From Food Inflation to Exchange Rates: Nigeria’s Economy One Year After Electing Tinubu
A year ago, on Saturday, February 25, 2023, Nigerians, for the eighth time since the return of democracy in 1999, headed to the polls to elect their 16th President. It was a contentious election presided over by polarising campaign trails that divided the nation not only on political lines but also along religious and ethnic lines.
The election was a three-horse race. Peter Obi, the Presidential candidate of the Labour Party, gained popularity among the youths; Atiku Abubakar, a former Vice President, was the flagbearer of the People’s Democratic Party, and Bola Tinubu of the All Progressive Party, who was declared the winner of the poll by the Independent National Electoral Commission (INEC) on March 1, 2024.
But since that crucial election and Tinubu’s swearing-in three months later on May 29, 2023, millions of Nigerians, regardless of who they voted for, have been grappling with worsening economic conditions, which many have attributed to Tinubu’s economic reforms.
Soaring Cost of Living
The cost of living, caused by soaring inflation, has put many Nigerians on edge, with the country recording spontaneous protests—an issue the government has dismissed as politically motivated. However, available data from the National Bureau of Statistics (NBS) shows that the country is witnessing its worst inflation rate in three decades. A year ago before the election, inflation stood at 21.82 percent but has since jumped to 29.9 percent, according to recently released data from the NBS.
The high cost of food prices, despite the President promising to make food “more abundant yet less costly” during his inauguration, has pushed many below the poverty line, with many at risk of malnutrition. Rice, beans, yam, eggs, and other staple foods are largely out of reach for many Nigerians, with nearly 50 percent of the country’s minimum wage earners allocating all their monthly income to food.
There has been an attempt to mitigate the looming food crisis. On Friday, February 24, 2024, the government announced that 42,000 metric tonnes of grains are ready for distribution, with another 60,000 metric tonnes of milled rice to be purchased from Mega Rice Millers and distributed to vulnerable Nigerians. Last week, seven people reportedly died during a stampede as the Nigerian Customs Service (NCS) distributed seized 25 kg of rice pegged at N10,000 to residents in Lagos.
However, the hike in the cost of living that Nigerians are witnessing is a result of ongoing economic reforms.
Fuel Subsidy Removal
Arguably Tinubu’s first action as President, the former Lagos State Governor, who in 2012, in part, led a campaign against petrol subsidy removal, announced during his inaugural address that the regime, which previously gulped N4 trillion in 2022, is gone. Just hours later, the price of petrol rose from N250 to N600 and has since increased to N668, indicating a nearly 160 percent increase before the election.
But the removal, which the World Bank called the “first step towards restoring macroeconomic stability and creating more fiscal space,” has brought hardship to Nigerians, many of whom depend on subsidised petrol to power their homes due to inconsistent power supply and to propel their vehicles for either private or commercial purposes.
One of the most affected sectors is road transportation, which serves as the primary means of conveying food from the farms to cities. Between December 2022 and December 2023, intercity transport fares rose by 86.40 percent from N3,971.22 to N7,402.16.
Exchange Rate Reforms
Another reform that received international commendation from financial institutions was Tinubu’s exchange rate reform. The reform, announced by the Central Bank of Nigeria in June 2023, collapsed all segments of the country’s exchange rate into the Investors and Exporters (I&E) window. What followed was the depreciation of the naira by over 220 percent to N1500, skyrocketing the price of goods in Nigeria.
Rampant Insecurity
In his inauguration speech, Tinubu emphasised that “security will be the top priority of his administration because neither prosperity nor justice can prevail amidst insecurity and violence.”
However, Tinubu’s time in office has been marked by increased reports of kidnapping and attacks by herders in the country’s North Central region.
On December 24, 2023, as Christians in Bokkos and Barkin-Ladi communities in Plateau State prepared for Christmas celebrations, an unprovoked attack, allegedly by herders, resulted in the death of at least 160 people. Less than two weeks later, in Durbi, Jos East LGA community, gunmen invaded the home of Victor Itse, killing his 35-year-old cousin as his eight-year-old daughter watched in absolute shock.
“For four days, she was unable to speak,” Victor told Neusroom in an exclusive interview.
In another attack on Wednesday, January 24, 2024, in Mangu Local Government Area of Plateau State, 30 persons were killed.
Between February 25, 2023, when the election was held and February 25, 2024, data gathered from Beacon Consulting, a security Risk Management and Intelligence firm, showed that nearly 5,000 Nigerians had been abducted, while over 9,600 Nigerians had lost their lives as a result of insecurity.
