While Nigeria was ranked the 118th happiest country out of 146 countries in the world under a survey, an independent report from Steve Hanke, an economist from Johns Hopkins University ranked Nigeria as the 11th most miserable country in the world in 2021 and the 4th most miserable African country to live in through his Hanke’s misery index.
The index is derived from the sum of the year-end unemployment, inflation and bank lending rates, minus the annual percentage change in real GDP per capita. Meanwhile, from the latest data published by the National Bureau of Statistics (NBS), Nigeria’s unemployment rate stood at 33.3% as of Q4 2020, the inflation rate stood at 15.7% as of February 2022 while the Maximum lending rate at 30.7% as reported by the Central Bank of Nigeria (CBN). The report claimed that Nigerians were worse off compared to 2020, due to high inflationary pressures and a high unemployment rate.
The past six years have been indeed unpleasant for Africa’s largest economy. While the country was still reeling from the effects of the 2016 recession, occasioned by a downturn in the crude oil market alongside violence that disrupted her oil production, little did the country know that Covid-19 was to strike without warning, pushing more Nigerians into trenches. The country’s currency has suffered severe devaluation which has caused significant upsurge in prices considering its heavy dependence on imported consumables & intermediate goods.
Inflation remains at double digits level, and even though the GDP growth was almost at par with population growth rate in 2021, the growth was driven mainly by base effects. Income levels remain very low while inflationary pressures have severely weakened consumer purchasing power. Utility costs have been on the rise with increases in electricity and fuel costs over the past few years. Food prices have continued to increase. Business operating environment remains hostile with foreign direct investment flows into the country at historic lows. Insecurity concerns continue unabated particularly in the Northern part of Nigeria.
In the same vein, the World Bank estimates that additional 5million people will fall below the poverty line in 2022, putting Nigeria’s poor people at 95.1million by the end of 2022, approximately half of the population. Not admitting the dire poverty conditions many Nigerians have fallen into would be a rare case of burying one’s head in the sand like the proverbial ostrich.
Without a doubt, we agree that a lot of structural and fiscal reforms are required to get Nigeria out of the woods and on the path to sustainable growth and development. The recent increase in oil prices, which should ordinarily mean well for revenue generation has not been positive for Nigeria as a whole given significantly low production levels and a substantial increase in subsidy payments on the other hand.
Total dependence on oil makes Nigeria continuously vulnerable to economic shocks, so diversification is a logical step to paring reliance on oil. Nigeria has the 12th largest iron ore reserve in the world. Reserves of some minerals, such as lead, baryte, coal and bitumen, are specific to only Nigeria in SSA. These reserves represent an untapped opportunity for the nation to enrich its mining portfolio. While Nigeria has more gold reserves than Burkina Faso and the DRC, gold production has been the lowest in Sub-Saharan Africa (SSA), underscoring the dearth of large-scale production facilities in the country.
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