When Nation’s Economy Drains Its People
Femi Akintunde-Johnson
Nigeria’s independence in 1960 held a promise of prosperity for its citizens, a dream underpinned by an abundance of natural resources, and a population driven by the prospect of prosperity. Economically, the 60s might have seemed simple; families could survive on modest incomes, and essentials were within reach for many. But that promise took on a new form in the early 1970s after the discovery of oil in massive, exportable quantities. An “oil boom” followed – a golden opportunity, one would think, to uplift Nigeria’s living standards. Instead, the newfound wealth was significantly mismanaged, particularly by the military regimes that intervened time and again, throwing the country’s economic balance off course.
Infrastructure and industry were neglected as easy petro-dollars flowed in, creating a national reliance on oil while sidelining critical sectors like agriculture and manufacturing that could have fostered economic resilience. The implications of these missteps are now evident in every ordinary Nigerian’s struggle with an unbearable cost of living.
Fast forward to the dawn of the Fourth Republic in 1999, and Nigeria was a changed landscape. The naira, battered by years of inflation and devaluation, had left ordinary Nigerians grappling with a life that was becoming prohibitively expensive. Essentials – food, healthcare, housing – were beginning to slip out of reach, transforming what was once a decent middle-class existence into a daily battle for survival, with a constant need to adapt to rising prices. Commuting costs soared, salaries stagnated, and for many, feeding a family on a budget that kept shrinking by the month was fast becoming an impossible task. The age-old naira and kobo no longer held the value they once did.
Successive administrations in Nigeria have made lofty promises to address this “cost of living” debacle. Each leadership era seems to bring new pledges to rein in inflation, create jobs, and empower the local economy. Yet, despite these assurances, the average Nigerian continues to endure an unrelenting climb in the cost of living. And here lies the tragedy: while inflation and currency devaluation affect nations worldwide, Nigeria’s scenario seems to be worsening with little to no relief in sight. Unlike their counterparts in Europe or North America, who receive some form of government relief during economic downturns, Nigerians face one crisis after another with no lifeline to grab hold of.
Other countries have indeed faced the ravages of inflation in recent years, but most have managed to curb its worst effects through prompt and decisive government interventions. In the UK, for instance, inflation reached 11.1% in October 2022, its highest in over four decades. In response, the government introduced measures like energy bill subsidies to cap household costs and increased the national living wage, along with adjustments to social welfare systems to protect vulnerable populations.
Similarly, in China, inflation has been relatively stable, averaging around 2% annually. To keep living costs manageable, the Chinese government has implemented extensive housing subsidies, slashed public transport costs, and invested heavily in social housing projects to avoid burdensome rent increases.
In stark contrast, Nigeria’s inflation rate hit a high of over 25% in 2023, a level that erodes purchasing power and pushes more families into poverty. Despite this, Nigeria’s response has been far from adequate. Policymakers often announce grand economic roadmaps – such as the Economic Recovery and Growth Plan (ERGP) – that promise subsidies in agriculture, fuel price stabilisation, and accessible housing loans. Yet, these ambitious plans often amount to little more than rhetoric, with minimal real-world impact. For instance, while government officials have repeatedly announced housing development initiatives to address the deficit of over 17 million housing units, affordable housing remains out of reach for the majority. Likewise, subsidy reforms in agriculture aimed at reducing food costs have largely failed, as food inflation continues to soar, making basic staples unaffordable for many.
The Nigerian public has every reason to question whether these blueprints are meant as genuine frameworks for action or merely as symbolic gestures to satisfy public outcry.
Consider the latest data from the Manufacturers Association of Nigeria (MAN), which paints a bleak picture of where things are headed. With the recent naira flotation, a strategy aimed at stabilising the currency, businesses have reported losing close to ₦800 billion. The chairman of the Ogun State branch of MAN, George Onafowokan, revealed during the week: “The manufacturing sector incurred significant forex losses in 2023, which extended into 2024, forcing many manufacturers to either temporarily suspend or completely halt their operations. In fact, approximately 16 major manufacturing companies lost a combined total of N792 billion due to the depreciation of the naira resulting from monetary policy reforms. The impact on SMEs and smaller manufacturers has been equally devastating,”
This traumatic financial toll isn’t just an isolated issue; it signals a far broader economic decline. For manufacturing, a sector crucial for job creation and local production, such losses are a red flag that the economy is on a tailspin. And when industries falter, it’s not just the boardroom that feels it – it’s every Nigerian household that relies on affordable goods and job stability.
The patchwork of temporary fixes we’ve seen in response to the cost-of-living crisis will not suffice. What Nigeria truly needs is a structural overhaul. Solutions lie in robust, long-term economic reforms: sustainable job creation, serious investment in agriculture and local production, and a strict regulatory framework to keep inflation in check. By boosting our agricultural and manufacturing sectors, Nigeria could reduce its dependency on imports, ideally lowering prices in the process. Moreover, it’s high time the government introduced subsidies on essentials like food and healthcare – not for show, but to genuinely ease the daily pressures facing families across the nation.
Despite the current administration’s lofty proclamations of taming inflation and fortifying the naira, Nigerians remain justifiably sceptical. Why shouldn’t they be? These promises have echoed through the halls of power before – only to dissipate as soon as political elites returned to their luxury, far removed from the daily realities of ordinary citizens. While leaders flaunt their comforts, they preach “sacrifice” to the people already enduring hardship.
True success won’t be measured by pledges or hollow declarations. It will be evident only when a bag of rice costs far less than national monthly minimum wage, when young graduates find actual job opportunities, and when the nation’s wealth ceases to be a privilege for a few. Until then, the average Nigerian will keep asking: is this the era of real change, or are we left to struggle in a system that seems increasingly designed to stretch our resilience to its breaking point?
