Tackling Nigeria's Cost Of Living Crisis

Since the purported removal of subsidy on petroleum products by the Tinubu administration, Nigerians have been passing through cost of living crisis. Inflation has spiralled, cost of transportation has tripped and this has driven up the price of essential commodities. The cost of living crisis in Nigeria has been a major concern for its citizens, as the high prices of basic necessities have made it difficult for many to afford a decent standard of living.

The Tinubu administration has stopped all social investment programmes because of entrenched corruption in the system. The most buffeting is the exodus of more than two dozen manufacturing companies. Michelin and Dunlop left Nigeria for Ghana way back in 2006. Sanofi has left Nigeria in 2023 owing to forex crisis P & G- an American Company has also left Nigeria in 2023. GlaxoSmithKline is packing out and Unilever Nigeria ceased to operate in December, 2023. TotalEnergies will limit it's operations to the deep sea only. Other companies that are leaving Nigeria include: Surest Foam Limited; Mufex, Framan industries, Stone Industries, Procter and Gamble, Equinox among several others.

It does appear that the Tinubu administration is not concerned about the mass exodus of manufacturing companies because there is no policy now that can guarantee investment security in Nigeria. Whereas government is scrambling to provide infrastructure, power supply is still epileptic to support manufacturing. When the cost of production is high, companies have low return on investment hence the Nigerian business ecosystem does not support investment in critical Sectors of the economy.

Amidst these challenges, government is contemplating increasing tariff on electricity. The contradiction is that whereas government has increased school fees on one hand, the same administration has floated the omnibus students loan scheme, which is difficult to operate due to lack of accurate data. Tinubu is metaphorically frying the nation on the altar of IMF inspired reforms such as devaluation of the naira, removal of subsidy and recalibrating the exchange rate by floating the naira.

One of the most effective measures to alleviate the cost of living crisis is to increase the minimum wage. In 2019, the Nigerian government approved an increase in minimum wage from 18,000 naira to 30,000 naira, which has helped workers cope with the rising cost of living.

The Federal government has also implemented subsidies for basic necessities such as food items, fuel, and electricity. This helps to keep the prices of these essential commodities in check and make them more affordable for the citizens.

Prior to 1960, Nigeria relied on agriculture for sustaining the nation. Nigeria is an agrarian country, but the sector has been neglected for so long. To reduce the cost of food, government has made significant investments in agriculture, providing farmers with modern tools, training, and access to credit. This has increased food production and helped to stabilize the prices of food items. Besides, the Nigerian economy is heavily reliant on oil as its main source of revenue. It is high time Nigeria invested in other sectors such as manufacturing, agriculture, and tourism, which can create more job opportunities and reduce the cost of living.

Whereas price control price control negates neoliberalism, government should also put in place price control regulations to prevent traders and retailers from taking advantage of the high demand for goods to inflate prices. This will ensure that essential commodities are sold at reasonable prices, making them more affordable for the citizens.The Nigerian currency, the Naira, has been facing significant devaluation, which has contributed to the high cost of living. Until Nigeria embraces production, the naira will continue to slide.

To address this issue, the government has put measures in place to strengthen the Naira, which would reduce the cost of imported goods. Nigeria's economy can be as weak as her currency.

Infrastructural deficit also contributes to a high cost of production. Inadequate infrastructure, such as roads, power supply, and transportation, can lead to increased costs of goods and services. Unemployment is a significant contributor to the high cost of living in Nigeria. To reduce this, the government has to initiate job creation programmes to provide employment opportunities for the youth. This, in turn, will increase their purchasing power and reduce the cost of living.

High inflation rates lead to an increase in the cost of living. The government has put in place measures such as fiscal and monetary policies to control inflation and stabilize prices of goods and services. The government has also implemented policies to improve the ease of doing business in Nigeria, which will attract more investors and create more job opportunities. This will lead to economic growth, which can help to curb the high cost of living.

To curb the high cost of living in Nigeria requires collaboration between the government, private sector, and citizens. It is essential to have ongoing dialogue and partnerships that can lead to effective solutions to address the cost of living crisis.

The cost of living crisis in Nigeria is a complex issue that requires a multi-faceted approach to address it. The government must continue to implement and strengthen the measures mentioned above, while also considering other innovative solutions to improve the standard of living for its citizens.

Nigeria is bedevilled by weak leadership, weak economy , weak institutions and weak governance culture. The Tinubu administration should embark on pro-poor policies to put the situation in check. In the foreseeable future, Tinubunomics is failing and the Federal Executive Council and the National Assembly cannot be indifferent to the plight of Nigerians.