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Tag: cost of living

  • Addressing Nigeria’s cost of living crisis: A strategic, sustainable approach

    Addressing Nigeria’s cost of living crisis: A strategic, sustainable approach

    • By Dr Alim Abubakre

    The rising cost of living presents a formidable challenge for the people of Nigeria. However, this challenge is not unique to Nigeria. Globally, many countries are grappling with inflationary pressures due to a combination of geopolitics and the fiscal fallout from the COVID-19 pandemic. The conflict between Russia and Ukraine has disrupted food and energy supplies, while tensions in the Middle East exacerbate global oil price volatility. Countries such as the United Kingdom have experienced sharp inflationary spikes, Sri Lanka faced severe food shortages, and Argentina continues to endure hyperinflation. As Nigeria embarks on economic reforms—including the reduction of subsidy payment and the flotation of the Naira—these challenges must be mitigated through innovative strategies across the short, medium, and long term.

    This strategic roadmap offers actionable solutions for Nigeria, focusing on alleviating immediate pressures while building sustainable growth frameworks for the future. Every intervention must not only be informed by global lessons but must also be adapted to Nigeria’s context. The moment is ripe for impactful, transformative change, enabling Nigeria to emerge stronger, charting a path toward an inclusive, sustainable future for its citizens. Alongside these strategies, funding mechanisms will ensure these interventions are practical and impactful.

    •Empowering leadership through strategic capacity development

    A pivotal element in addressing the cost-of-living crisis is enhancing the strategic capacity of Nigeria’s leaders. Investing in leadership development programs empowers policymakers to adopt holistic and strategic solutions. For instance, countries like Singapore have implemented rigorous leadership training, resulting in visionary policies that drive economic success. In Nigeria, seeking uncommon strategic insights focused on leadership excellence can equip leaders with the skills to navigate complex economic landscapes, fostering innovative approaches to inflation, unemployment, and poverty.

    •Cultivating the right mindset for sustainable economic growth

    Equally important is fostering a progressive mindset among leaders that prioritises sustainable economic growth. This involves embracing transparency, accountability, and a commitment to long-term development over short-term gains. Rwanda’s remarkable transformation, driven by leadership that values sustainability and inclusiveness, serves as a compelling example. Nigerian leaders can adopt similar principles, promoting policies that encourage investment, diversify the economy, and enhance the quality of life for all citizens.

    •Short-term strategies: Immediate relief for citizens

    In the short term, providing quick relief to vulnerable citizens is essential to cushion the impact of higher living costs. One of the most effective ways to achieve this is through direct cash transfers. India demonstrated the efficacy of this approach during the  COVID-19 pandemic by disbursing payments to over 200 million women under the Pradhan Mantri Jan Dhan Yojana scheme. A similar initiative in Nigeria, targeted at the poorest households, would offer immediate relief and help prevent households from slipping into deeper poverty.

    Additionally, temporary tax reductions on essential goods can lower retail prices and ease the burden on consumers. For instance, Kenya temporarily reduced VAT from 16% to 14% during the pandemic to help citizens cope with rising costs. Nigeria could adopt a similar approach by reducing import duties on staple foods and essential products. (There is already in place an ineffective zero duty on food. Government should check her own policies for effectiveness and self-correct.)

    Another immediate intervention is providing subsidies for public transportation. With transport costs constituting a significant portion of household expenses, subsidies can ease commuting costs. Germany exemplified this with its €9 monthly public transport ticket, a move that was widely appreciated for making travel more affordable. Proper implementation and funding of the conversion and adoption of Compressed Natural Gas (CNG) for public transport could also be explored with vigour. The government should make the kits for conversion cheaper by working directly with manufacturers or, better still, encouraging them to start producing locally.

    Read Also: Nigerians groan as new PMS pump price raises cost of living

    To prevent market distortions, the government—especially at the state level—must monitor prices and curtail hoarding. India’s proactive market surveillance, particularly on essential commodities like onions and pulses, has shown that monitoring systems can stabilize prices and prevent panic buying. Nigeria should implement similar anti-hoarding policies, supported by sanctions for violators.

    The government can also release more strategic reserves of food and fuel to counteract supply disruptions and stabilize prices. The United States’ decision to release oil from its Strategic Petroleum Reserve in 2022 eased global fuel prices, a model Nigeria could replicate with its grain and petroleum reserves.

