September 11, 2016

Hardship On The Increase: The Good, The Bad and The Ugly

Nigerians across social strata are terribly feeling the pains of the biting economic crunch. No one is left out, even the richest man in Nigerian, Dangote, lost some huge Billions recently.

To say that Nigerians are literally buckling under the excruciating weight of the economic recession which has made life very difficult for many is certainly stating the obvious.

From the backstreets of Idi Araba in Mushin, to Broad Street in Lagos to Onitsha Main Market in Anambra State to Owode Market in Kwara to Kaura Namoda in Zamfara to Kakuri in Kaduna, Sabon Gari in Kano, Ikot Epkene in Akwa Ibom, the narrative that resonates everywhere is hardship.

The Nation's Ibrahim Apekhade Yusuf reports that the situation is one of melancholy and dejection.

The angst is glaring as Nigerians feel the pains of increasing hard times.

It is instructive to note that ever before the Minister of Finance, Kemi Adeosun, officially confirmed that the country was ‘technically in recession,’ in mid July, Nigerians had been bemoaning their fate as they tackled the challenge of cost of fuel, epileptic power supply amidst increase in electricity tariff, hike in cost of food, goods and services, skyrocketing exchange rate of the naira to a dollar, backlog of unpaid salaries and mass retrenchment of workers.

Of course, as to be expected, the government kept repeating that the tide would turn once the 2016 budget was passed and the second half of the year would be better for the country and its citizens.

After President Muhammadu Buhari eventually signed the budget on May 6, he raised the hopes of turnaround with the injection of government funds across critical sectors of the economy.

But four months shy away from the end of the year, the reality is that Nigerians are yet to get their lives back on an even keel.

Organised and petty crimes have been on the rise with different tales both comical and superfluous of missing pots of soups, yam tubers to sale of human blood and organs for economic reasons as well as rampant cases of domestic violence, child abuse and suicide across the length and breadth of the country.

From available statistics from the National Bureau of Statistics, Nigeria officially slid into recession for the first time in more than 29 years.

The NBS said that the Gross Domestic Product contracted by 2.06 per cent after shrinking 0.36 in the first quarter.

It said the non-oil sector declined due to a weaker currency, while lower prices dragged the oil sector down.

A slump in crude prices, Nigeria’s mainstay, has hammered public finances and the naira, causing chronic dollar shortages. Crude sales account for around 70 per cent of government revenues.

Expectedly, attacks by militants on oil and gas facilities in Niger Delta have further compounded the impact of low oil prices, since the beginning of the year have cut crude production by about 700,000 barrels per day from 2.26million bpd to 1.56 million bpd. The government’s 2016 budget assumed 2.2 million bpd.

The NBS said annual inflation reached 17.1 per cent in July from 16.5 per cent in June – a more than 10-year high – and food inflation rose to 15.8 per cent from 15.3.

The NBS figures showed Nigeria attracted just $647.1m of capital in the second quarter, a 76 per cent fall year-on-year and nine per cent down from the first quarter.

Nigeria’s economy was last in recession, for less than a year, in 1991, the NBS data shows. It also experienced a prolonged recession from 1982 to 1984.

President Muhammadu Buhari was in power for some of that period as a military ruler after seizing power in a December 1983 coup and remained head of state until another military coup pushed him out in August 1985.

The office of the vice president, who oversees economic policy, said in a statement it expected a “better economic outlook” for the second half of 2016 “because many of the challenges faced in the first half either no longer exist or have eased.”

Offering his perspective on what assails Nigerians, Professor Akpan Hogan Ekpo, an economist, said the economy is currently in recession judging by the relevant macroeconomic and social indices.

“The morphology of growth indicates an economy with positive growth trajectories but no development.”

According to the university don who is also the Director General of West African Institute for Financial and Economic Management, “The high rates of unemployment, combined with reduced output in two quarters of 2015, suggest an economy in the sphere of stagflation, a prelude to a recession.”

He noted that GDP numbers, as provided by the NBS, experienced significant declines in 2015.

