A two-day protest kicked off in Nigeria’s commercial hub of Lagos on Tuesday (Feb. 27) morning shortly before other locations nationwide followed.
One of the country’s main unions, the Nigeria Labour Congress (NLC), has called workers to demonstrate outrage on the mounting hardship and insecurity.
The watchword was “endhardshipnow”.
This crisis is characterized by skyrocketing inflation and detrimental monetary policies that have significantly devalued the national currency against the dollar.
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The NLC’s outcry includes demands for the government to distribute food equitably across the nation and to eschew policies endorsed by the World Bank and IMF, which are perceived to exacerbate the populace’s suffering.
In response to the crisis, the Finance Minister announced the resumption of direct cash transfers to support over 12 million vulnerable households. The situation is particularly acute in northern Nigeria, where conflict has disrupted agricultural activities, forcing communities to abandon farming and flee violence.
President Bola Tinubu’s administration, according to Wale Edun, speaking to the BBC, is attentive and proactive in addressing the needs of Nigerians. However, the root causes of the economic downturn are complex.
Nigeria’s largest economy in Africa is primarily service-driven, with significant contributions from the IT and banking sectors, manufacturing and processing industries, and agriculture. Yet, the economy’s inability to meet the needs of its approximately 210 million citizens, who rely heavily on imports, makes it vulnerable to external shocks.
The economy’s heavy reliance on crude oil for foreign exchange earnings has been a double-edged sword. The 2014 plunge in crude prices led to attempts to stabilize the naira using the nation’s limited foreign reserves and implementing multiple exchange rates.
Efforts to boost local production by closing land borders and restricting dollar access for importers had adverse effects, including a thriving parallel market for the dollar. They decreased foreign exchange earnings due to oil theft and pipeline vandalism.
Upon assuming office in May last year, President Tinubu initiated reforms to revitalize the economy, including ending gas subsidies and unifying exchange rates to allow market forces to determine the naira’s value. However, these reforms led to significant economic shocks, notably a more than 200% increase in gas prices, affecting nearly every aspect of daily life in Nigeria.
The naira’s devaluation is attributed to the Central Bank of Nigeria’s previous policies, which limited dollar access, forcing many to resort to the black market. A unified exchange rate was supposed to facilitate dollar access and stabilize the naira. Still, the influx of foreign investment and crude oil sales needs to meet expectations, leading to a further depreciation of the naira.
In response to the crisis, CBN Governor Olayemi Cardoso announced efforts to clear a significant portion of the foreign exchange backlog, with plans to address the remaining balance. President Tinubu has also directed the release of government food reserves and proposed the establishment of a commodity board to regulate soaring prices.
Additionally, measures are being taken to combat the hoarding and unfair pricing of food items, with local media reporting actions against stores engaged in such practices.