    Furthermore, introducing price caps on essential medicines and healthcare services will ensure affordability in the short term. South Africa’s Single Exit Price policy for medicines provides an example of how government intervention can keep healthcare accessible for citizens.

    Finally, community feeding programs can offer immediate relief to vulnerable populations. Brazil’s Zero Hunger Program successfully used community kitchens to provide meals to those in need. Nigeria could expand its school feeding programs and establish community kitchens to support the most affected populations. -This should be negotiated into Corporate Social Responsibility mandates for corporations. The government should minimise direct involvement in such activities to reduce the risk of corruption.

    •Medium-term strategies: building resilience through strategic investments

    Medium-term strategies are crucial to foster economic resilience and prevent future crises. One priority is to boost local production through agricultural support. Ethiopia’s Agricultural Transformation Agency exemplifies how targeted interventions—such as improved seed distribution and farming techniques—can increase food production and reduce dependency on imports. Nigeria can leverage its agricultural potential by providing farmers with access to better inputs and technical training.

    Encouraging small and medium enterprises (SMEs) through financial incentives and business development support will stimulate job creation and income growth. Malaysia’s SME Masterplan successfully facilitated economic growth and employment by providing capital and training to entrepreneurs. Nigeria should prioritize similar initiatives, focusing on sectors with high growth potential.

    Investment in public transportation infrastructure can alleviate commuting costs while addressing urban congestion. Colombia’s TransMilenio system in Bogotá improved mobility for millions of citizens and reduced their transport expenses. Expanding Nigeria’s public transportation network, especially in urban centers, will similarly lower commuting costs. Encouraging all subnational governments to build suitable mass transit networks—whether rail, buses, or trams—powered by CNG, renewable electricity, or diesel, is essential.

    Supporting renewable energy adoption is another essential medium-term strategy. Morocco’s investment in solar energy through the Noor Ouarzazate Solar Complex created jobs and lowered energy costs. Nigeria can incentivize renewable energy solutions—such as solar panels in rural areas—to reduce reliance on expensive fossil fuels. Indeed, Nigeria has massive potential for solar energy nationwide and wind energy in the North-West and North-East is crucial. Sub-national governments should start building medium to large solar and wind farms for power generation. New legislation allows every state to generate and sell power.

    Food price stabilisation funds can provide a buffer during periods of price volatility. Indonesia’s State Logistics Agency (Bulog) stabilizes rice prices by managing reserves and offering subsidies. Nigeria could establish a similar fund for key staples to cushion against market fluctuations.

    To address housing costs, developing affordable housing programmes is vital. Singapore’s Housing and Development Board provides affordable homes for over 80% of its population. Nigeria could partner with private developers to build affordable housing units and offer mortgage subsidies to middle- and low-income families.

    Finally, strengthening social safety nets through expanded welfare programs, such as unemployment benefits and health insurance, will protect vulnerable citizens from economic shocks. Chile’s Solidarity and Social Investment Fund offers a model of comprehensive social support that Nigeria can emulate to enhance the well-being of its population.

    •Long-Term strategies: building a sustainable, inclusive economy

    For long-term stability, Nigeria must focus on diversifying the economy. The UAE’s success in reducing its reliance on oil by investing in tourism, aviation, and finance offers a blueprint for Nigeria. Developing sectors such as technology, manufacturing, security and agriculture will reduce economic vulnerability and provide sustainable employment opportunities.

    Investing in education and skill development is essential for creating a skilled workforce capable of thriving in a modern economy. South Korea’s emphasis on education and skills training propelled its economic growth and technological leadership. Nigeria should prioritize educational reform, focusing on vocational training and digital skills to prepare its youth for the future.

    Promoting industrialization will further enhance domestic production and reduce dependency on imports. China’s focus on manufacturing has transformed it into the “world’s factory,” creating millions of jobs and making goods more affordable. Nigeria can adopt a similar approach by fostering manufacturing hubs and offering incentives to investors.

    Advancing agricultural technology is another long-term strategy that will increase productivity and food security. The Netherlands’ leadership in agricultural innovation enabled it to become the world’s second-largest exporter of agricultural products. Nigeria should invest in research and technology to enhance farming practices and boost yields.

