Soaring cost of living ticking time bomb, say Sanusi, others

Buffeted on all sides by worsening insecurity, alarming unemployment rate, inclement economic conditions, poor political leadership, skyrocketing prices of goods and services, as well as the absence of proven economic drivers, the country has continued to teeter dangerously on the edge of the abyss.

As she flounders aimlessly, concerned stakeholders are warning that the failure of the Federal Government to halt the hardship afflicting Nigerians could spring catastrophic consequences that could cost the nation dearly.

Faced with the prospect of dire consequences due to a poor and failing economy, especially as capital inflows have plunged, local investments stagnated, and the employment crisis worsens, some economists have called for thorough scrutiny of growth drivers and national policies in order to rejuvenate the economy and save it from total collapse.

In his characteristic manner, former Central Bank Governor, Alhaji Muhammadu Lamido Sanusi, minced no words in concluding that the nation’s socio-economic problems have worsened under the President Muhammadu Buhari-led government, which he stressed has eroded all the gains the nation achieved from 1980 to 2014.

At a well-attended colloquium in Kaduna State, yesterday, to mark his 60th birthday anniversary, Sanusi lamented that the country’s economy has continued to nose-dive under Buhari, and “things are not working,” tasked like minds to speak up and halt the country’s slide into oblivion.

“I only speak to the best of my understanding what I see about the country, and I have paid the price, but Nigerians are the ones paying the real price. It is the price you see in increased poverty, it is the price you see in insecurity, in a high rate of inflation, in loss of values of our currency, in the numbers around malnutrition, unemployment, out-of-school children, maternal mortality, and infant mortality,” the former Emir of Kano said.

Sanusi continued: “Calling me controversial or calling me an enemy or critic will not make those facts go away. So, anywhere we go, we must face these facts. Am I happy about it on my 60th birthday? No because 60 years ago when I was born, the United States government advisory was telling investors that Nigeria has a better economic future than Japan. Today where are we and where is Japan?

“It is not about one or two governments, it is about decades of a people throwing away opportunities, and every time we are given a chance to make a change, we go back to the same old things. And you know, when I have a platform like this, I have to talk. I have tried not to say much not because there is nothing to say or because I am afraid of speaking. The reason I have not spoken much in the last two years is that I don’t even have to say anything anymore, because all the things we were warning about have come,” he added.

Going down memory lane, Sanusi, an economist said: “In 1980, Nigeria’s GDP per capita on purchasing power parity basis was $2, 180. In 2014, it appreciated by 50 per cent to $3, 099. According to the World Bank, where were we in 2019? $2, 229. At this rate in the next two years in terms of purchasing power parity, the average income of a Nigerian would have gone back to what it was in 1980 under Shehu Shagari. That means that in 40 years, no progress, we made zero progress. 40 years wasted.

“Between 2014 and 2029, on the basis of this index of the purchasing power of the average income of an average Nigerian, we have wiped out all the progress made in 35 years. We have a responsibility as a people to rise and improve the lives of the people of this country.

“It is no longer about government, political parties, traditional rulers, or emirs. The days are gone of saying one class of people, whether they are emirs or civil servants cannot talk. When there is a fire, everyone has to go with a bucket of water. We need to understand how our economy works as a people; we need to understand our choices.

Seventy per cent of our challenges in this country is from insecurity to herder/farmer clashes. All have their roots in the economy. Even this shout about restructuring is about the economy; it is about resources. We need to grow this economy and make it work for the poor people,” the erstwhile royal father said.

“Since I am wearing two caps- as an economist and an Islamic scholar, I need to say that at the level of the North and Muslims, we need to look hard at ourselves and questions the choices that we have made.

“As Emir of Kano, we got scholars to sit for three years. We drafted a Muslim Code of Personal Status that began to address some of these issues. That law was ready in 2019, but it has not been passed. I also sent it to the Chairman of the Northern States Governors’ Forum, the Governor of Plateau State, and said, in case any of the governors need it, give it to them. I have not heard anything. But we keep talking about poverty in the North. We keep talking about Almajirai. These Almajirai did not produce themselves.

“If you cannot maintain one wife and you marry three; if you cannot maintain three children and you have 17; if you leave those children on the streets without education,without training, you are going to have young men that would be a problem to our society.

“The youths that you see on drugs, those that are into stealing and kidnapping are all products of that social system. And we need to ask ourselves, is this what Islam said we should have? Are these the children that Islam said we should have,” he asked?

Sanusi in recalling how he and his team injected sanity into the banking system said: “As Kingsley Moghalu said, when we started the banking reforms, every day on the front pages of newspapers, bank CEOs were at the Villa; they were friends of the president; they were oligarchs; they were untouchables. I remember when we started going after the bankers, someone called me and said, you know you are a young man, you don’t know what you are doing, you will not succeed. What have we done today? So, far, three or four of the wealthiest and powerful bank CEOs in this country have gone to jail and nothing happened.

