• Inflation rises by 11.28% in one year
• Nigeria records 45% decline in SMEs in two years
• Falling purchasing power stifling industrial growth, says Adi
On May 29, 2023, when President Bola Tinubu took office, the headline inflation was 22.41 per cent. A year into his four-year tenure, the figure has risen by as much as 11.28 per cent to 33.7 per cent. But the figure stops at official reckoning as Nigerians, who have had to bear the pangs of forced reforms, said prices of essential consumables have increased by over 100 per cent.
As of today, a sardine that was sold for N300 one year ago now sells for N1,200, while a tin of peak milk sold for N250 then now costs N700. Spaghetti was bought for N300 last year May, but it now costs N900, and beans (derica measurement) which were sold for N350 now sell for N1,400.
Frozen fish that Nigerians were buying for N700 last year now cost N3, 000 and 10 pieces of tomatoes that were sold at N250 now go for N2,500.
However, the gross domestic product (GDP) growth rate also shot upward from 2.51 per cent last year to 2.98 per cent, yesterday, when President Tinubu celebrated his first year in office.
The monetary policy rate (MPR), a policy for tackling inflation, went from 18 per cent to 26.25 per cent within a year while public debts also recorded an upward movement, from N97.34 trillion to N87.38 trillion this year.
The foreign reserves also dipped to $32.74 billion this year as against the $35.09 billion it was as of this time last year.
A professor of economics at the Lagos Business School, Bongo Adi, said lowering the purchasing power of average Nigerian workers is a disincentive to investment.
He said: “With the removal of subsidy on petrol and liberalisation of the FX market, the earning of workers has remained the same. Which investor will bring money into an economy where the people lack the purchasing power to buy what has been produced?”
Though he argued that the government did not have a choice to liberalise the FX market and remove the petrol subsidy when it came in last year, he stated the government also failed to put in place policies that should address the shocks of the reforms.
He explained: “The petrodollar that was available to Nigeria enabled her to sustain an FX market that it could defend. But when the source was significantly reduced, the new government had no choice but to float the naira. The government was helpless. But, on the removal of petrol subsidy, what has been happening since last year indicated that policies that were needed to provide alternatives were not on the ground.”
Adi also queried why the government has not taken the opportunity gas offered since the war between Russia and Ukraine broke out and the tension in the Middle East.
“There is a new Cold War for gas and Nigeria is awash with gas which nobody is talking about. I have not seen any serious efforts on the part of the government to take advantage of this,” he stated.
Adi insisted that the Federal Government is yet to put in place policies that can tackle the challenges confronting Nigeria.
A public analyst, Olufemi Awoyemi, said the ‘bold and daring’ policies the President promised during his inaugural speech on May 29, 2023, have turned into a nightmare as Nigerians’ purchasing power has plummeted.
He said: “It seems the objectives and goals were simple. Still, after one year in office and given the outcomes, it may seem that a chain of mixed reactions has formed, trailing the government’s competence and ability to deliver on the promise of renewed hope.”
Another public analyst, Kalu Aja, observed that though the speech of President Tinubu on May 29, 2023, was appealing and reassuring, one year down the road has little to show in terms of achievement.
“Reforms announced were reversed in secret, programmes were implemented poorly, and a real sense that there are no adults in the room has taken over; just look at the clown show of the media team. The President today will struggle to point to one clear, tangible and significant accomplishment of his administration in 12 months after the record budgets and spending,” he said.
He charged the President to return to his natural habitat, saying, “The President’s instincts as a political juggernaut are not lost; he needs to return to his natural roots and run an open, inclusive government that supports all Nigerians. Mr. President, let your words, actions and team signify you intend to be a President for all, not for those who sign songs about you.”
In renewed efforts aimed at stabilising the FX market targeting an exchange rate of N1,200, the Central Bank of Nigeria may have resorted to selling dollars below the market rate.
The source said the apex may have been selling on the back of an anticipated $1.3 billion Non-Deliverable Forward that matured yesterday, Wednesday.
This may yet affect the unofficial market as the dollar was exchanged for N1,490 while the buying rate was N1,470 for one dollar.
MEANWHILE, the Ministries of Power, Finance, Petroleum and Agriculture have ranked low in terms of their performances in the last year of President Bola Tinubu.