    Expanding renewable energy infrastructure is critical for reducing energy costs and environmental impact. Denmark’s investment in wind energy, which now supplies nearly half of the country’s electricity, is a testament to the potential of renewable energy. Nigeria can pursue large-scale renewable projects to diversify its energy sources.

    Building comprehensive social welfare systems will ensure that citizens are protected from future economic downturns. Sweden’s extensive welfare programs have contributed to low poverty rates and a high standard of living. Nigeria should develop robust systems of healthcare, education, and unemployment insurance to support its citizens.

    Strengthening economic governance and anti-corruption measures is essential to attract foreign investment and ensure efficient resource allocation. Botswana’s anti-corruption efforts have resulted in sustained economic growth and investor confidence. Nigeria must prioritize governance reforms to build a transparent and efficient economy.

    •Funding the solutions: realistic, implementable approaches

    Funding these initiatives requires innovative strategies. Nigeria can explore public-private partnerships (PPPs) to fund infrastructure projects, replicating the success of India’s PPP model for highways. Tax reform—including better collection of existing taxes—can improve government revenues, as seen in Rwanda’s efforts to digitise tax collection. The Federal Government’s tax reform committee’s recommendations should be thoroughly reviewed and implemented accordingly.

    Nigeria could also issue more diaspora bonds to leverage contributions from Nigerians abroad, following Ethiopia’s successful use of such bonds to fund infrastructure projects. Debt restructuring and relief negotiations with international creditors, similar to Argentina’s approach, will free up funds for domestic priorities. More funding initiatives like Sukuk bonds for road construction, successfully utilized by the previous Ministry of Works, should be explored.

    The government can increase revenue through state asset privatization, as seen in Saudi Arabia’s partial privatization of Saudi Aramco. Carbon credits and environmental levies offer another source of revenue, with countries like Canada generating income from carbon taxes. However, we must assess whether we have viable assets left to sell off, aside from the refineries and federal government owned real estate.

    Furthermore, Nigeria should strengthen foreign direct investment (FDI) frameworks, following Singapore’s model of attracting investors through incentives and policy stability. Remittance facilitation can also enhance foreign exchange reserves, as the Philippines has done by encouraging overseas workers to remit funds.

    •Conclusion: A sustainable future for Nigeria

    While the reduction of the payment of subsidies and the flotation of the Naira have presented challenges, they also offer an opportunity for Nigeria to embark on meaningful economic reforms. By empowering leaders through strategic capacity development and cultivating the right mindset toward sustainable growth, Nigeria can effectively implement these short, medium, and long-term strategies. Examples from around the world highlight the transformative impact of visionary leadership and strategic planning.

    By adopting these strategies, Nigeria can reduce the cost of living, create more employment, improve national security, build a resilient economy, and improve the well-being of its citizens. Strategic funding mechanisms will ensure these initiatives are realistic and sustainable. With political will, effective implementation, and empowered leadership, Nigeria can emerge stronger, charting a path toward inclusive and sustainable growth.

    •Abubakre is founder of TEXEM and Senior Lecturer at Sheffield Business School and Advisory Board Member of the London Business School Africa Society

  • On the escalating cost of living

    On the escalating cost of living

    • By John Amabolou Elekun

    Sir: In recent years, the cost of living in Nigeria has spiralled out of control, pushing millions of citizens into a state of economic despair. This crisis has not only exposed the deep-seated structural problems within the nation’s economy but also the failures of leadership at all levels—federal, state, and local.

    As the prices of basic goods and services skyrocket, the average Nigerian is left grappling with the harsh realities of survival in a country where government officials seem more focused on personal gain than public welfare.

    Nigeria, Africa’s most populous nation, has seen a dramatic increase in the cost of living. Inflation, currently at double-digit rates, has driven up the prices of essential items such as food, fuel, and housing. Staple foods like rice, beans, and yams have become luxuries for many families. Transportation costs have also surged, driven by frequent hikes in fuel prices, which ripple through every aspect of daily life.