“You can fight any system, you don’t need a large number. People can have temporary powers to use, but the truth will always prevail. So, when I was suspended as CBN Govermor, I made a famous statement that you can suspend a man, but you cannot suspend the truth. And this is the truth that has come out.”
Beyond the employment crisis, which was estimated at 33.3 per cent as of December 2020, activists are clearly not satisfied with the government’s efforts in tackling insecurity. A rising unemployment rate alongside escalating inflation means a higher misery index, which currently stands at about 51 per cent.

To reverse these sour trends and turn on the engine of sustainable growth, economists and finance experts have charged the government to stop de-industrialisation, retool policies, and make governance responsive.

Godwin Owoh, a professor of applied economics, said governments at all levels must get involved in businesses with huge cash flow prospects, and scrap bureaucracies that are not adding value.

“We should stop peddling the idea that the government cannot do business when it sits on huge resources. Some of the governors have flourishing businesses, so they should stop the hypocrisy. One of the most efficient airlines in the world is owned by the government. So, it is a fallacy when we say they cannot do business. What that means is that they should be inefficient and wasteful,” Owoh, who has consulted for the World Bank and other international organisations, said.

For Dr. Austin Nweze of the Pan-Atlantic University, rising unemployment would get worse unless something urgent is done to address the rising insecurity, which he blamed for the current reversal in the industrialisation process.

Nweze said: “The solution to poverty is simple. Let us get people to work. But how can people work in an insecure environment? Our politics is very volatile, so foreign investors are not willing to come. Even domestic investors are not expanding because of fear of insecurity,” he noted.

David Adonri, a financial expert and Vice Chairman of Highcap Securities Limited, said: “There is no quick fix to reducing poverty. Time is required to correct the politico-socio-economic imbalances and abnormalities that cause poverty. First is the need to identify all the microscopic and major factors responsible for poverty in Nigeria and carefully address them.

“Starting from social factors, overpopulation can readily be fingered. Nigeria has excess liquidity of people generated from excessive birth rates and the unbridled influx of aliens. This has escalated the huge reserve army of the unemployed.

“As it stands, the heavyweight of Nigeria’s idle and consuming population has severely outstretched the country’s capacity to enjoy socioeconomic stability. Worse still, is that it is growing at an astronomical rate that will sooner than later, precipitate the dreaded Malthusian doomsday. Urgent population control is needed as a practical measure to reduce poverty in Nigeria. Another social hindrance to the reduction of poverty is the pervasive nationwide insecurity. If curtailed, an enabling social environment will be created for peace and progress.”

With social stability as a basic necessity, Adonri said, poverty can be combatted through appropriate economic policies centered on production. “The role of money, though important, is only to facilitate the allocation of wealth and exchange of goods and services among people,” he noted, stressing that access to goods and services is basic to addressing poverty.

“Considering the peculiarities of the Nigerian situation and being the poverty capital of the world, applying contemporary macroeconomic measures deployed by advanced economies will only worsen the already bad situation.

A professor of economics at the University of Port Harcourt, Okey Onuchukwu, agrees with Adonri that, “any economy that is not productive will definitely witness an atmosphere “where the cost of living will be very high. Nigeria is a mono-cultural economy that depends on oil and even in the oil sector, there is no value addition; we just dig out crude oil and sell at the international market.

“So, in this kind of economy when you are not producing, products will not be available for people to buy at cheap rates and that is why the cost of living is high, and that also affects our exchange rate because the exchange rate depends on what you can produce and sell to the rest of the world. So, when you are not producing and not selling to the rest of the world, we are buying from them and whatever that they have in terms of inflation in their country will be imported into our country,” he said.
And for a public affairs analyst, Dr. Uche Ugonna, the Federal Government’s inability to enforce price regulation, and failure to carry out the thorough implementation of its economic policies have continued to affect the wellbeing of the masses, adding that the long term effect was an increase in social vices.

“We are not lacking in ideas that could make our economy thrive better; what we lack is how to put those ideas into practical realities to enable us to have a better society; a society that caters for the low and high-income earners. If you compute how much has gone into the diversification policy of the Federal Government, and how it has benefited the country, you may be pushed to ask them to discontinue it.”

That policy, as much as I know, is being implemented, but has it been able to impact every region in the country? The answer is no. It is one-sided. That is why people cannot feel it. The same energy they spend in ensuring that certain areas of the country should benefit from it should be spent to ensure it moves around the country,” Ugonna said.

Poor judgments and decisions by the Federal Government as far as Joseph Aseda, a management expert and business analyst is concerned, are what have plunged the countries economic fortunes to the abyss.

“The economy managers distracted and constrained their solution options with factors other than economic and social factors. Any administration would have struggled with economic problems arising from both external and internal issues, but the current administration looks as if the wellbeing of the people is of little or no concern at all. The problem with the management of this economy has to do with misplaced priority and objectives, rather than technical know-how.”

While calling on the Federal Government to prioritise the wellbeing of the people, he advised that in collaboration with the state governments, it should focus majorly on the simple things first, including ensuring local sufficiency in food production and doing everything possible to have maximum local petroleum refining to strengthen the naira and arrest inflation resulting from the weakening of the naira.

(Adapted from The Guardian)