After the pain comes relief
DSuffering in the land
It is plain we’re in a terrible situation
Sufferin’ in the land…
The rich get richer and the poor get poorer Sufferin’ in the land
Everything’s getting higher and the time
Getting’ tougher
Sufferin’ in the land…
These are the philosophical lyrics of a popular song by the Jamaican reggae star, Jimmy Cliff, in the early 1970s.
At about the same period another trending reggae group, The Pioneers, released their album, ‘ Starvation’:
Starvation is spreading towards the nation There must be someone to help this situation….
Jamaica was going through a socio- economic crisis at the time, including a crime wave featuring assassinations. This was the situation which inspired these songs that gained wide acceptance among the youth in southern Nigeria.
One wonders whether the Jamaican situation at the time is comparable to that of our Nigeria of today where major parameters of a failed state seem to be manifesting. These key indicators include nsecurity, characterised by large ungoverned spaces dominated by bandits, kidnappers, terrorists and sundry criminals; crippling corruption; a dysfunctional economy defined by growing multi- dimensional poverty, food scarcity, galloping inflation and a crashing national currency. All this is happening amidst a political class seen by many, rightly or wrongly, as being self- serving and insensitive.
How did we get to where we are today? The economic crisis originated in the country’s distorted political economy and macro- economic environment of which the fundamental factor can be summarized in three words: lack of production. There can never be any sustainable socio- economic progress without a productive economic base driven by a robust entrepreneurial class in a state under the control of an enlightened and competent political leadership. Instead what we have is an unproductive rent- seeking economy that imports everything from toothpick to petroleum products that we should be exporting. This defective economic fundamental has been aggravated by industrial scale corruption.
The problem did not originate with the current administration. What is happening now is an explosion of decades of festering and unresolved economic, political and social problems. President Tinubu only triggered the explosion in his attempt to confront the problems inherited by his government by taking what he considered bold decisions which previous governments had avoided.
The issue of an unproductive monocultural economy has been with us since the first oil boom of the 1970s. Poverty has been growing in the country since the first major attempt to liberalise the economy through the Structural Adjustment Programme ( SAP) in the 1980s. The degradation or absence of critical infrastructure for development – power, roads, railway, seaports – is an old, familiar story.
For more than a decade, successive administrations were not unaware of the devastating scandal that the petroleum subsidy was. As well- intentioned as President Buhari was, it may be difficult for his administration to claim ignorance of the illegal and economically damaging activities that were going on at the Central Bank of Nigeria ( CBN) and in the commercial banks.
These included widespread arbitrage aka currency round- tripping and blatant executive greed and exploitation by bankers as demonstrated in the humongous and obscene profits being declared by the banks, which is at variance with the economic reality of the country. In fact, it could be said that Buhari was betrayed by those he appointed to serve Nigeria.
The ever- growing public sector corruption connected to the political elite and bureaucrats is as old as anyone can remember. Corruption has severely hindered socio- economic development while shaming the country in the international arena.
Critical institutions that bear responsibility for the economic health of any nation and are therefore epitomes of integrity have been vastly undermined by corruption in Nigeria. How do we explain to the world that the nation’s former chief accountant, the Accountant- General of the Federation, who should symbolise integrity and professional diligence, was involved in multi- billion naira fraud? Or that the nation’s apex monetary institution has been permeated by illicit activities as it is being alleged by the Obazee Committee? Is there still any public individual or institution that is sacred in Nigeria? Corruption in Nigeria cannot be tied to any particular political party or government. One of Buhari’s famous quotes was “if Nigeria does not kill corruption, corruption will kill Nigeria.” This was a campaign slogan at a time when many Nigerians considered the PDP administration as being gigantically corrupt. Eight years of subsequent APC government did not improve the situation.
Tinubu’s formula for addressing some of these crippling socio- economic problems include further liberalisation of the economy by floating the naira, eliminating the costly fuel ( and electricity?) subsidy, reforming the CBN, increasing oil incomes by intensifying the campaign against oil theft, and reducing the cost of governance which is one of the most wasteful in the world. This policy package is what some have referred to as Tinubunomics, the current government’s brand of neoliberalism.
As bold and altruistic as Tinubunomics is, it is causing great pain. Although the degree of actual fuel subsidy has been an issue of debate because of the huge corruption surrounding it, its official removal has combined with the floatation of the naira, to contribute to the current uncontrollable inflation and spiraling cost of living.
Inflation in layman’s language is mainly caused by too much money chasing too few goods. Although there have been reports of excessive printing of unbacked paper money since 2015, it seems the current wave of inflation is more related to the foreign exchange crisis than to money supply.
Every single naira depreciation brings about immediate and often disproportionate increase in the price of goods and services. Sometimes the rate of increase seems ridiculous and inexplicable.
In less than two weeks in the first half of January cement price in Port Harcourt soared from 6000 naira per 50 kilogramme bag to N10,000. And in two days it jumped from N10,000 to N 15,000.