March 03, (THEWILL) – Mr Ambrose Agada is a transporter and trader at the popular Ile-Epo Food Market in Alimosho Local Government Area of Lagos State. Every day, since the past three weeks, he watches helplessly as his record sales turnover drops with such rapidity that he has not seen in his almost one decade in the business.
At a time he used to gross N500,000 per day on the average, but a paltry N180,000 now trickles into his purse due to a significant drop in sales.
The Benue-born trader, in an interview with THEWILL, said an average yam tuber (1 kg) that sold for N3,000 last year, now goes for N8,000 and it is virtually out of the reach of most categories of buyers that used to patronise him.
More frustrating is the fact that the loss of bargaining has made the business uninteresting. Nowadays buyers just vanish when he tells them how much his yams cost, leaving him with no other choice than to pray for one that is prepared to haggle, at least.
Agada attributes the development to the high cost of transportation as diesel and petrol sell for N1,800 and N750 per litre, respectively, among other increased expenses.
Another trader, Alhaji Ado, who sells yams, onions and potatoes, lamented that it takes close to three weeks’ round trip to source the items from the North as a result of insecurity and extortion on the roads by different groups – security agents, touts and countless local government revenue officials. “This used to be a 7 to 10 day-round trip, mid last year.”
THEWILL interacted with some women carrying babies on their backs, who were canvassing patronage to assist buyers carry the items they bought to their cars, while begging for or waiting to pick up broken pieces of yam.
“This is the way I feed my children. My husband is a bus conductor and he does not earn much from the job. Two of our children have dropped out of school because we cannot cope with their education. They now engage in street hawking of sachet water,” a woman who identified herself as Iya Seun said.
In another scenario, a middle-class family known as the Aigbe family had started going for substitute foodstuffs sold at lower cost, as against the alternatives they had fed on for many years. Oats for pap; meat, fish and eggs for broken dry fishes and what he called “biscuit bones” for meat and a regular staple of rice with little beans once in a week.
Mr Busari Aigbe, a civil servant, said the family of four had to make the adjustments to cope with other demands on his salary in the form of school fees, transportation and sundry bills.
“I thank God that I have some money to run my home, no matter how bad the situation is,” he told THEWILL last Friday, adding, “ I imagine how many others without a steady income manage these days. I have neighbours and live in a community where things are not what they used to be and this may be for a long time, given the current hardship.”
Such ‘many others’ were at that time registering their anger and frustration in protests on the streets of Minna and Suleija in Niger State; Ota, Sagamu and Abeokuta in Ogun State; Oyo and Ibadan in Oyo State, as well as Kano in Kano State.
Also, protest marches were held in Osogbo in Osun State; Port Harcourt in Rivers State; Sokoto in Sokoto State; Lokoja in Kogi State, and in Lagos, the country’s commercial capital. Even those in confinement and in refugee camps across the country took part in the protests.
The death of seven persons in a stampede at the Nigeria Customs Service (NCS) depot where 25 kg bags of rice were sold at a discounted price of N10, 000 to the public and the threat by Internally Displaced Persons in some camps in Borno to join terrorists in the bush over shortage of food and increased hardship in the camps, speak volumes about the dire situation in the country.
The Genesis
The journey to the fall of the Naira and its devastating impact on homes in the country started on June 14, 2023 when President Bola Tinubu, in a bid to reform Nigeria’s volatile foreign exchange market and bring stability to the embattled naira, approved the floating of the domestic currency and the unification of the forex market.
The policy saw the naira plunge to N664.04 to a dollar on the official window, against N471.67 per dollar which the domestic currency had traded on Tuesday June 13, 2023 – a day before the “bold” reform. This translated to a 40.78 percent depreciation in one swoop.
Since then, the naira has maintained a rollercoaster downward trend, hitting an all-time low of N1, 665.50 to the dollar on Friday, February 23, 2024, which represents a 249.4 percent depreciation.
In all aspects, this is at the heart of the current impoverishment of the citizens whose incomes and savings have lost 250 percent of their value since the floating of the naira in June 2023. As a means of exchange, the volatility of the naira has worsened the purchasing power of Nigerians amid high consumption over low productive capacity.
Immediate Impact
The result is stagflation – the simultaneous appearance in the economy of slow growth, high unemployment rate and rising prices.
This has seen the inflation rate hit 29.9 percent as of January 2024 against 22.41 percent in May 2023, as prices soar beyond the reach of the average Nigerian.
Across the states, the prices of staple food items like garri, rice, yam, corn, millet, plantain, cassava and cocoyam have sky-rocketed. This extends to basic food ingredients like palm oil, vegetable oil, pepper, fish, tomato and common spices.
Fruits are a no-go area as the lean family budgets can hardly accommodate such a ‘luxury’ at this time.
Consequently, the constant inflationary pressure has plunged many homes into financial crises, increasing the cost of living and worsening their livelihoods. The surge in the cost of food items and other consumables impact negatively on the purchasing power of consumers and the sales of food items in the market.
The price of a paint-tin of garri has increased from N750 in June 2023 to N2,200, a carton of noodles bought for N3.500 mid last year now sells for N10,000. A paint-tin of beans sells for N5, 500 against N2,500 last June, while the same measure of rice rose from N900 to N1,800.
Deeper Impact
“Nigerians are hard-hit and bleeding from all sides because of the drastic reduction in their purchasing power triggered by a massive devaluation of the naira. They are choked with a high cost of living that makes life difficult. More disturbing is that we do not see an end in sight because the trouble is far deeper than what anyone can imagine,” said Agada.
