Global Misery Index Reflects Nigerians’ Misfortunes

From being a potentially prosperous haven, Nigeria is transforming into a place of excruciating misery. Further attestation of the country’s steady descent into a land of woes comes from Hanke’s Annual Misery Index, a global economic survey of countries in which Africa’s most populous country has plunged four places, falling from 15th in 2020 to the 11th most miserable territory in 2021. Undoubtedly, inequality, poverty, unemployment and economic hardship are rapidly confounding to make Nigeria an unlivable contraption. Led by all levels of government, all hands should be on deck to stem the decline.

Because of its lethargic, anachronistic and pedestrian economic choices, the regime of the president, Major General Muhammadu Buhari (retired), does not deliver on the fundamentals of governance, in particular on the economy, which research has just reiterated .

Led by Steve Hanke, Professor of Applied Economics at Johns Hopkins University, Maryland, USA, the research focuses on four salient parameters: inflation; loan rate; unemployment figures; and GDP growth. Nigeria fared miserably in all categorizations in 2021. Out of 156 economies assessed, it was the 11th most miserable country. In Africa, it is better than only Sudan, Zimbabwe and Angola in misery.

It is shameful that Nigeria is ranked with the aforementioned trio. It’s a nasty stain on the regime in place and the previous ones. Sudan is perpetually ravaged by civil war; Zimbabwe has yet to recover from the atrocious era of Robert Mugabe; Angola is being ransacked by grand larceny of power that plunders its oil wealth.

With its enormous oil and gas resources, Nigeria is potentially an economic giant. It is the 13th largest oil producer and 10th largest by gas reserves in the world, earning $565.5 million from crude and gas sales in the first quarter of 2022, according to the Nigerian National Petroleum Company. On the ground, this has not translated into improved human development indices. On the contrary, in 2018, Nigeria acquired the notorious title of world capital of extreme poverty. From 87 million that year, more than 90 million Nigerians now live in extreme poverty. It’s a euphemism for misery. Nigerians are finding it increasingly difficult to feed themselves as food prices soar.

The reasons for mass poverty are obvious. Long disjointed, under Buhari, the economy plunged into turmoil. His policies are causing pain to the majority. Since taking office in 2015, the country has experienced two recessions. In 2020, Nigeria recorded negative growth of -1.8%. It was -1.6% in 2016. For a country of 211 million people struggling with a GDP of $432.29 billion (2020), this translates into massive deprivation.

The result is that unemployment, which was 14.4% in January 2017, rose to 23.1% in 2018, 27.10% in 2020 and is currently at 33.3%. Every year, millions of young people enter the labor market with little hope of getting a job. Due to the COVID-19 pandemic, 20% of full-time workers lost their jobs in 2020, according to the National Bureau of Statistics, which accentuates youth unemployment variously estimated between 42.5% and 55%. It makes the misery worse.

Inflation has become monstrous. The current NBS figure of 15.92% is likely an underestimate as Nigeria is highly dependent on imports for basic necessities and raw materials for industry. With the value of the naira deteriorating every week, the cost of goods and services is rising astronomically, worsening inflation. This throws planning overboard. On the other hand, annual inflation in the euro zone should be 7.5% in March, against 5.9% in February, according to the European Union.

Although it is an oil producer, factories are closing due to unsustainable energy costs. Prices for diesel, aviation fuel, gasoline and lubricants are on the rise. Electricity production fluctuates between 2,000 megawatts and 5,000 MW despite billions of dollars invested over the years to boost it. Consequently, industrial production is limited and costly as alternative energy increases the cost of goods by 40%, according to the Manufacturers Association of Nigeria.

Debt is at record highs as government revenues decline. To build social infrastructure, the government borrows massively. Plus, he prints money – Ways and Means – to survive. It hurts that there is no concise economic policy apart from superficially distributing money to a few through token measures like TraderMoni and Market Moni.

With the Central Bank of Nigeria’s benchmark lending rate at 11.5%, borrowing costs are prohibitive for businesses. Worse, it is difficult for them to obtain foreign currency to import raw materials. They resort to the parallel market, where the rates fluctuate between N595 and N600 to 1 USD. At the start of the Buhari regime, it was 199 naira to 1 dollar.

To reverse the extreme misery index, Buhari must urgently review his economic policies. First, executive orders on the economy, especially on seaport operations, should be revived and implemented. It should be obvious to the regime that export and import barriers are hurting Nigeria’s economic growth. The excruciating delays must be tackled head-on through technological solutions and modernization of port infrastructure.

Second, the president should privatize refineries and all the other pinnacles of the economy. Without electricity at an efficient price, increasing industrial production is a mirage. Revenue from sales should be redirected to electricity and infrastructure.

Beyond that, the 36 state governments should become productive. Instead of depending on lower federal allocations, they should take giant steps to make their states independent economic units by attracting investors and providing the enabling environment necessary for businesses to thrive.

All this is impossible without a new security structure. The current policing system has failed miserably. To end the siege of insecurity, states must strengthen local security capacities and agencies. Together with federal and state legislators, they should urgently promote the adoption of the “doctrine of necessity” to delegate police responsibilities. This will allow farmers to return to their farms and help revive trade and tourism.

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