According to the poll conducted by Africa Poling Institute (API), titled, ‘Nigeria Speaks’, which assessed the performance of the Tinubu-led administration in the 12 months, hunger, poverty and dissatisfaction are the major concerns of Nigerians.
The poll saw 3,996 respondents surveyed, out of which 51 per cent were men and 49 per cent women, segmented into three age groups 18-34 years (33 per cent); 25-60 years (65 per cent) and over 60 years (two per cent).
78 per cent of respondents rated Mr. President poor, while only 22 per cent scored him good.
In the survey, 36 per cent of Nigerians claimed the biggest challenge they faced in the last 365 days was hunger; 28 per cent claimed inability to meet basic needs; 13 per cent, unemployment; nine per cent, heightened insecurity and five per cent faced electricity outages and blackouts.
In terms of ministers’ performance, 44 per cent of the people scored the Ministry of Power, headed by Adebayo Adelabu, low; 27 per cent scored the Ministry of Finance led by Wale Edun, low. 22 per cent of respondents ranked the Minister of State for Petroleum Resources, Heineken Lokpobiri as one of the least performing ministers. 20 per cent of respondents also claimed low performance on the part of the Agric Ministry, led by Abubakar Kyari.
Five other ministers, however, were seen to be performing. 27 per cent of respondents scored Minister of Education, Tahir Mamman, high. About 25 per cent of those surveyed said the Minister of FCT, Nyesom Wike is doing wonders in Abuja, while 21 per cent ranked Minister of Works and Housing, David Umahi among the performing ministers.
With 14 per cent, the Minister of Communications, Innovation and Digital Economy, Dr. Bosun Tijani and 12 per cent for Ali Pate, Coordinating Minister for Health and Social Welfare, they ranked among the top performing ministers.
The performance of the National Assembly was also touch-lighted. 48 per cent of respondents believed that the 10th Senate under the leadership of Godswill Akpabio performed very poorly in the last year. Only three per cent rated the Senate well, while 33 per cent believed the chamber has performed poorly.
For the House of Representatives, led by Tajudeen Abbas, only three per cent of respondents believed the House is doing anything positive. 45 per cent said they have performed very poorly, while 34 per cent observed poor performance.
About 44 per cent of respondents said the judiciary under Justice Olukayode Ariwoola performed very poorly; 31 per cent saw their performance as poor; 20 per cent said fair and five per cent rated them good.
CONSEQUENTLY, the actions and inactions of the previous government and the Tinubu-led regime, indeed have brought untold hardship to the SME sub-sector in the country, which resulted in a sharp decline in the last two years.
The 2023 Social Statistics Report by the National Bureau of Statistics (NBS) highlighted a 45 per cent decrease in the total number of individuals operating as small-scale businesses across various economic sectors, dropping from 246,200 in 2020 to 170,098 in 2022.
This decline presented a significant challenge to Nigeria’s ambition to achieve a $1 trillion economy, as small-scale industries are considered the driving force behind economic growth. In 2020, there were a total of 246,200 small-scale industrialists, which decreased to 213,402 in 2021 and further dropped to 170,098 in 2022. While no reason was given for the massive decline in the number of SMEs operating in the country, several factors likely contributed to the decline in the number of SMEs, including economic instability, policy and regulatory challenges, access to finance, infrastructure deficiencies, high input and energy costs as well as FX issues.
Experts have posited that this consistent decline has far-reaching implications for the country’s economy, as SMEs provide employment, contribute to the GDP and foster innovation and entrepreneurship. This has led to higher unemployment rates, reduced economic diversification and diminished economic resilience.
The agriculture sector experienced a relatively moderate decline, from 39,109 SMEs in 2020, to 36,431 in 2021 and 36,348 in 2022. ICT sector experienced a more pronounced decline, from 33,842 in 2020 to 28,816 in 2021 and 23,101 in 2022. In the manufacturing sector, there were 27,723 SMEs in 2020, 20,736 in 2021 and 17,450 in 2022, a 37 per cent decrease.
The wholesale and retail trade sector saw a significant reduction in the number of SMEs from 44,397 in 2020 to 42,229 in 2021 and a sharp drop to 22,488 in 2022, a 49 per cent decrease, reflecting the severe impact of economic conditions on consumer behaviour and business operations.
