Economic Trends in Nigeria: Addressing the Cost of Living Crisis 

Deborah Oluwumi
By Deborah 6 Min Read

On May 11th, we had a heartfelt and insightful discussion on Trends Connect with our distinguished guest, Mrs. Tope Tinubu, regarding the prevalent issue of the cost-of-living crisis ravaging the nation.

During our discussion, Mrs. Tope Tinubu, a seasoned entrepreneur, event planner, and project manager, emphasized that the inflation and cost-of-living crisis we are experiencing today is not unique to Nigeria but a global issue. She shared an example of how a friend in Canada discovered her favorite grocery store had closed and left the country because of harsh economic conditions.

According to Mrs. Tinubu, the general prices of goods and services are rising beyond our control, subsequently affecting our purchasing power. Everyone feels the impact, particularly entrepreneurs, employers, and employees.

Main Factors Contributing to the Current Cost of Living Crisis in Nigeria

Several factors contribute to the cost-of-living crisis. One prominent example is inflation, ranging from increased food prices to higher rent. As of April 2024, the inflation rate in Nigeria reached approximately 15.7%, significantly impacting commodity prices.

Other contributing factors include an erratic and inconsistent power supply, simultaneous fuel scarcity, and rising fuel prices, which are particularly challenging for entrepreneurs in the production industry. Fluctuating exchange rates (affecting imports and exports), corruption, and inadequate infrastructure also exacerbate the crisis.

Images source: Getty Images

Practical Tips for Addressing the Cost of Living Crisis

Despite the severity of the situation, there are ways to manage this challenging reality. Mrs. Tinubu emphasized that while we may not have direct control over inflation and the cost-of-living crisis, there are coping strategies and managerial skills that all Nigerians can use, regardless of social class and financial status.

The Role of the Government

According to Mrs. Tinubu, inflation is a silent killer that erodes the value of our money. Therefore, sound but humane monetary policies are needed. These policies must be clear and focused on benefiting the average Nigerian. For instance, the Central Bank of Nigeria (CBN) could implement tight monetary policies, such as increasing interest rates, to reduce the money supply and curb inflation.

Additionally, investing in sectors like agriculture, technology, and infrastructure can help stabilize prices, rather than focusing solely on the nation’s supposed most prized possession—crude oil. Furthermore, the government should consider the most vulnerable Nigerians by providing food subsidies, cash transfers, and low-income housing. Economic concerns should be a priority, as they are crucial for the nation’s stability and growth.

The Impact of Income Inequality on Nigerian Households’ Basic Needs

In Nigeria today, the wealth gap is widening, with the rich getting richer and the poor getting poorer. However, this can often be attributed to individuals’ financial desires and actions. While we may lament our current situation, exploring new opportunities for a better living.

Image source: Medium

Mrs. Tinubu shared her personal experience, stating, “I am an event planner, but I also speak at events. I learned public speaking by watching TED talks and YouTube videos. I overcame my shyness to speak confidently to crowds, regardless of their size.” This self-improvement effort helped her combat poverty on a personal level.

Critical and creative thinking, along with self-development and initiative, are essential in alleviating poverty. If you don’t take steps to improve your situation, no one else will. Continuous learning and growth are crucial to staying ahead, both educationally and financially.

The Role of the Private Sector in Addressing the Cost of Living Crisis

While companies might not increase salaries in this economic climate, they can provide support for employees. Some private companies are already offering housing accommodations, subsidized meals, hybrid work options, and transportation allowances. Others are even installing solar panels for their hybrid staff and providing mental health support.

The Role of Individuals and Households

Practical measures are essential for individuals and households. Budgeting and prioritization significantly impact our lives. For example, as an event planner, I advise my colleagues, “You don’t need new attire for every event!” Many Nigerian households are finding creative ways to manage meals, reducing reliance on processed foods because of rising prices. This is a time for critical and forward-thinking, a time to “open our eyes.”

Enhanced security is also crucial; you don’t want your phone stolen during this period. Prioritize your health, education, and other vital needs. Many other things are luxuries (for instance, you don’t need three cable subscriptions).

For employees, especially breadwinners, this is the time to excel and become indispensable. Make yourself in demand, as employers may consider reducing staff numbers. Ultimately, your happiness is in your hands, and you must find ways to make things work for you.

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