Lukman Yusuf, a Kano resident, supports a family of five, including himself, his wife, and three children. He manages a small trading shop selling household provisions to provide for his family’s needs.
The 45-year-old explains how rising living costs brought on by the federal government of Nigeria’s economic policies have affected his business and family expenses.
“I used to have a lot of customers buying from me before, which gave me good profits, but now it has reduced,” he explained.
He further mentions that he consistently needs to reinvest his profits into his capital to restock his shop due to the rise in prices.
He elaborates that “Whenever I go to buy items from my supplier in the market, I find that prices have increased. So, I have to add my profit to my capital before I can buy new stocks for resale. In the end, only little is left to spend.”
Lukman is compelled to adapt his lifestyle by implementing strategies to manage, stating, “My wife no longer uses meat or fish when cooking; the goal now is to be able to feed, not to eat a quality meal; in fact, we now take Garri more than we did in the past just so we don’t go hungry.”
Midrar Abubakar manages a pure water factory, Yanju Water, in Lagos State, Nigeria. Speaking to Daily News 24, she discusses how the economic climate has affected the factory.
She emphasised, “The cost of production has increased, and patronage has dropped.” She also noted that “Customers are seeking more affordable options.”
The decrease in patronage has led to a reduction in production. Additionally, due to the recent rise in fuel prices, they have stopped using generators for electricity and now rely on government-provided electricity.
Similar to Lukman and Midrar, many Nigerians have felt the effects of the rising cost of living in the country.
This has compelled numerous individuals to trim their expenses in order to meet their essential needs.
POLICY REFORMS
Since taking office on May 29, President Bola Ahmed Tinubu has put forward significant economic policies.
Policies intended to enhance the country’s economy over the long term, even though they come with some immediate costs.
These policies involve removing the fuel subsidy and allowing the Naira to adjust based on market realities.
These actions were taken during a time when Nigerians were already facing challenges due to the previous administration’s naira redesign policy under President Muhammadu Buhari.
In his inaugural speech, President Tinubu announced the removal of the controversial fuel subsidy.
This move was supported by experts who believed the subsidy primarily benefited the wealthy and took up a large part of the government budget, leaving less for crucial areas like human capital and infrastructure projects.
With the subsidy gone, Nigerians now need to pay the actual cost of fuel that is not subsidized by the government.
As expected, fuel prices at filling stations quickly rose from N180 in some states to N600 and even higher per liter nationwide.
This marked the start of an increase in the cost of living as commodity prices in the market also surged.
In the days following the president’s swearing-in, the Central Bank of Nigeria merged different segments of the foreign exchange market to enhance transparency and attract more investors.
This led to fluctuations in the Naira’s value based on economic conditions and investor sentiment.
Since this policy was implemented, the Value of the Nigerian Naira against the dollar has continued to decline.
In May, a dollar was just above 700 Naira; it currently stands at 950 Naira as of the time of writing.
This has put pressure on businesses and the expenses of average Nigerians.
Although the federal government has announced a series of measures to alleviate the impact of removing the petroleum subsidy and similar shocks on the people, many Nigerians are still struggling from the effects.
The prices of petrol, food items, and other essential commodities continue to rise, leaving many grappling with the aftermath.
Nazifi Abdulrahman, a Kano resident pursuing his Masters programme at Federal University Dutse in Jigawa State, expressed, “Being a student, the transportation expenses alone have compelled me to remain in Jigawa State to reduce the high cost of transportation from Kano to Jigawa State.”
Talking about transportation costs, Ibrahim Ayyuba, a journalist, lamented the significant portion of his monthly income that goes towards fueling his car. As a journalist, he said, “And I need a car to go for interviews, meet sources, and other engagements in the field, so I can’t do without being mobile.”
PALLIATIVE MEASURES
In a national speech on July 31, the president unveiled several palliative measures designed to mitigate the impact of the economic climate on the Nigerian populace.
These palliative measures can be categorised into five categories:
1. INTRODUCTION OF NEW MINIMUM WAGE
The government pledged to collaborate with labour unions to establish a new national minimum wage, pending agreement and budget allocation
2. FUNDING FOR STUDENT LOANS
More than N1 trillion from fuel subsidy savings will fund student loans, preventing Nigerian students from halting their education due to financial limitations.
3. SMEs AND STARTUPS SUPPORT SCHEME
President Tinubu also pledged N125 billion for MSMEs, with N50 billion going to 1 million nanobusinesses by March 2024. Also, a N75 billion scheme to offer 9% interest loans to 100,000 SMEs and startups in Nigeria.
4. FOOD PRICE STABILISATION
President Tinubu also promised food price stability through the release of 2000 metric tonnes of grains and the provision of 225,000 metric tonnes of inputs to farmers.
5. N100 BILLION FOR MASS TRANSIT:
A governmental investment of N100 billion will acquire 3000 units of 20-seater Compressed Natural Gas (CNG) buses. These will be allocated to key transportation firms across states according to travel demand. Participating companies can secure credit at a maximum of 9% interest with a 60-month repayment term.
However, Nigerians are still unsure of how much relief this action will actually provide to lessen the population’s suffering.