    For many Nigerians, the struggle to make ends meet is becoming increasingly untenable. The minimum wage, set at #70,000 per month (approximately $42), has not been adjusted to reflect the rising inflation, leaving millions of workers underpaid and overburdened. In urban areas like Lagos and Abuja, the cost of rent alone can consume nearly all of a low-income worker’s salary, leaving little to nothing for other necessities.

    The blame for this dire situation lies squarely on the shoulders of Nigeria’s leaders. At the federal level, poor economic policies, corruption, and a lack of foresight have exacerbated the crisis. The removal of fuel subsidies, for instance, was implemented without adequate measures to cushion the impact on the poor and middle class. Meanwhile, state and local governments have largely failed to implement policies that could alleviate the suffering of their constituents.

    Instead of addressing these issues head-on, many government officials seem more interested in enriching themselves at the expense of the people. The budget allocations meant for public services often end up in private pockets, while transparency and accountability remain elusive. Public funds are mismanaged, and corruption is rampant, leading to a grossly inadequate provision of essential services such as healthcare, education, and infrastructure.

    Read Also: First Dangote PMS delivery set for September

    It is high time that Nigerian leaders are held accountable for their actions. The government’s primary responsibility is to serve the people, ensuring their welfare and providing an environment where every citizen can thrive. Unfortunately, the current reality suggests a leadership that is disconnected from the plight of the average Nigerian.

    Civil society organizations, the media, and the public must continue to demand transparency and accountability from those in power. There is a need for a comprehensive audit of public spending, particularly in areas that directly affect the cost of living. Furthermore, the government must prioritize policies that will reduce inflation, create jobs, and improve access to affordable goods and services.

    The escalating cost of living in Nigeria is a ticking time bomb that requires urgent attention. The government, at all levels, must rise to the occasion and implement policies that will address the root causes of this crisis. This includes tackling corruption, improving economic management, and ensuring that public resources are used for the benefit of all Nigerians.

    If the current trend continues, the social and economic fabric of the nation will be further strained, leading to increased poverty, social unrest, and a decline in the overall quality of life. The time for change is now, and it must start with the leaders who have sworn to serve the people. Nigerians deserve better, and it is the government’s duty to deliver.

    •John Amabolou Elekun,

     Iju-Ajuwon, Lagos.

  • Top 10 cities with most expensive cost of living by June 2024

    Top 10 cities with most expensive cost of living by June 2024

    The cost of living varies widely among cities around the world, influenced by factors like transportation, housing, food, and entertainment.

    Each city has distinct possibilities and lifestyles, but financial ramifications must be carefully considered.

    Prospective residents must weigh these benefits against the high expenses associated with living in some of the world’s most costly urban centres.

    According to Numbeo, the Cost of Living Index compares consumer goods prices (excluding rent) relative to New York City, which has a baseline index of 100%.

    For example, a city with a Cost of Living Index of 120 is approximately 20% more expensive than New York City for groceries, restaurants, transportation, and utilities, excluding housing costs.

    Here are the world’s top 10 cities with the highest cost of living by mid-year 2024:

    1. Geneva, Switzerland – Cost of Living Index: 101.7

    Geneva tops the list with its high cost of living, driven by expensive housing, dining, and general goods and services. The city is known for its quality of life but comes with a price tag.

    2. Zurich, Switzerland – Cost of Living Index: 100.4

    Zurich closely follows Geneva, sharing similar cost factors such as high rents and premium living expenses. The city’s strong economy contributes to its high living costs.

    3. New York, NY, United States – Cost of Living Index: 100.0

    New York City remains one of the most expensive cities globally, primarily due to steep housing costs and high consumer prices across various categories.

    Read Also: Food Insecurity and the cost of living crisis

    4. San Francisco, CA, United States – Cost of Living Index: 90.5

    San Francisco’s vibrant tech industry has driven up living costs, particularly housing and dining, making it a costly city to reside in.

    5. Boston, MA, United States – Cost of Living Index: 85.8

    Boston’s historical significance and academic prominence contribute to its high cost of living, especially notable in housing and healthcare.

    6. Reykjavik, Iceland – Cost of Living Index: 83.9

    Iceland’s capital city, Reykjavik, features prominently due to its isolated location and reliance on imported goods, which escalates living expenses.

    7. Washington, DC, United States – Cost of Living Index: 82.5

    Washington, DC, ranks high due to its role as the political centre of the United States, resulting in inflated housing and service costs.

