The recent security issues are a cause for concern and Nigerians genuinely hope respite will come next year in May
There has been a rise in the number of Nigerians hoping to leave the country. The term ‘Japa’ has grown from slang to a word of hope amongst Nigerians on social media. According to a survey, in 2019 only 32% of Nigerians were willing to leave the country, the number has increased to 7 out of 10 Nigerians as of 2021.
There has also been a rise in the number of student visas to the United Kingdom by 415.3% from 8384 in 2019 to 43,200 in 2022. Also, skilled visas increased by 161% from 3,918 to 10,245. There has been an unprecedented increase in the number of Nigerians seeking greener pastures outside the country.
The inflation rate in Nigeria has reached an all-time high with soaring food prices, and the inability of the average Nigerian to afford a 3 square meal daily. Nairametrics earlier reported that the Consumer Price Index report, released by the National Bureau of Statistics (NBS) showed that the inflation rate in Nigeria stands at 17.71%, with food inflation at 19.5%. The implication of this is that it has hampered the purchasing power of the average Nigerian, and also people have to spend more on necessities or survival such as food, clothing, and toiletries, amongst others, due to a hike in price.
The Debt profile of Nigeria also represents where the country stands currently. Nairametrics earlier reported that at the end of Q1, the country’s debt is now at N41.6 trillion. The Debt Management Office (DMO) has reported that it could climax at N45 trillion at the end of 2022. This is because the government has over the years borrowed money to fund infrastructure, as well as budget deficits. According to reports, the government plans to borrow an additional N6.39 trillion to fund the 2022 budget deficits.
Eyebrows have been raised as Nigeria borrows mostly from international organizations and countries, and a default on payment could lead to Nigeria losing its autonomy, based on the agreed terms. In a similar vein, Diesel prices in the country have skyrocketed. As of January 2022, the price of diesel averaged around N250. As of now, the price average is around N800, which represents around a 220% increase, and could rise to as much as 300% of the price in January.
Crude Oil is Nigeria’s main export and economic financier. Despite this, Nigeria tends to suffer when the oil price is high and when the oil price is low. Nigeria currently only produces around 60% of its quota (1.8mbpd quota, 1.02mbpd production). This has made Nigeria lose its place as Africa’s biggest oil producer. Oil is a huge factor in Nigeria’s budget, with oil prices set at a benchmark. However, when oil prices are low, this means Nigeria will not be able to generate enough revenue from its projected figure and this will affect the economy.
Also, when prices are high, the moribund nature of Nigeria’s refineries means Nigeria spends more. After exporting, Nigeria spends more to import petroleum products. According to reports, Nigeria has spent N1.5 trillion to import petrol in Q1 of 2022. With the Nigerian government paying subsidies, the amount paid has increased astronomically in the last few years. This means with an ever-increasing subsidy bill, Nigeria will get nothing from soaring oil prices.
Despite erratic power supply, which has crippled economic activities in the country, coupled with an epileptic national grid that has collapsed more than five times in 2022, there has been an increase in electricity tariff in the country, with a reduction in the supply hours of electricity. The increase has created more woes for the average Nigerian, who has been forced to get alternatives in petroleum products (which are now on the high side or unavailable) but also have to pay for a non-existent power supply.
The figures under Buhari’s tenure have increased for the wrong reasons. Under Goodluck Jonathan, 15,000 people were murdered, 71% poverty rate, 24% unemployment, and the exchange rate were between N170-N190. Under Buhari, 54,948 persons have been killed due to violent acts, 95 million Nigerians in poverty with 92% of the population living under $5.5 per day, unemployment at 33.28%, and the exchange rate at N415 to a dollar or around N610 in the black market respectively. This shows that insecurity has increased and the standard of living has reduced.
The strike action by the Academic Staff Union of University (ASUU) has continued to affect education in the country, with millions of Nigerian students unable to graduate as at when due. On Monday, February 14, 2022, ASUU embarked on another strike action which is yet to be called off. The strike has been a repeated occurrence in Nigeria since the start of the fourth republic, and according to reports ASUU has spent 1 in 4 days on strike since 1999.
This has led to students seeking alternatives outside Nigeria. Nigeria currently has 49 Federal universities, and 54 State-Owned universities with more coming as polytechnics are being upgraded to universities in some states across the country. The 2022 ASUU strike stems from disagreement on the use of the Integrated Personnel Payroll Information System (IPPIS) and University Transparency and Accountability Solution (UTAS) on the part of the Federal Government and ASUU respectively. Another issue is the failure of the Federal Government to honour an agreement it signed with the union to commit N200 billion annually for five years.
The 2023 general elections will be the 7th consecutive election to be held in Nigeria. The election will mark the longest period of democracy in Nigeria. The electioneering process has been marked by a series of controversies and misinformation, which has threatened the existence of Nigeria. The process has also led to a rise in groups calling for secession over being sidelined.
Nigeria has been shut out of the debt market, according to reports. Investors are no longer interested in Nigeria’s Eurobonds as it is now regarded as junk. The report noted that the price has fallen from 100 cents to one dollar to 77.5 cents to one dollar, which means any investor investing will lose 22.5 cents. Also, Nigeria’s debt stock moved from N12 trillion in 2016 to N40 trillion in 2021.
The analysts said Nigeria’s national oil company did not transfer any revenue to the government from January to March this year, due to petrol subsidies and low oil production, as it moved Nigeria’s debt out of the bank’s ‘overweight’ category. Nigeria’s fiscal woes amid a worsening global risk backdrop have raised market concerns despite a positive oil environment.
Earlier in the year, the Central Bank of Nigeria (CBN) stopped the sale of foreign exchange. The scarcity of forex has led to Naira losing value against the dollar. Also, Commercial Banks in the country through the directive of the CBN have limited access to forex to just $20 for online transactions. This policy has led to a boom in the black market, with manufacturers and prospective students buying at a higher rate.
This has created a difficult time, as individuals who need to perform online transactions will only get a tiny fragment of what is needed. Also, it has led to an increase in the prices of imported goods. According to reports, Olusegun Obasanjo left $9.43 billion in ECA, Musa Yar’adua left $22 billion, Goodluck Jonathan left $2.1 billion, and the ECA currently is at $35.377 million. This indicates Nigerian economy is currently in danger.
Since independence, Nigeria has always been flirting on the precipice. One such event is the civil war that almost led to the separation of Nigeria. Also, over the years there has been a rise in secessionist groups hoping to break away from Nigeria due to political, and economic reasons. The recent security issues are a cause for concern and Nigerians genuinely hope respite will come next year in May.
Nairametrics
