Engagements with Chidi Amuta
President Tinubu delivered a mostly predictable Independence Day address to the nation. In one respect, the speech was somewhat different. It sang about the new statistics of economic recovery that Western media and domestic economics elite have recently been rehashing. The external reserve has climbed to the neighbourhood of $50 billion, a record in recent times. The straspheric exchange rates of the Naira of the major world currencies has cooled to a more stable but nonetheless high range. Speculations about increased foreign investor interest are sporadic. On the whole, the President saw these signals as evidence that the “reforms” he introduced on ascension in May 2023 have begun to yield positive results towards a recovery in the Nigerian economy.
Most of those who heard the word ‘recovery’ in the President’s speech looked at each other in consternation. Was this speech about Nigeria? Was it addressed to our nationals or a foreign audience? The spirit of speech was in conflict with the reality on the ground. It evoked the usual argument between trickle down market economists and social democrats. Does macro economic statistical improvement equate economic recovery? Are statistics the same as the lives of real people? When will Tinubu’s Nigeria get to that point of convergence between statistics and the real life experiences of people?
On the contrary, the vast majority of Nigerians who have remained victims of the Tinubu reforms hardly listened to the presidential address. The statistics on which the optimism of the president was founded sounded alien to them. Gasoline prices still hover around N1,500 per liter. Electricity remains unaffordable where it is available. The cost of urban intracity and intercity transportation has escalated. Children of many honest parents have dropped out of school because parents can hardly pay school fees on wages that can only guarantee near starvation existence. Those with terminal ailments have surrendered to the Almighty as they wait to die since the hospitals are mostly open to the rich. Gradually, the affordability crisis in Nigeria has crossed the border between what is affordable and who can afford to survive.
In the last few days, the labour unions have issued a new wage related ultimatum to the government and organized employers. Labour unions are seeking a new minimum wage of N500,000 even with the knowledge that most states have not yet paid the N70,000 agreed on over three years ago. In addition, labour is insisting on a fixed pump price of no more than N500 per liter for PMS. No one knows how and where negotiations on these issues will take us. A combination of government-labour face-off and partisan brawls over the 2027 elections opens up a nightmare scenario that only the courageous dare contemplate.
There have been more frightening revelations on the economy in recent days. Figures released by the National Bureau of Statistics (NBS) in collaboration with Enhancing Financial Innovation & Access (EFINnA) has indicated a more alarming trend. Nigerians now borrow money from banks and financial institutions to finance their daily consumption needs. Very little of the borrowed funds are being deployed to productive ends like capital expenses and business development and enhancement. In summary, an estimated 41% of formal borrowers applied their credits to coping and consumption. These are not consumption for luxury or capital good acquisition but for basic needs such as feeding, school fees, and healthcare. An economy in which such a large percentage of formal borrowing is dedicated to household items cannot be said to be recovering by any definition. Mere improvements in macro economic indicators cannot be deemed economic recovery when the material conditions of daily life of the majority continues to deteriorate. Elsewhere, the things that signal economic recovery are not hard to see. Registration of new cars, upswing in retail demand and sales, new housing developments and registration of new small to medium businesses etc.
Nigeria’s affordability crisis is not quite like those being witnessed in other countries especially the developed economies of the West. Spain has been witnessing a series of street protests over housing shortages and unaffordable rents. Similar living cost protests have also taken place in France. We may recall that it was the affordability crisis that recently powered the rise of Mamdani to win the New York City mayoral election, thus empowering a social democratic uprising in US politics.
Nigeria’s affordability crisis is different. What is happening in the West is the inability of those who were living tolerable lives to continue to afford the rising costs of basic goods. On the contrary, the Nigerian affordability crisis is substantially different. It is the deepening of the pauperization of the majority poor. It is the added deprivation of the majority who had nothing before from basic access to the most elementary things that make life liveable. Those who have had nothing are being denied access to anything whatsoever. Worse still, it is the erosion of any hope whatsoever that these people will ever migrate from Poverty Land to anything better in one life time. The little hope and access they once had has been snatched and eroded by ‘grab and run’ politicians through the removal of all sorts of subsidies on fuel, power, tariffs and food. These subsidy removals and utility price hikes, now dubbed ‘reforms’, were introduced without due consultation, homework or any form of systematic thinking before they were inaugurated. There were no war games about the scenarios, no calculations, no projections and no considerations of consequences.
And yet, campaigns for general elections are raging.
The campaigns are dominated by a single item-removal of subsidy on petroleum products. Each of the major contenders has pitched his tent on the matter. For Tinubu, retention of subsidy removal is an item of political survival. If he loses the 2027 elections, out goes his petroleum subsidy removal with full consequences. Atiku is rooting for total abrogation of the subsidy removal regime and its replacement with sale of Nigerian crude to refurbished Nigerian refineries in Naira to force down gasoline pump prices. Peter Obi is not quite sure where he stands on this matter. Initially he would stick to subsidy removal to be reviewed after he must have defeated corruption. Now he is on the side of those who insist on immediate subsidy restoration.
Obsessed with this single item in the 2027 campaign, the political elite is in a pitiable quagmire. The nation is stuck in the politics of people I earlier referred to as ‘petrol attendants’.
The politics of laziness is fixated on oil and gas incomes and subsidies. Above this, it is all about election as political duel, not as a mandate revision exercise to re-imagine governance and renew service delivery. No one is looking at strategies and ideas to explore other possibilities to seek solutions to the many challenges that confront the nation. As things stand, if your wards need jobs, wait for petrol subsidy money to be collected and reinvested. If you cannot pay your hospital bills, wait for petrol subsidy money. If your village school is in disrepair, wait for the petrol man!