The Bizarre
Across the states, Nigerians witness bizarre acts of frustration among the citizens over the hardship that spreads like an infection. This includes the sale of their children to make ends meet.
In January, the Police in Anambra State arrested a 38-year-old mother of 11, Chinyere Chukwu from Okija in Ihiala Local Government Area, caught attempting to sell her two sons for N1.1 million “because of economic hardship”.
A similar incident had occurred in Ogun last year where a 33-year old woman, Olaide Adekunle, was arrested for allegedly selling her 18-month-old baby for N600 in Sango-Ota to settle a debt.
A man identified as Marcel Udeh from Umunneochi Local Government Area of Abia State was recently nabbed by the Police for allegedly killing his son. The son’s offence was that he ate the last portion of food in a pot inside the family’s kitchen.
According to the story in a video that went viral online, hungry Mr Udeh was enraged that his late son could enter the kitchen to take food without getting permission from his father. In anger, he was alleged to have dashed into his room, brought out a gun and shot his son.
Explaining it Deeper
According to a psychologist, Dr Bamidele Oyelowo, “These are signs of anger, frustration and loss of hope in tomorrow. The situation is aptly captured in a Yoruba proverb, ‘Ebi ki n wo inu, ki oro mi wo be,’ which means literally that a hungry man is not ready for any kind of communication because he is angry.”
Dr Oyelowo noted that the hunger in the country is severe and could do much harm in the near future if it is not arrested because the ordinary Nigerian cannot earn enough income to cope with the high cost of available goods and services.
“This is what happens when a worthless currency chases valuable goods and services which, in turn, leads to impoverishing the people. Floating the naira at this time was a major policy gamble by the Bola Tinubu Administration. We may not come out of the misery in the near future, notwithstanding the fire-fighting approach by the government and the Central Bank of Nigeria,” Oyelowo told THEWILL in a telephone chat.
Professor of Capital Market at the Nasarawa State University, Keffi, Uche Uwaleke, said the floating of the naira was hasty and premature because the economy was not ready for the reform. He blamed the World Bank and the International Monetary Fund (IMF) for putting the pressure on Nigeria to float the naira.
“They pushed us to float the naira when we were not ready, only to turn around to slam us when the promise of increased forex inflow has yet to materialise. Now, we have been left in the lurch,” Uwaleke told THEWILL in a note.
Similarly, hundreds of residents of a community in Katsina were seen in a viral video looting food stuffs from trailers reportedly belonging to Dangote Group. The incident elicited reactions from different X users.
Organised Labour, Others
Unsettled by President Tinubu’s jibe at it during the commissioning of the Lagos Red-line, to the effect that the NLC strike has political undertone, the President of the NLC, Comrade Joe Ajaero, two days after embarking on a warning strike nationwide, said that issues of governance, social welfare, inclusion would be behind labour’s actions and he urged the President to implement the MoU signed with organise labour.
Some of the NLC’s requests included a review of the framework for the completion of rehabilitation work on the nation’s refineries; a review of the framework for the maintenance of roads and expansion of rail networks across the country; implementation of N25,000 cash transfers to 15 million poor households; tax waivers for workers, small businesses and the general public; setting up the National Minimum Wage Committee; provision of funds for MSMEs across the nation.
Government’s reaction
Speaking to THEWILL on the demands by the NLC and the expectations by Nigerians for speedy answers to their economic and social problems, a presidency source noted that government reforms take months to mature and so people think in the intervening months that nothing is being done.
“Reforms, such as the Federal Government is embarking upon, given the rot in the system, will not mature in nine or 10 months. That is why we are calling for understanding and patience. How many of us are aware, for instance, that massive capital importation has gone up by 66 per cent, compared to a 33 per cent decline in the first quarter of this year? I can tell you too that a 1 billion -dollar grant has gone into the health sector. Other reforms like the state police being pushed by the government will take some time to become reality because of the constitutional implications. The Students Loan Scheme is almost concluded and for the first time in any government history, a social security scheme is on the pipeline for Nigerians. So too is a consumer Credit scheme.”
Even so, in a frontal response to the financial threat to survival of most families across the country, President Tinubu had declared food insecurity a national emergency and consequently, set up a Committee on Food Emergency. He moved the assignment to his office and that of the National Security Adviser.
The Presidency recently set up a selected team of 16 stakeholders called a “tripartite” Economic Advisory Committee to solve Nigeria’s tripartite problems: a national currency on a free fall and foreign exchange crisis, hyperinflation and the high cost of living.
Some states, such as Lagos, Ogun and Borno have introduced palliative measures to help their people.
President Tinubu has maintained the plea to Nigerians to be patient over the biting economic hardship, which has thrown more Nigerians into multidimensional poverty.
The Governor of the Central Bank of Nigeria (CBN), Dr Olayemi Cardoso, is firing from all cylinders to rescue the falling naira through aggressive monetary policy measures. But little can be achieved in the near future amid a massively devalued naira that has lost over 200 percent of its value and ranked the third worst performing currency in the world.
Experts maintain that overlooking low productivity, worsening insecurity, poor infrastructure, particularly electricity, amounts to treating symptoms against the cause.
Many multinational companies are shutting down and leaving the country. Foreign investment is lagging, leading to job losses and a rise in the misery index. This, to them, is the basic solution that the government needs.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
