If the nationwide protest tagged #EndBadGovernance (the August protests) is done within the law and in a peaceful and civil manner, without violence (as observed at Ojota, Lagos Nigeria; on the 1st August 2024), the government would have no reason not to engage responsively, and apply the right policies that should rub off very positively on the nation’s macroeconomy and reverse the current biting hyperinflation plaguing the economy. No doubt, the economy, which had about $42 billion in foreign reserves as at 2006, is now overwhelmed by external indebtedness, currently totaling $91 billion of both domestic and foreign ($42 billion) debts that are suffocating our local currency by squeezing harder and tighter on the value and the worth of the already weak naira. Unfortunately, our currency has been so bastardised that the uncontrollable tumbling of the naira at the foreign exchange market perpetuates hopelessness through the high costs of food commodities in the majority of Nigerians; which says a lot about the hunger ravaging the land.
This is generally seen in the lamentations of many Nigerians and families who are currently experiencing economic hardship, reinforcing the saying that, “a hungry man is an angry man”. The helpless local currency, continuously weighed down, has led to the nation becoming so broke; with the cost of living soaring. There is no evidence in sight that the naira will gain strength because, according to the World Bank, about 96 percent of the nation’s revenue is spent on servicing debt. Unless the federal government intervenes with policies and measures that will improve the debt profile such as changing the current administrative style that is heavily burdened with rising cost of governance, especially its high recurrent expenditure and poor capital expenditure for the provision of infrastructure.
Cutting the cost of governance — recurrent expenditure or the overhead and personnel costs — presently, will be most unreasonable, considering what the populace is going through in the economy. Jean-Jacques Rousseau wrote on the marble that “when the people shall have nothing more to eat, they will eat the rich.” May it not be our portion in this economy because, if good governance is enthroned in our leadership tasks (void of high scale corruption) for the general good of the citizens in the land, protests by the masses that are economically oppressed shall cease forthwith. The ostentatious lifestyle of those in authority, the leaders that occupy various positions under the harsh economic situation facing the entire economy, is most embarrassing, and a clear proof of insensitivity by those leading the country. They are, therefore, urged to correct the wrongs, for the economy to come out of its current stagnation. There is no other reason why Nigerians are protesting, except that there is hunger in the land — families can no longer afford one meal a day; and they have practically been pushed to the wall.
Between June 2015 and December 2020 the immediate past administration borrowed N7.6 trillion, increasing $7.3 billion to $28.57 billion within the period under review, thus affecting the naira and devaluing the exchange rate from N197/$ to N381/$. Before this period in 2014, exchange rate and foreign debt were at N156.7/$ and $3.5 billion respectively. In all of these analyses, more debts means a weaker local currency, which invariably means that goods and services imported into the economy are more expensive, when compared to the little value recorded from its corresponding export side (based on the exchange rate for the local currency).
The way out of this economic mess and its attendant social woes is simple. Let the President and his team, first and foremost, support and encourage local refining of our crude oil by the operational and existing modular refineries and the gigantic Dangote plant at Lekki, Lagos; and ensure that they are fed with the feedstock they need and paid for in naira. This action alone, in a couple of weeks shall turn things around within the economy because, the high cost of refined products that are currently being imported (almost 100%) is the root cause of the entire sufferings and hardship (hunger) in the land.
Energy cost affects virtually every known economic activity within the economy. It is a known fact that if people are not hungry, anger shall be drastically reduced to the barest minimum, and that will make room for the labour force to gain strength and work at their various duty points hence, evidenced productivity. The weak naira shall start resurrecting from its battered state once the overloads and the burdens of external debts, alongside reduction in daily demands of foreign exchange to import refined products, are addressed by making sure that the locally refined products adequately satisfy the daily domestic demands of petroleum products — that is, the economy becoming self sufficient in her daily requirement of refined products. This economy will seamlessly improve and become better. It is in the hands of President Tinubu and his team to make it work. And it is also in the interest of his administration that hunger ceases permanently.
