The recent report that many Nigerians, including civil servants, unemployed graduates and some university teachers are doing menial jobs to survive has portrayed the pitiable state of the nation’s economy. To make ends meet, some of them have reportedly devised strategies to eke a living. This underscores the state of affairs in the country and the failure of government to address the economic challenges facing millions of Nigerians.
During the eight-month strike embarked upon by members of the Academic Staff Union of Universities (ASUU), some lecturers engaged in farming while others offered consultancy services to friends and organisations. Many civil servants could hardly meet their basic needs, such as food, shelter, medicals and house rents. Some of them became commercial tricycle and motorcycle operators. The situation can make some unemployed youths take to criminality as they become willing recruits for terrorism and political thuggery.
A few months ago, a report by Utility Bidder revealed that Nigerians spent so much on key utilities. The report showed that an average household in Nigeria spent over two-thirds or 67.7 per cent of monthly income on utilities. The items included water and cooking gas, internet data, electricity bill and others. The National Bureau of Statistics (NBS) had corroborated the survey.
Out of 51 countries covered by the report, Nigeria ranked second, followed by Pakistan and Philippines in first and third positions with 62.9 per cent and 61.5 per cent, respectively on monthly expenditure on utilities. The survey also showed that Nigerians paid one of the highest prices for internet access.
The report represents an objective account of the current harrowing experiences many Nigerians go through. With a national minimum wage of N30,000 per month, the harsh economic situation has taken a great toll on many Nigerians. With current inflation rate at 21.09 per cent, the prices of basic household items have soared, with workers’ disposable income in sharp decline.
That is why the government should initiate policies that will improve the disposal income of Nigerians and reduce the cost of key utilities. It has become clear that the current minimum wage is grossly inadequate to meet the basic needs of many Nigerians.
Last year, the National Bureau of Statistics (NBS) had in its report on Expenditure and Income Gross Domestic Product(GDP) revealed that Nigerians spent over N54trillion on household consumption in nominal terms in the first half (H1) of 2021. The figure was higher than N48.22trillion recorded in the first half of 2020. It stood at N49trillion and N44trillion in the first half of 2019 and 2018, respectively. Household expenditure is the amount of final consumption expenditure made by households to meet their daily needs, such as food, clothing, house rent, energy and others. The expenditure for households consumption increased by 8.90 per cent in the first quarter (Q1) and 19.08 per cent in Q2 of 2021. This means that Nigerians are spending more on utilities. This has reduced the disposal income available for savings and investment. The rise in household spending shows that Nigerians are spending more as a result of the increase in prices of goods and services.
For example, the cost of 12.5kg cooking gas, which sold at N6,800 in November 2021, now costs between N9,500 and N10,000. It is likely to cost more by the year end if government fails to intervene. Also, prices of major food items, such as rice, beans, egg and bread, have increased. A bag of 50kg rice, which sold at N30, 000 a year ago, is now between N45,000 and N50,000.
In the last six months, prices of essential food items had gone up by between 50 per cent and 100 per cent. For example, a bag of sachet water has gone up to N200 from N150. Electricity tariff has been increased by over 50 per cent a kilo watt.
Across the states, the Consumer Price Index (CPI) shows that food inflation has increased beyond the reach of many Nigerians. Latest NBS report shows that most Nigerians are groaning under high cost of food items. Insecurity across the country has worsened household consumption spending. According to the misery index, Nigeria may be the largest economy in African, but an average Nigerian is more miserable than his peers in other African countries.
Nigeria’s misery index is 50.6 per cent higher than nine other economies in Africa. For South Africa, it is 35.7 per cent, Angola 32.7 per cent, Ghana 14.8 per cent, and Kenya 13 per cent. With higher unemployment rate, accompanied by high inflation, citizens are bound to be miserable.
The International Monetary Fund (IMF) says that Nigeria has one of the lowest savings rates globally. In 2019, the gross savings rate in Nigeria stood at 13.9 per cent. This is far below China at 45 per cent, and much more below South Africa (15.8 per cent), Tanzania (24.8 per cent) and Togo (21.2 per cent). Nigeria is currently far short of the four components of GDP, which are household consumption, private investment, government spending and net exports. For the economy to grow, Nigeria must improve on them.