By Chris Okpoko
Recent news reports indicate a harrowing situation in Nigeria, where two separate crowd stampedes—one in the capital, Abuja, and another in the southern town of Okija—have resulted in several fatalities. This week alone has seen at least 48 people die in crowd stampedes across the country. Nigeria, Africa’s most populous nation, is facing its worst cost-of-living crisis in decades. Amnesty International Nigeria stated that “having ordinary rice at home is turning into a luxury” for many Nigerians.
Tragically, this might only be the beginning. Last month, In November 2024, three United Nations agencies called for urgent support in Nigeria, where record inflation, climate shocks, and ongoing conflicts are projected to increase the number of food-insecure people to 33 million by 2025. This figure marks a sharp rise from the 25 million currently in need of assistance, according to a joint statement from the World Food Programme (WFP), the Food and Agriculture Organization (FAO), and the UN Children’s Fund (UNICEF).
The UN report highlights a monumental hunger crisis projected for the second half of 2025, particularly affecting the northeastern states of Borno, Adamawa, and Yobe, which are home to about five million people facing acute food insecurity. Other regions, such as Zamfara, Katsina, and Sokoto states, are also emerging as hunger hotspots.
Despite being endowed with abundant natural resources, Nigeria grapples with significant challenges, including high inflation and widespread suffering among its citizens. The interplay between these issues creates a vicious cycle that hinders economic growth, exacerbates poverty, and leads to social unrest.
Source: National Bureau of Statistics
At a recent Joint Session of the National Assembly, President Bola Tinubu presented the 2025 Budget of the Federal Government of Nigeria, titled “The Restoration Budget: Securing Peace, Rebuilding Prosperity.” In his budget speech, the president projected that inflation would decrease from the current rate of 34.6 percent to 15 percent next year. This expectation is based on forecasts of bumper harvests driven by improved security and reduced reliance on food imports.
Additionally, the Federal Government announced the implementation of an import duty waiver program on July 15, 2024, which was planned to run until December 31, 2024. This initiative aimed to make essential food commodities more affordable, addressing Nigeria’s severe food security challenges.
However, with only days remaining until December 31, 2024, it is clear that this well-intentioned plan has yet to fulfill its objectives due to the strict eligibility requirements for the zero-import duty policy. The criteria for companies wishing to participate in this program include:
(a) Companies must be incorporated in Nigeria and have been operational for at least five years, consistently filing annual returns, financial statements, and paying all taxes and statutory payroll obligations during this period.
(b) For those importing husked brown rice or grain sorghum, additional requirements include owning a milling plant with a capacity of at least 100 tons per day, which must have been operational for a minimum of four years, and possessing sufficient farmland for cultivation.
(c) Similarly, companies importing maize, wheat, or beans must be agricultural enterprises with adequate farmlands or possess feed mills/agro-processing facilities that maintain an out-grower network for cultivation.
Moreover, it is surprising that inflation is projected to decrease from the current 34.6 percent to 15 percent next year, based on the expectation of “bumper harvests driven by enhanced security.” However, considering that it will take at least six months to see the effects of improved security on harvests, it is clear that we cannot sustainably meet our food consumption needs at this time.
Strategies to Address the Current Situation and Reduce Inflation
- Short-term Measures
To make essential food commodities more affordable and address Nigeria’s food security challenges, the import duty waiver program should:
- Extend for at least nine months from January 2025
- Accommodate all importers capable of importing essential food items, regardless of CBN foreign exchange access
2. Diversification of the Economy
To mitigate misery, Nigeria must diversify its economy beyond oil dependency. Investing in various sectors such as agriculture, manufacturing, and services can create job opportunities and stimulate growth. Agriculture, in particular, holds significant potential. By enhancing agricultural productivity through improved farming techniques and technology, Nigeria can increase food supply, stabilize prices, and reduce reliance on imports, often subject to currency fluctuations.
3. Investment in Infrastructure
Investing in infrastructure is critical to reducing costs associated with production and distribution. Improving transportation networks, electricity supply, and communication systems can enhance business efficiency, ultimately reducing prices for consumers. This investment should focus on creating a favorable environment for both local and foreign investments, as improved infrastructure will attract businesses and encourage competition.
4. Strengthening Monetary Policy Frameworks
The Central Bank of Nigeria (CBN) plays a pivotal role in managing inflation through its monetary policy. Strengthening the frameworks for monetary policy, ensuring transparency, and employing measures that target inflation control can stabilize the economy. This includes adopting inflation targeting, where the central bank sets explicit inflation rate goals, thus guiding the expectations and behaviors of consumers and investors alike.
5. Promoting Financial Inclusion
A significant portion of Nigeria’s population remains unbanked or underbanked, limiting their access to financial services. Promoting financial inclusion through mobile banking and micro-financing can empower individuals and small businesses, enabling them to save, invest, and participate in economic activities. This will not only boost domestic consumption but also stimulate economic growth, counteracting inflationary pressures.
Reducing Misery Through Social Interventions
While tackling inflation is vital, addressing the resultant societal misery requires comprehensive social interventions aimed at improving the quality of life for Nigerians.
- Social Safety Nets
Implementing social safety net programs is essential for protecting the most vulnerable populations. These could include cash transfer programs, food assistance, and healthcare subsidies targeted at low-income families. Such initiatives can improve living standards and provide immediate relief from the impacts of inflation.
- Access to Education and Employment Opportunities
Education is a powerful tool for breaking the cycle of poverty and misery. Investing in quality education and vocational training programs equips individuals with skills needed in the job market, fostering gainful employment. The government should prioritize educational reforms, ensuring access to quality education, especially in rural areas where poverty rates are highest.
- Healthcare Access and Improvement
Health challenges are closely linked to economic stability and personal well-being. A robust healthcare system is vital for maintaining a productive workforce. The Nigerian government must increase investments in healthcare facilities, ensure the availability of essential medicines, and promote public health awareness. Access to affordable healthcare will reduce the financial burden on families, allowing them to allocate resources towards other needs.
- Empowerment Programs for Women and Youth
Women and youth are often disproportionately affected by inflation and economic hardship. Empowering these groups through targeted programs, such as entrepreneurship training and access to finance, enhances their contributions to the economy. Creating an enabling environment for women entrepreneurs, coupled with supporting youth-led initiatives, can significantly reduce poverty levels and drive economic growth.
Fostering National and International Collaboration
Addressing inflation and misery in Nigeria cannot solely rely on internal measures; international collaboration and partnerships are equally important.
- Partnerships with Development Organizations
Collaborating with international development organizations can facilitate knowledge transfer, funding, and expertise in implementing effective policies and programs. Engaging with entities like the World Bank and the International Monetary Fund (IMF) can provide essential resources and technical assistance necessary for economic reforms.
- Regional Cooperation
Nigeria’s economic stability also hinges on regional cooperation within Africa. Engaging in trade agreements and partnerships with neighboring countries can foster collective economic growth. By promoting intra-Africa trade, Nigeria can mitigate the effects of external shocks and enhance economic resilience.
Conclusion
Reducing misery and inflation in Nigeria is a multifaceted challenge that requires a concerted effort involving economic diversification, infrastructural development, financial inclusion, and social interventions. By implementing these strategies holistically, Nigeria can create a more stable economy that not only addresses inflation but also uplifts the living standards of its citizens. The path to a prosperous Nigeria lies in its commitment to sustainable development, social equity, and collaboration, which together will foster an environment of growth, opportunity, and hope for all.
