Nigerians Panic As Naira Value Threatens Worsening Poverty And Economic Stability In Nigeria....KINDLY READ THE FULL STORY HERE▶

The ongoing and relentless devaluation of the Nigerian Naira is having severe consequences, as it means that every citizen is becoming financially worse off day by day. Regardless of one’s economic status, whether rich or poor, the impact is evident.

Nigeria, often referred to as the “Giant of Africa,” is grappling with a daunting challenge that poses a significant threat to its citizens and the overall stability of the nation.

The Naira is continuously losing value in comparison to foreign currencies, particularly the United States dollar. At the time of writing this, one US dollar is equivalent to more than 1,000 Naira.

This devaluation has resulted in a steep rise in the cost of goods and services. Essentially, the Naira’s purchasing power has significantly diminished, as economists would explain.

Alongside the high costs associated with fuel for vehicles and a general breakdown in manufacturing, this economic hardship has created a storm of difficulties for the people, leading to an increase in crime rates and criminal activities across the board.

With limited or no local manufacturing, any uptick in the cost of the dollar directly translates to higher prices for goods in the market since many products are either imported or rely heavily on imported components for local manufacturing processes.

From May 2023 to the present, the Naira has lost half of its value, leading to a 100% increase in prices across the board. Everyday items like shaving sticks and soap have seen significant price hikes. This has resulted in the average Nigerian being considerably poorer than before May 29, 2023.

Adding to the challenges of high living costs, governments are intensifying efforts to collect more taxes from economically distressed citizens. While incomes are losing their purchasing power, citizens are being burdened with multiple tax obligations, from local government authorities to state governments and the federal government. The common theme is an emphasis on increasing Internally Generated Revenue (IGR).

These government entities seem to overlook the fact that inflation tends to lead to a decline in economic activities. If governments continue to impose additional taxes on the few remaining manufacturers, it will lead to factory closures, further contributing to unemployment and poverty. Therefore, this is a time when tax rebates and tax holidays are needed, not tax increases.

Have Palliatives Been Effective?

Based on previous experiences, it is apparent that palliatives have not been effective in aiding the poor, as they were intended. Instead, they appear to have primarily benefited those in power. It’s essential to recall that the #EndSARS youth protest was, at its core, about opposition to government policies, poverty alleviation, and issues related to the distribution of palliatives.

Reports indicated that the so-called palliatives were stockpiled by government officials in warehouses. There were even instances where politicians used these palliative items for personal purposes, such as birthday parties or gifts for their associates and supporters. The point being made is that the intended beneficiaries of these palliatives did not receive them.

In this new era under Tinubu, palliatives seem to have encountered similar challenges. There is evidence of paltry distributions, such as a housing estate receiving a single bag of rice worth 25,000 Naira as palliative for approximately 150 households. This appears to be a common occurrence nationwide, with the term “audio palliatives” being coined in response to promises that don’t materialize.

What About Cash Transfers?

For many Nigerians, cash transfers by the government are seen as a form of official fraud. Most vulnerable Nigerians reside in rural areas with limited access to formal banking systems. Despite this, the government expects citizens, many of whom cannot read or write, to handle cash transfers. The cash transfer program during Buhari’s tenure had limited success, and there are doubts about the effectiveness of the current one.

Despite these token efforts by the government, citizens are undeniably becoming poorer. Some states have marginally increased civil servant salaries, with increments ranging from a few thousand Naira. While such steps are commendable, important questions remain. Civil servants represent a very small percentage of a state’s population, often less than 0.1%, yet the poverty rate in Nigeria stands at around 70%. How can a program that targets a minuscule portion of the population address the challenges of the majority who live in poverty?

Subsidizing Farmers

The most effective way to mitigate the soaring prices is by providing substantial subsidies to farmers. This means meaningful support, as opposed to the past where states with millions of residents received a handful of tractors. The Central Bank of Nigeria (CBN) under Emefiele funded politicians and governors under the guise of supporting farmers.

If the government genuinely wishes to ensure its welfare efforts reach the average citizen, cosmetic solutions should be abandoned, and the real issues should be addressed.

The focus should be on small-scale enterprises (SMEs), offering loans to manufacturers and food processors that rely predominantly on locally sourced materials. As long as Nigeria’s economy is heavily dependent on petroleum, and gasoline prices are tied to the dollar, poverty will persist.

It is scandalous that a country exporting crude oil turns around and imports gasoline and diesel. How can businesses survive when diesel, a key energy source, is selling for over 1,000 Naira per liter?

To reduce poverty, we must demand a change in outcomes. Unfortunately, change will remain elusive if we tolerate corruption. Addressing corruption within the government and public institutions is vital for rebuilding public trust and ensuring efficient resource allocation.

Nigeria is facing an economic crisis characterized by the rapid depreciation of the Naira, high fuel and diesel costs, and a collapse in living standards. The country is on the brink of a significant social and economic catastrophe, and it is essential for those in power to take immediate and decisive action to address these issues.

A multifaceted approach, encompassing economic diversification, foreign investment attraction, and the establishment of social safety nets, is required to alleviate the suffering of Nigerians and restore stability. The future of Nigeria hinges on its ability to navigate this crisis, creating a more prosperous, equitable, and secure environment for its people. Time is of the essence, and swift government action is required to prevent further declines in living standards and societal stability.