“The growth of the agriculture sector’ dropped from 4.47 per cent in the third quarter of 2014 to 3.46 per cent in the same quarter of 2015, a decrease of 1 per cent,” he said.

“This is an unhealthy situation given the importance of manufacturing in driving growth and development as well as job creation,” he explained.

Although inflation had been steadied at single digits, due to the central bank’s tight monetary policy, Ekpo noted that the rising rate of unemployment makes mockery of the positive trajectory, currently standing at almost 27 per cent.

He lambasted the NBS for trying to shy away from this sordid fact in its latest unemployment rates that suggest the economy is close to full employment.

While admitting that recessions are inevitable in any capitalist economy, Ekpo noted that the President Muhammadu Buhari government must put in place effective policies to combat the misery it brings upon the common man.

The professor went on to advocate policies that would prioritise massive investment in hard infrastructure, employment generation, investment in housing construction, rebuilding the public school system, building strong institutions, and an aggressive monetary and fiscal policy.

“It is expected that President Buhari has a committed team that would put the economy on the path of sustained growth and inclusive development,” he said.

Echoing similar sentiments, Dr. Bongo Adi, of the Lagos Business School, Pan Atlantic University, said the economic strife has made the populace despondent.

“To parody the words of the famous French philosopher, Molière, Nigerians believe it’s good food and not fine words that keeps me alive. So the much talk about the promise of better days ahead hardly agrees with the masses,” he stressed.

According to a public opinion survey by NOIPolls, released on August 10, 2016, 97 per cent of the respondents said the recent economic realities have had a negative effect on the wellbeing of the average Nigerian.

Some survival methods discovered by the polls include cutting down on household expenses and luxury items, resorting to prayers and hoping for a miracle, engaging in subsistence farming, adjusting feeding patterns in place of the regular three-square meals.

The rippled effects of the parlous state of the economy is also being felt by even the bourgeoisies’ and not just the hoi polloi as attested to by a few observers.

Miss Bolanle Awe (not real name), a daughter of a former lawmaker in the upper chamber, while sharing her tales of woes remarked that her planned study trip to the UK for her Master’s degree programme has hit the rocks as her dad says he can’t afford that now.

“The standard of living has gone down drastically, and that makes it very hard for me to be comfortable at the moment. A lot of things have gone up in terms of prices,” she lamented.

But while many economists are not the least convinced that things would improve for good, Prof. Ben Aigbokhan, an economist, holds the view and very strongly too that Nigeria’s economy would recover from depression as soon as possible with the measures being put in place by President Buhari.

Aigbokhan, the President, Nigeria Economic Society, noted that the government deserves thumbs up for rising to the occasion thus far.

“The government wants to be seen to achieve something and will not allow the economy to be nose-diving as to come to minus 1.8 per cent in the last quarter of the year.

“I think between now and the last quarter, the government is going to release some amount of money for the capital projects.

“So, the government will want to be seen doing something, that is why I’m optimistic that the country will come out of recession,’’ he said.

The economist opined that President Buhari’s talking about the economic situation was a sign that he wanted to shed off some of this image of inactivity and inaction.

“Also with the oil production picking up, some more revenue will be coming in gradually.

“I don’t expect government to spend the revenue on social things but government should spend it on developmental projects,’’ he said.

He stated that the release of funds for capital projects would enhance some level of growth in the nation’s economy.

Pray, Nigerians are asking, would there be a silver lining at the end of the tunnel? Time will tell.

9 comments:

Affected Citizen said...

As of now, the 'sliver lining' seems like a far cry but we just hope there's one at all and the end is not looking near

Hassan Aderemi said...

Issorite

Harbolarkale Niyi said...

The pain is much that I dragged fish head with my wife today. God will save us

samaila sulaiman said...

Issorite

Anonymous said...

Attention sir,ontisha main market is in ANAMBRA STATE and not in Abia as erroneously stated in your article.

Count Me Out said...

Lol @Niyi

inumidun said...

God hlp us..

Anonymous said...

People are dying of hunger

ats three said...

Lord help us.