    8. Seattle, WA, United States – Cost of Living Index: 81.5

    Seattle’s booming tech industry and scenic location contribute to its high living costs, especially in housing and leisure activities.

    9. Los Angeles, CA, United States – Cost of Living Index: 80.9

    Los Angeles combines high housing costs with expensive consumer goods and services, driven by its role as a global entertainment hub.

    10. Chicago, IL, United States – Cost of Living Index: 80.2

    Chicago rounds out the top 10 with its significant urban amenities and cultural offerings, alongside notable expenses in housing and healthcare.

  • States, rise up to cost of living crisis

    States, rise up to cost of living crisis

    THE NEED FOR URGENT ACTION

    The cost of living crisis in Nigeria is getting worse with brutal consequences for citizens, and this requires urgent action by the State Governments. Three weeks ago (on February 16), I wrote on the same topic with a focus on the Federal Government. In today’s edition, I have some notes for the State Governors where they are dealing firsthand with citizens’ reactions to this terrible situation.

     Nigerians are expecting accelerated interventions at the subnational level. I commend the efforts of some Governors who have already taken proactive steps to mitigate the impact of the removal of fuel subsidies on their populace. The notion that the President is the only one responsible for the welfare and well-being of the citizens of Nigeria is not correct. The Governors are also key to the delivery of good governance as is evident in your various activities and interventions. But there is a need for more action and performance, with consequent positive impacts and more visibility. It is also worth noting that the political consciousness of Nigerians has been at its highest since independence, and therefore the citizens are watching and will be sensitive to developments (positive or negative)

     The Federal Government cannot do it alone, state governors must think out of the box, because all the states in Nigeria are so blessed with man and material resources such that no state has any business being poor. Socio-economic recovery and sustainability can only be achieved with value creation and value innovation.

    FOOD SECURITY

    One of the key interventions that Mr. President provided was the release of over 24,000 tonnes of grains. But it is important for us to note the rule of subtraction without addition – it means we are depleting or we have already depleted our strategic reserves. The global warming indicators have shown that food production this year will be less and then there is the big elephant in the room, i.e. insecurity that has kept farmers away from the farms for a long time. Therefore, there is anticipated global food insecurity. So, I expect that within the whole intervention framework, we will have plans to replenish the strategic grain reserves as quickly as possible, because the strategic grain reserves are the last lines of defense and must be available at all times. Otherwise in the next 5 to 6 months during the rainy seasons, naturally there are food shortages during the rainy seasons even without the issues of insecurity, global warming, and the depleted strategic grain reserves. It means that there is a potential disaster by quarter 4 of this year if a concerted well-thought-out strategy is in place immediately to proactively manage the impending danger.

     There is a connection between food insecurity and health, education, and poverty. Because the agriculture value chain produces not just food, but raw materials for industries, raw materials for medicine, and healthcare. Food insecurity will also increase the rate of malnutrition in some parts of Nigeria, especially the northern region where we have the highest number of multi-dimensionally poor Nigerians constituting about 70%. In addition, because of malnutrition and increased infant mortality, there is already a prevalence of hunger and poverty. People are dying due to hunger, and people have started resorting to desperate measures resulting in social unrest and an increase in crime.

      The critical success factor to turn around the socio-economic malaise in Nigeria is first and foremost tackling insecurity. Otherwise, any other initiative will be a “flash in the pan”. This is because the recent escalation of insecurity around the northwest, north-central, and even southeast is hampering food production, otherwise, we are taking two steps forward and three steps backward. This has significantly impacted food security. The northern part of Nigeria is the food basket of the nation and is arguably some part of the West African sub-region. Farmers have gone to the farm late this year. Climate change is impacting, and the danger of food insecurity is looming. There is a need for quick actions

     CRITICAL SUCCESS FACTORS

    •       We should not lose sight of the significance of national security as a critical success factor in achieving food security. For instance, the fertilizers that will be shared will be worthy of note that the fertilizers will be useless if the farmers cannot go to the farms to produce due to insecurity. Farmers need to return to their farms as soon as possible to produce more food and raw materials for the economy to mitigate the looming food shortage with dire consequences.

