A combination of a sharp rise in cost of energy and steep depreciation of the naira against major world currencies like the United States Dollar, British Pound Sterling and Euro has triggered a debilitating form of cost push inflation in Nigeria in a manner never experienced before. With inflation rate officially estimated at about 30% and wages stagnant at about 30,000 naira [$20] monthly minimum and the naira exchanging above 1500 to the dollar, most Nigerians have become impoverished, destitute and hungry. Unable to afford basic food items such as rice, yam, fish, beef, sugar, milk and bread as prices have gone beyond their income, the widespread hunger in Nigeria has reached an epidemic level as worse affected Nigerians are now feeding from the garbage bin.
Whilst Nigeria has been a struggling economy with perennial problems of poverty, unemployment and stunted economic development, the aggravated economic woes that currently bedevils the country was brought about by the full dose administering of the neo-liberal prescriptions of the International Monetary Fund [IMF] by the administration of President Bola Ahmed Tinubu beginning from its May 29 2023 inauguration day. These prescriptions that have proved toxic if not lethal are encapsulated in the twin policies of removal of subsidy on petrol and floating of the Naira to find its ‘’true value’’ by the Tinubu administration. Thus began Nigeria’s simultaneous journey to Zimbabwe and Venezuela, where like these two countries in recent times, Nigeria is currently ensnared in its worst ever currency and energy crisis that has combined to cripple an already struggling economy.
Praised by neo-liberal economic pundits who interestingly dominate economic thoughts and whose narrative shape public discourse in Nigeria, as a bold, courageous and necessary step in the right direction for Nigeria’s economic salvation, the Tinubu administration was buoyed in its terrible economics, swirling and doubling down on its suicide mission until recently when the hunger epidemic in Nigeria has resulted into a social unrest beginning from the northern parts of the country. The arrogance of ignorance with which agents of the Tinubu administration went about defending the toxic policies of subsidy removal on petrol and floating of the Naira left many Nigerians with an uncommon form of helpless hopelessness as though thrown into a dark hole that is still being dug without light at its end. And when a man loses hope, he is ready to lose everything else. Sadly, President Tinubu’s cheerleaders have lost their voice with their tails in between their legs as they don’t have a solution to the problems caused by their lethal neoliberal economic prescriptions.
The idea of subsidy removal on petrol is one that should never have occurred let alone contemplated in the first instance as it completely negates the economic fundamentals of energy security as the foundation of economic productivity. What air is to living things is what energy is to the economy without which the economy will suffocate and die. While God in his infinite mercy gave living things the grace of utilizing free air to stay alive, the government, which is God’s representative on earth has a fundamental responsibility to make available, accessible energy products and services if not for free but at very affordable prices through the instrumentality of subsidies. That the primary responsibility of government is the welfare and security of the people makes energy security [availability, accessibility and affordability] and integral component of National Security, which is pivotal to achieving citizen welfare. This why every country in the developed hemisphere prioritises subsidy on its most utilized energy products as National Economic Security as no economy can survive high cost of energy in the same way that living things won’t survive for long if a price tag is imposed the air they breathe.
Therefore, when President Tinubu declared subsidy on Nigeria’s most utilized energy product [petrol], he actually abdicated his primary responsibility of being in government because the affordability aspect of energy security makes subsidy a permanent feature. And abdication of responsibility of this nature, which is also gross violation of the constitution by a democratically elected leader, should never be described as courageous or bold under all circumstances. It is the asphyxiation of the economy arising from acute energy insecurity that has triggered food insecurity resulting into widespread hunger epidemic and the attendant social unrest brewing from north to south and from east to west of Nigeria; a situation that may degenerate into a challenge for Nigeria’s collective National Security.
Ruled by a profligate, corrupt and inept political leadership that is only about the privileges of power and not its responsibilities, the people of Nigeria feel betrayed by the violation of the social contract between the rulers and the ruled, which has push them to fringes of mere existence. While many commentators have described the situation in Nigeria as a cost of living crisis, the reality is that Nigeria’s are actually battling with the ravages of cost of existence crisis. Nigerians are no longer living but merely existing on the margins of life.
The resulting effects of the removal of petrol subsidy and floating of the naira is a clear indication that price of energy and exchange rate should never be left to vagaries of market forces except when the factors of production maintains prices at or below the affordability threshold of the consuming public . To prevent a further deterioration of the situation into a full blown people uprising against the state, the government of President Bola Ahmed Tinubu must as a matter of urgency restore subsidy on petrol to the level it was on the morning of May 29 2023 and unfloat the Naira without further delay and peg it at an appropriate exchange rate that will not hurt an import dependent economy such as Nigeria. In addition, subsidies should be imposed on diesel and aviation fuel to save the aviation and manufacturing sector from collapse. And to mitigate the ravages of Nigeria’s cost push runaway inflation, interest rates should be reduced to single digit at not more than 5%.
The bold and courageous decision that President Tinubu should have taken on his inauguration day was not to plunge the country into its worse cost of existence crisis ever but to take the decision to commit class suicide in national interest. This much required class suicide will put an end to cultural, institutional and administrative corruption enough to allow government the capabilities to discharge its primary responsibility of providing security and welfare for the Nigerian people.
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