Nigeria Accelerating Policy Reforms After Protests to Address Cost of Living Crisis, Says Rewane

Following the aftermath of the #EndBadGovernance protests that rocked the country in the first week of August, the federal government is now accelerating its efforts to ensure that policy changes have a positive and meaningful impact on the people’s welfare.

This observation was made on Thursday, by the Chief Executive Officer of Financial Derivatives Company (FDC), Mr. Bismarck Rewane, in his monthly presentation at the LBS Breakfast Session titled, “Cost of Living Protest: Was It Politically Motivated or Hunger Induced?”   

Rewane identified the federal government’s stimulus package, minimum wage, stabilisation measures and duty waiver on staples among the short-term measures that could ameliorate the harshness of the high cost of living in the country.

He observed that the impact of import duty waiver on essential commodities would definitely taper prices and have a knock-on effect on the costs of production, adding that the Naira has steadied in the forex market and is beginning to appreciate marginally.  

Rewane explained: “The APC-led government faced a baptism of fire. As predicted, the faltering economy is the underbelly of the party. The leadership (of APC) has now come to terms with reality and is responding positively.   

“The true position is now being laid bare. Economic data is now being released more frequently with greater integrity. Conciliatory moves are being made across the aisle.”

He said that the recent National Council of State meeting and the Patriot Group visit to President Bola Ahmed Tinubu were evidence that the government was reaching out and deepening its consultations with relevant stakeholders.

He added: “The good news is that damage control is beginning to work and there is a strong possibility of leadership changes at the management level.”

The economist described the high cost of living as, “a situation in which the cost of everyday essentials like groceries and bills are rising faster than average household incomes.”

He added that high cost of living in Nigeria also has a complex impact on Nigerian companies by affecting their cost structures, top and bottom-line growth, investment plans, work force management as well as operating margins.

He identified, “high operating costs, reduced investment and innovation impacting business expansion, the decline in consumer spending due to low disposable income, lower demand fueled by higher prices” as ways the high cost of living affect businesses.

He attributed the potency of the current social crisis in Nigeria to economic hardship that is driven by multidimensional poverty, trust deficit, and credibility gap, adding that the government implemented “policy change without institutional reform” and curbing the “profligacy and lavish living by the government officials.”

The CEO of FDC advised the government to add institutional reform, synchronisation of its economic development plan and press the reset button to its short-term responses to reduce costs of governance and ensure equal sacrifice and sharing of burden among the citizenry.

He also averred that, “reliance on IMF policies has been associated with increased economic hardship for the lower-income segments of society.”

He traced Nigeria’s implementation of IMF policies to the 1980s when the country faced significant economic challenges, leading to the adoption of IMF-backed Structural Adjustment Programs (SAP) aimed at currency devaluation, reduction of government spending, and liberalisation of trade.

“However, these measures were often met with public resistance due to their adverse social impacts, including increased poverty and unemployment.

‘The Fund advised Nigeria to manage its debt by implementing economic reforms as part of the assistance agreements. But the reliance on IMF policies has been associated with increased economic hardship for the lower-income segments of society.”

Dike Onwuamaeze

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