    •      Value innovation through Public-Private Sector (PPP) initiatives. In this case, I dare say the “real, people-oriented and impactful PPP” models (and not white elephant projects) if used viably and efficiently as strategic tools, will change the dwindling fortunes of the States, especially in terms if critical infrastructure like roads, bridges, agriculture, solid minerals exploration and management, health care systems, etc.

    •      Another critical success factor is in the area of Youth Empowerment. I urge you to continuously harness the skills of Youths and channel them to productivity and development, from technical skills acquisition, talent hunting, value, and job creation, entrepreneurship, and importantly education in all its ramifications, value re-orientation, and leadership by example. To enable them to earn sustainable good lives and livelihoods.

    •In addition, at the National Executive Council level, to see some new strategic synergies of creativity to engender productive states and national economies in the short to long term.

    •Inter-state collaboration and partnerships regardless of party affiliations are very important going forward. I expect to see more of such collaborations by individual states and also by leveraging platforms like the Nigerian Governors Forum, for governors to look beyond party lines and to look at the constitutional mandate of governorship and align the provisions with the visions and aspirations of Governors. Such partnerships could result in an increase in the income of your respective states, create more jobs, and better the welfare and well-being of your people.

    •Entrenchment of the culture of excellence and prudence in the public sector by providing quintessential leadership, i.e. starting the reforms from the top and setting examples with zero tolerance for indolence, mediocrity, nepotism, and sycophancy.

    •Transparency and Accountability in public service, resource allocation, and utilization

    •Anticorruption Strategy and Value-Reorientation: Beyond the mantra to action through realistic, practical, and pragmatic plans and actions with the requisite strategy, management, and execution.

    •Local Government Autonomy: While this topic remains a thorny issue in line with the principle of devolution of powers, I will still urge your excellencies to ensure the entrenchment of the autonomy of the Local Government Administrations as a critical success factor for governance at the State level. This will remove a pile of blame from Governors for the non-performance of some Local Government Chairmen and their Councilors.

    Read Also:High cost of living: Be patient with Tinubu, Oyetola tells Nigerians

     YOUTH EMPOWERMENT IN AGRICULTURE

    The youths of any society or nation are key to the development and substance of that nation.  A very worrisome situation in Nigeria is the lack of deepening commitments and impacts with regard to the support for Nigerian youths to seriously take Agriculture as a profession or business. Part of the issue is that Agriculture has been nationally unattractive and more of a campaign tool than a national and state economic development tool. Over time, successive administrations have not sustained agriculture initiatives and interventions that would have made agriculture the “go-to” industry, for people to be encouraged to join farming.

     ROLE OF STATES AND LOCAL GOVERNMENTS

    The importance of the roles of the States and Local Governments to improve our Agricultural value chain and its socio-economic contributions cannot be over-emphasized. Apart from the national agriculture sectoral reform strategy, which I suggested in last week’s episode of this Column, that we should have at the Federal level, the State Governors, the National Assembly, and state assemblies need to do more in crafting their various Agriculture reform strategies that will key into the overarching national development plan while taking into cognizance their peculiarities with a view to harnessing all their agricultural resources in the states for better socio-economic impacts -short to long term.

     In conclusion, your excellencies, I know that governance at this critical time in the history of Nigeria is not easy, and I commend you for taking the bold and tough decision to serve as governor in the Federal Republic of Nigeria. I am also sure that you prepared for this moment knowing the challenges that you will face, and more importantly, your people elected you with a lot of expectations. Therefore, to whom much is given, much is expected.  I leave you with this quote. I wish you all, Mr. Present and all Nigerians, God’s Guidance and Grace. May Almighty God Continue to Bless the Federal Republic of Nigeria.

  • Cost of living, price control and other matters

    Cost of living, price control and other matters

    “If people cannot trust their Government to do the job for which it exists – to protect them and promote their welfare – all else is lost”- Barrack Obama, the 44th President of the United States of America.

    THE NEED FOR URGENT ACTION

    The cost of living crisis in Nigeria is rising to epic proportions which if not addressed decisively will plunge this country into a worse national dilemma.

