange rate decreased. This well-thought-out approach endeared him to many, even to this day. Isn’t it time for President Bola Tinubu to sign appropriate executive orders and activate necessary mechanisms to alleviate citizens’ suffering and rescue small and medium-scale enterprises struggling to survive? The fate of these enterprises significantly impacts the economy. Nigeria cannot afford to add to the already high levels of unemployment. While no government anywhere in the world can provide jobs for all its citizens, establishing necessary frameworks empowers small and medium-scale enterprises to not only thrive but also employ those willing to work.

The recent killings of two kings and the kidnapping of staff and students from a private secondary school in Emure Ekiti, Ekiti State, justify supporting local vigilantes like Amotekun to carry light weapons against these marauders and evildoers. In the past, nobody dared to confront a traditional king, let alone point a gun at one. Such actions would have led to immediate consequences.

The ‘Fountain of Knowledge,’ as Ekiti is called, is known for its intellectual prowess and agricultural activities. Every family used to have a farm until recently when farms became unsafe. This is why hunger is evident, not only in the state but across the country. We cannot continue using the same approach to tackle complex issues and expect different results. It’s time to establish special courts to try kidnapping cases with set timelines for the conclusion of such trials. Culprits found guilty must face the death penalty without the possibility of parole. This will naturally decrease, if not eradicate, such incidents.

The negotiation and implementation of a new minimum wage by the federal government and others are long overdue. However, no matter the agreed-upon amount, it may only serve as a temporary fix rather than addressing the root cause, because in a matter of months, the value of the money could depreciate, leading us back to square one.

I look forward to seeing President Tinubu working tirelessly for “the poor to breathe” and ensuring the country’s security before it’s too late.

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