The International Federation of Red Cross and Red Crescent Societies (IFRC) and the Nigerian Red Cross Society (NRCS) have raised concerns about the alarming levels of hunger in Nigeria. Currently, a staggering 26.5 million Nigerians are facing food insecurity, indicating a severe humanitarian crisis.This has led to a recent wave of protests across several states in Nigeria, as citizens express their frustration with the rising cost of living and economic hardships.
On February 19, 2024, residents of Ibadan, Oyo State, took to the streets to protest the high cost of living, inflation, and skyrocketing food and commodity prices. The protests began in the Mokola area, with predominantly youth protesters barricading the Mokola under-bridge and Queen Elizabeth Road. Chanting the slogan “This is shege,” which signifies the hardships faced by Nigerians, the demonstrators demanded immediate action.The protests in Ibadan are not isolated incidents.
Residents of Kano, Ogun, Niger, and Sokoto states have also staged demonstrations in response to the economic crisis in Nigeria. These protests reflect the growing discontent among Nigerians who are struggling to make ends meet amidst rising inflation and a weakened economy.
The economic crisis in Nigeria is characterized by high inflation, a weak currency, and a lack of foreign investment. The country’s inflation rate has reached a 21-year high, with food prices rising by 23.3% in the year leading up to January 2024. The devaluation of the Naira against the US Dollar has further exacerbated the situation, making it increasingly difficult for Nigerians to afford essential goods and services.
While the Tinubu-led administration has defended its policies, stating that they are aimed at long-term benefits for the country, critics argue that these policies have failed to alleviate the suffering of the Nigerian people. They also claim that the government has been slow to respond to the crisis. Former Vice President and Presidential Candidate of the Peoples Democratic Party (PDP), Atiku Abubakar, expressed disappointment in President Tinubu’s failure “to showcase any concrete policy steps that his administration is taking to contain the crises of currency fluctuation and poverty that face the country.”
Atiku advocated for a sound foreign exchange (FX) management policy, proposing a managed-floating system to stabilize the value of the Naira. He highlighted Nigeria’s limited foreign reserves and declining oil receipts as reasons to adopt a controlled FX system. The former Vice President suggested a gradualist approach to stabilize the Naira’s value against the dollar, contrasting it with the current free-float system.In response, the Presidency rejected Atiku’s proposal for managing Nigeria’s foreign exchange crisis, considering it misguided.
Presidential spokesperson Bayo Onanuga criticized Atiku for suggesting a controlled floatation of the Naira, drawing a comparison to a policy implemented during former President Muhammadu Buhari’s administration. This previous policy involved spending an estimated $1.5 billion monthly to support the Naira, a practice that was deemed corrupt. Onanuga defended the current government’s policies, stating that Atiku’s proposal would lead to similar issues of arbitrage and round-tripping.
Former Governor of the Central Bank of Nigeria, Mohammed Sanusi, also defended the Tinubu Administration, stating that it would be unfair to solely blame Tinubu’s administration for the current economic crisis. According to Sanusi, the country is grappling with a failing economy due to mismanaged economic policies over the past eight years. Sanusi commended Tinubu’s decision to remove fuel subsidies, asserting that it would be unjust to blame the administration for the current economic hardships.
While Nigeria’s economic crisis is severe, it is not unique. Many countries worldwide are facing similar challenges, including high inflation and a lack of foreign investment. For example, the United States has experienced a 1.4% increase in inflation over the past year, while the United Kingdom has seen a 3.2% increase. However, these countries have implemented policies to address the crisis, such as interest rate hikes to combat inflation and fiscal stimulus packages to support economic growth.
Nigeria can learn from the experiences of other African countries, such as South Africa and Kenya, which have successfully implemented policies to tackle economic challenges. Both countries have faced issues like poverty, inequality, and youth unemployment but have implemented strategies to address these problems and promote economic growth. Kenya has focused on fiscal devolution, infrastructure development, regional integration, and inclusive growth, while South Africa has emphasized niche business segments and the digital economy.
The World Bank has also recommended that Nigeria must restore macroeconomic stability through measures to reduce domestic and external imbalances. This will require a coordinated mix of exchange rate, trade, monetary, and fiscal policies, including adopting a single, market-responsive exchange rate, eliminating petrol subsidies, and increasing oil and non-oil revenues. The World Bank also suggests boosting private sector development and competitiveness by removing structural constraints that hinder productivity and expanding social protection to safeguard the poor and the most vulnerable.
By Francess Otti