     I applaud the increase in the level of seriousness with which President Bola Ahmed Tinubu is trying to tackle the issue with the convening of a meeting yesterday, with Governors and other critical stakeholders in Government yesterday to look into the issue, the setup of the presidential committee to review the minimum wage, the intervention of releasing over 24,000 tonnes of grains, etc. This is a follow-up to the declaration of emergency on food insecurity last year and also the action points with the NLC/TUC about 6 months ago, etc.

     While the above initiatives are laudable and reflect the readiness of the administration of President Tinubu to mitigate the impact of the subsidy removal and other economic downturns, it is important that decision-makers, leaders at various strata, and critical stakeholders note that urgent execution of the action points hitherto agreed to and committed to with follow-up milestones communication and corrective actions taken if and when necessary are essential to successfully managing this very worrisome situation which is actually a global malaise, albeit worsened in Nigeria by the bad choices and actions/inactions of previous administrations at Federal and State levels.

    MINIMUM WAGE SHOULD TAKE WORKERS HOME

    The current cost of living crisis in Nigeria is not a function of food scarcity, but a function of purchasing power due to the eroding value of the Naira and the non-increment of the wages and salaries of workers in Nigeria for over 14 years. This is more so despite the fact that the 2018/2019 increase of minimum wage to N30,000 is yet to be applied by about 20 States in Nigeria – and that’s the bottom line.

     Importantly, I hope and pray that the outcome of the work by the Minimum Wage Review Committee set up by President Tinubu with the Chairman Vice President Kashim Shettima as the Chairman will improve the welfare and livelihood of the Nigerian workers so that they get succor because the rising cost of living is a very big issue, Nigerians are really struggling.

     CONTAINING THE RISING COST OF LIVING VERSUS PRICE CONTROL

    The issues of price control can be traced to the fundamental issues of the erosion of our value systems in Nigeria. The fact that unscrupulous traders and businesses are looking for the slightest opportunity to over-price their goods and services due to the sheer wickedness of desire to profit on the suffering of their fellow citizens and yet they blame only the government for our woes is pathetic, to say the least. Therefore, I agree that we should have a mechanism that will be controlling those excesses or extortion.

    Read Also: How Wigwe’s aide escaped death

    However, if we continue chasing those wicked traders and businessmen/women without dealing with the foundational issues, we will perpetually continue to face these recurring issues.  Nigeria has a galloping inflation that is currently hovering close to 30% with no indication that it will slow down in the short to midterm, with the debt profile and issue of cost of borrowing, etc. We may be facing the vagaries of inflation and the consequent brutal economic impacts for the next 6 months or even more.

     Therefore, there is an urgent need to deal with the factors that drive inflation i.e. cost of production, availability of the products (e.g. food, or other goods and services), cost of logistics, cost of storage, availability and cost of power (electricity), insecurity, etc. In the case of food security and availability for example, currently, some farmers cannot go to their farms due to kidnappings, banditry, and other forms of terrorism. And for those farmers that go to the farms they end up most likely paying three or four types of taxes/levies, i.e. Local Government levies, State Government levies, Federal Government levies, and the levies they pay to terrorists/ bandits or kidnappers. We cannot expect those farmers/up-takers to sell the products at a “reasonable” price” without considering their cost of production. In terms of production, power is not available, people have to resort to self—help to generate power at a cost that is rising (e.g. Diesel) to be able to produce goods or provide services. The government needs to be practical and sincere and address the key drivers of production in the economy so that we can turn around the rising cost of living. But I agree that there should be a measure of containment and control of over-pricing which can only be feasible if we deal with the aforementioned issues. For example, tackling insecurity at national and state levels so that farmers can go back to the farms this year’s farming season should be the first step and will be a critical success factor.

     With regards to a proposal to establish a Price control Board, My opinion is that we should get our priorities right as a Country, and the National Assembly should rather focus on key priorities that will immediately result in the following: reduction in the cost of production of goods and services which will ensure supply to address rising demand, tackle insecurity, provide interventions that will support protect our farmers and traders to produce enough food and raw materials, availability of power, reduce cost of doing business, etc. Those should be the focus of the National and State legislature as a matter of national priority and not the creation of an agency of government that will be of no value or consequence in the short to long term.

