Economic reforms are underway in Nigeria, but right now, medicines, food and other basic goods are priced beyond the reach of many.
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| The worst economic crisis in decades has left Nigerians reeling. (Source: Getty Images) |
Toyin Ogundeko, a Lagos resident who works as a caterer, struggles with asthma. Her son also has the condition. But medicine in Nigeria has become so expensive that they cannot afford basic necessities.
Amid the worsening economic crisis, Ogundeko was at a loss as to how he would get through it.
“With the current economic situation, things are really tough,” she said. “People are struggling to buy food and trying to stock up on medicine.”
Difficulty on top of difficulty
Nigeria’s worst economic crisis in decades threatens to cost it its place as Africa’s largest economy. And inflation and a volatile exchange rate are driving up the cost of living in the nation of more than 200 million people.
Higher drug import prices push up domestic drug prices and make basic medicines scarce. Pharmacist Emmanuel Olaogun Oladeji says Nigerian drug manufacturers simply cannot bridge the gap.
Analysts predict that Nigeria could drop to fourth place in the list of African economies by 2024.
Currently, businesses are struggling to stay afloat.
Nigerian President Bola Tinubu has embarked on a series of bold economic reforms that he says are necessary and will pay off in the future. One example is the decision to eliminate fuel subsidies. However, this decision has led to a doubling of fuel prices, increased food and transport costs, and a significant increase in the prices of imported products.
According to financial analyst and former banker Aminu Philip Yado, high fuel costs are affecting people widely.
“Transportation is one of the main factors affecting product prices in the market,” said the analyst.
Nigerian labor unions have called for several nationwide strikes because wages are too low to keep up with inflation.
Businessman Alhaji Sani Nasidi said inflation is what is causing companies to leave Nigeria because they will not make profits. The quality of goods and services will decline and people will not have money to buy.
Nigeria also faces an energy crisis.
After abolishing fuel subsidies, President Bola Tinubu also abolished a series of electricity subsidies. Most business owners were forced to buy generators to maintain operations. Financial analyst Aminu Philip Yado said that this trend is unsustainable. If electricity is available, businesses will return to operating at a cheaper cost than they are now, thereby cooling down the prices of some items.
The economy needs innovation
In February 2024, the Nigerian Naira hit an all-time low against the US dollar on both the official foreign exchange market and the US dollar, sliding to nearly 1,600 against the greenback.
“A weaker exchange rate will increase imported inflation, which will exacerbate price pressures in Nigeria,” Pieter Scribante, senior political economist at Oxford Economics, said at the time.
Shrinking disposable income and worsening cost-of-living pressures will remain concerns through 2024, continuing to hold back consumer spending and private sector growth, the economist said.
Meanwhile, businessman Alhaji Sani Nasidi said: “What is causing our problem in Nigeria today is the devaluation of the national currency against the US dollar. The prices of essential commodities have increased sharply. To get out of the current crisis, the country needs to get out of the US dollar economy.”
Mr. Yado also found that the lack of focus on investing in critical infrastructure and creating jobs for young people was a major factor in deepening the economic crisis.
“The economy needs innovation!” financial analyst Yado asserted.
Source: https://baoquocte.vn/doi-mat-voi-khung-hoang-toi-te-nhat-nhieu-thap-nien-nigeria-co-the-mat-ngoi-vi-nen-kinh-te-hang-dau-chau-phi-278846.html
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