As Nigeria braces for the uncertainties of 2024, the Misery Index has surged under Tinubu’s seven-month-old administration, presenting a challenge for economists predicting the nation’s economic trajectory amid persistent challenges.
Although the 2023 Hanke’s Misery Index has not been released, Nigerians’ plunge into poverty can be felt literally on the streets and in homes, with the continued rise in inflation.
Starting in 2023 at approximately 73.05, Nigeria’s misery index has escalated. Economists like Dr. Ikchukwu Okafor and Dr. Gbenga Omotosho forecast a crossing of the 100% threshold in the upcoming Hank’s report, citing significant economic shifts since June 2023.
Okafor highlights soaring food prices, exemplifying a bag of rice surging from N28,000 in June to N70,000 in December, impacting the entire agricultural value chain.
World Bank’s Lead Economist for Nigeria, Alex Sienaert, noted that the elimination of fuel subsidies in May had plunged over four million individuals into poverty by July ending.
The projection warns of an imminent increase, estimating 7.1 million more Nigerians slipping below the poverty line by December 2023 without urgent palliative interventions.
Presently, apart from a handful of states, substantial measures remain elusive post the removal of fuel subsidy and exchange rate unification.
The Misery Index, which reflects the 12-month Consumer Price Index (CPI) per cent change plus the unemployment rate, paints a worrying picture for Nigeria. As of the end of the 3rd quarter of 2023, the country’s CPI stood at a high of 27.33%.
Despite assurances from the CBN Governor, Finance Minister, and government officials about a better economic outlook, numerous economists remain skeptical due to the persistent depreciation of the naira.
Hanke’s Annual Misery Index delves into Nigeria’s economic hurdles, considering indicators like unemployment, inflation, bank lending rates, and GDP per capita. Current rankings place Nigeria among the world’s top 50 most afflicted nations.
Dr. Nelson Nkwo, a financial economist at Ebonyi State University, emphasizes the need for prioritizing good governance, anti-corruption measures, poverty reduction, human rights, economic stability, regional cooperation, and innovation to tackle challenges and foster economic growth and sustainable development.
Facing economic challenges marked by soaring unemployment, inflation, and lending rates, the expert emphasized that solutions won’t materialize overnight.
According to Umar Sagagi of Growth Concepts, overcoming Nigeria’s economic challenges requires decisive action and effective leadership, prioritizing citizen well-being and implementing sustainable economic policies.
He advocates learning from successful economies, adapting transformative strategies, and embracing a comprehensive approach involving economic reforms, education investments, entrepreneurship promotion, institution strengthening, infrastructure improvement, and regional cooperation.
Sagagi emphasizes the importance of prudent fiscal policies, controlling government spending, promoting transparency, and creating sustainable jobs through investments, entrepreneurship, vocational training, and public-private partnerships.
Additionally, he highlights the significance of political stability, peaceful societies, conflict resolution, democratic institutions, the rule of law, human rights, and citizen participation for long-term economic growth and favourable investment environments in African nations.
Professor Tayo Bello from Adeleke University emphasizes Nigeria’s need for a sustainable future through prioritizing infrastructure development and regional integration.
Promoting decentralized renewable energy, such as mini-grids and community-owned projects, can provide electricity to remote areas, reducing dependence, saving costs, enhancing security, lowering emissions, and stimulating local economies.
Successful implementation requires government support, financial incentives, and collaboration with the private sector.
While some economists believe that President Tinubu’s policies hold the potential to unlock the country’s economic growth, others caution that the pace of reforms may be too fast for the masses to keep up, leading to increased poverty levels.
While acknowledging the president’s positive policy decisions, Professor Uche Uwaleke, Nigeria’s first capital market professor, emphasizes the need for effective sequencing of reforms.
Also, Dr. Muda Yusuf, CEO of CPPE, supports the reforms but urges swift provision of palliatives for the most affected poor masses.
Bismarck Rewane, CEO of Financial Derivatives Company warns that public discontent may rise if the benefits of subsidy removal aren’t felt soon.
However, Gbenga Johnson, an economic affairs analyst, believes that the masses have accepted the sacrifice, they see subsidy removal as beneficial, suggesting past subsidies favoured the rich.
Johnson believes the absence of widespread riots indicates the effects on the masses may not be as severe as feared.
Under President Tinubu’s economic policies, Nigeria’s Misery Index paints a concerning picture, necessitating swift and targeted measures to alleviate poverty and reform impacts.
Balancing economic growth with social welfare is crucial for a stable and prosperous future, though predicting the masses’ endurance in the current economic affliction remains challenging.
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