     The truth is that endemic corruption in our Country is another causative factor of the rising cost of living. I dare say that we currently have enough laws and regulations in Nigeria. But the execution of the laws in terms of enforcement of laws and regulations, surveillance, monitoring, and evaluation, ensuring compliance with regulations and extant laws, taking proactive steps to prevent a breach of laws and regulations, and the lack of consequences of breaking the laws and regulations are the issues. We have solid organizations like the Standard Organizations of Nigeria (SON), NAFDAC, Nigeria Customs and Excise, Consumer Protection Board, etc. organizations that have full legal backing to ensure the delivery of quality goods and services and protection of consumers also in terms of overpricing, etc. What I will expect is that the Executive, Legislative, and Judiciary arms of Governments at the Federal and State levels ensure that organizations are living up to the expectations of their existence in line with the laws setting them up. 

      Accordingly, I strongly recommend that the government, at all arms and tiers, focus on the correct priorities with decisive actions in terms of good governance, and doing the right things. Otherwise, the Price Control Board will become another additional cost of governance with no value on an already over-bloated civil service that most Nigerians are calling for to cut down on the cost of governance. Because there will be a huge cost required to undertake the legislation that will create the Price Control Board, then the cost of activating the Board, appointing Board of Directors, Chief Executive Officer, other executives and staff, creating of offices, etc. which will ultimately be becoming another huge recurrent cost in our annual Federal and State budget. Additionally, the Board may become a political vehicle or a vehicle for corruption whereby there will be collusion to defeat the objective of setting up the Board in the first place. The key to solving this issue of price increase is to open up the value chains and supply chains, break barriers of trade, and ensure the ease of doing business which will in turn, ensure competition and enough supply to surpass demand which will ultimately naturized hoarding and speculation which are the key levers of price increase.

     IMPACTS AND VALUE CREATION AT STATE LEVELS

    More than any other arm or tier of government, the state government has a more direct and tangential role to play in alleviating the lives of their people. Going forward there will be more attention from the people on the state Governors and demand for good governance accountability and performance as will be seen in the coming months because citizens are becoming more aware of their rights and expectations of leaders at all arms and tiers of government. The coming months will be key indicators. 

     Citizens should demand more transparency and good governance at subnational levels to catalyze better service by their respective governors and legislators. We pay too much attention to the Federal Government, such that we forget the immense responsibility placed on the Governors to deliver good governance.

  • Solutions to the high cost of living

    Solutions to the high cost of living

    By Maryam Kamilu

    Sir: Rising living expenses continue to burden households nationwide. The escalating cost of living poses significant challenges, making it essential for the government to take proactive measures to alleviate this burden. By implementing a range of strategies, the government can offer respite and pave the way for a better quality of life. The government can adopt three critical solutions to tackle the problem.

    Access to affordable housing is a pressing concern affecting many citizens. The government should launch initiatives aimed at increasing the supply of affordable homes. This could involve allocating land for the construction of subsidized housing, incentivizing private developers to include affordable units in their projects or offering financial assistance to low-income families. By investing in affordable housing, the government can reduce the burden of high rental costs and provide families with more disposable income to meet other essential needs.

    Energy costs constitute a significant portion of household budgets, particularly for lower-income individuals and families. The government can address this issue by encouraging energy efficiency measures in residential and commercial sectors. Offering incentives for the installation of solar panels, rainwater harvesting systems, and energy-efficient appliances could help reduce electricity bills. Moreover, promoting public transportation by implementing additional bus routes, expanding rail networks, and subsidizing fares would decrease individual reliance on private vehicles, thus mitigating the impact of rising fuel prices.

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    Enhancing educational opportunities and skill development is crucial to empower individuals to adapt to economic changes. The government should prioritize investment in the education sector, ensuring quality education is accessible to all, regardless of socio-economic backgrounds. This could involve creating scholarships, grants, or work-study programs to alleviate the burden of tuition fees.

    Additionally, fostering partnerships between educational institutions and industries would help align the curriculum with market demands, equipping students with practical skills that increase employability and earning potential.

    The high cost of living has become a pressing issue requiring immediate attention.

    The above solutions would foster a more equitable society where individuals have access to affordable homes, reduced energy costs, and enhanced opportunities for a prosperous future. By taking decisive action, the government can create a better tomorrow for all and ensure that the high cost of living no longer poses a persistent challenge for our citizens.

    • Maryam Kamilu, Borno State University, Maiduguri.