Nigeria’s troubled economy, the danger of populism and the way forward, By Frank Nweke II

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Reading Time: 4 mins read

I find the news

on the purported sealing of Sahad Stores, Abuja on Friday, 16th of February by the Federal Consumer Competition and Protection Commission (FCCPC) very distressing. 

Recently, news reports quoted the Niger State Governor as having directed law enforcement agents not to allow the bulk purchase of grains within the state. 

A few days ago, while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions, the Minister of Agriculture said that the government was considering closing Nigeria’s borders to stem cross-border trading in grains.

This latter action and others contemplated by the government suggest that it has reached its wit’s end. It is an admission of cluelessness and incapacity and will only serve to further erode public trust and worsen Nigeria’s economic woes.

It is a disturbing signal to local businesses and potential investors. It is inconsistent with free market principles, which the government claims as underpinning the policy choices made since May 2023.

It is neither a thoughtful nor pragmatic response to the rampaging headline and food inflation, respectively at 35.4 per cent and 29.9 per cent, and exacerbated by insecurity, which has constrained food production and supply.

Pouring any kind of fuel into a fire that you do not want can only expand the size and scope of the fire.

It is difficult to accept the justification provided by FCCPC that prices charged at the checkout counter are higher than the price tags on products on the store shelves. Sahad Stores was also alleged to be hoarding goods. Since when did the government start fixing prices? I am sure that citizens will be pleased to avail the government of a list of items we would like the government to fix if the government has now resumed this task.

The daily flurry of circulars from the CBN and other economic departments of the FGN underscores the high turnover of policy options in response to the unprecedented volatility of the naira and the prices of goods and services across the nation.

Are we not witnesses to the nearly hourly change in the value of the naira in an atmosphere of wage stagnation? 

How can it be that a well-known business like Sahad Stores, which is open to customers almost 24 hours a day, including weekends, can be hoarding goods that it opens its doors to sell every day? 

I do not encourage or support hoarding and profiteering, but people make investments to make gains and not losses. Businesses, whether large, medium or micro are responding to economic stimuli – government’s macro and fiscal policies, wage stagnation, insecurity and simple calculations around replacement costs of goods. 

The appropriate response, in my view, is determined efforts by the government to govern well, and be seen to do so by:

Urgently improving the safety of lives and property to restore social and economic trust for citizens to go about their lawful businesses without fear. If farmers enjoy security, we will produce more food.

Align monetary and fiscal policies. While the CBN has been aggressive in restoring macro stability, not much has been heard from the Ministry of Finance, which also serves as the coordinating Ministry for the overall economy. 

The effort of the government to improve the food supply will continue to be constrained by the pervasive insecurity across the country.

Recognise that these are not normal times, as such deliberately reduce the cost of governance, and eliminate leakages and corruption.

Go beyond lip service on the matter of diversification of the economy; actively identify business opportunities, ready implementation and provide every needed support for them to take off; create jobs and earn foreign exchange for the country. 

Breaking into warehouses which have been legitimately used by business owners to store their products through the years is ill-advised and ultimately counterproductive. It may become an unwitting signal for miscreants to raid stores and businesses under the pretext that the government claims that items are being hoarded. 

Who will want to continue to invest if the government which should ensure the security of the businesses is the one endangering them through populist rhetorics? 

So, you destroy people’s investments and empty the warehouses and the stores, then the simple question that I have for the government is: after now, then what? 

As a country, Nigeria can survive this extremely challenging time. The administration must however jettison all pretensions to partisanship and reach out to friends and foes alike, who have the capacity, experience and track record to support the administration at this time. Individuals such as Akin Adesina, Benedict Orama, Ngozi Okonjo, Oby Ezekwesili, Atedo Peterside, Sanusi Lamido, Bayo Ogunlesi, Ayo Teriba, Biodun Adedipe, Osita Ogbu, Ade Ojowu, Jonathan Aremu should be engaged under the auspices of a reconstituted Presidential Economic Advisory Council.

Most importantly, the government must act in good faith to implement the policy options and economic solutions proposed by this council.

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