All over social media, in the markets, commuter buses, among workers, and ordinary Nigerians and in conversations among kith and kin, there is lamentation. And it is all centred on the terrible financial situation of the nation.
Even the intellectuals and other elite are not immune from the effects of the devastating worsening impact of the United States dollar on the naira. The devastation saw the Nigerian currency hitting N1,200/$1 last week. The naira has also continued its free fall in value against all the major currencies and even the West African CFA, which was not so in the past, reports Sunday Sun.
Today, parents who are carrying the burden of school fees, particularly for overseas students; traders, commuters, workers professionals, importers, operators of various small businesses and the executives of big enterprises are angry and frustrated. People wring their hands and stare into emptiness, lost in thought as they brood over how they will survive the hard times occasioned by the continuing fall of the naira. Already, several independent petroleum marketers, who import petrol and diesel have temporarily stopped importation due to their inability to source affordable foreign exchange, especially as the fast-rising landing costs would mean selling at a great loss given the current fixed pump price regime imposed by the federal government.
Deacon Pat Nwabunnia, a maritime consultant, who has been in the business for over 30 years is deeply disturbed by the severe impact which the continuing fall of the naira and other policies of the government have had on the economy.
“Before this government came in, things were already going bad. Some of us had to withdraw from direct importation because of the way the exchange rate was going,” he told Sunday Sun in a phone chat.
“But when this government came in the situation became terrible with the subsidy removal on the day President Bola Tinubu was sworn into office. Everything went upside down, there was confusion in the economy, followed by the policy of allowing the naira to float. It was a horrible policy. The previous government had a way of controlling our foreign exchange rate. When your country has nothing to back up its currency why should you allow it to float against other nation’s currencies that have better economies?
“If you are not exporting other goods and services how will you earn extra foreign exchange to support your currency? The Federal Ministry of Finance in collaboration with the Nigerian Customs Service can wake up any day and decide on the duty to be paid. In Nigeria you don’t pay duty based on the value of what you import, but on the size of the container. That is what has been happening for the past four or five months.
“I have never seen anything like that happen before, it is not done anywhere. There are items you can use N80 million to fill a 40-feet container and there are other items you can spend N200 million to fill the same 40-foot container. Nigeria Customs now charges duty based on the size of the container, not the value of the goods in it. It is only in Nigeria that this happens. You don’t develop the economy by over-taxing the people. That way, you make them poorer.
“Today, because of the falling Naira, a lot of people have abandoned the cars they imported at the ports because of the terrible duty rate imposed on them. Before this administration came in, we had over 4,000 abandoned containers of imported goods at ports in parts of the country. Today, as we speak, thousands of more containers are being abandoned at the ports.
“Before May 29, you could clear a container with N7 million, but now, you have to spend about N11 million or more. After spending that amount, how much can you sell the goods? Some Nigerians who had business transactions with Chinese companies, who had not yet paid, you find out that by the time the container arrives at the port, if they pay the duty, they will lose a lot of money that it wouldn’t make sense to even clear the container.
“Then last week, terminal operators in collaboration with the Nigeria Shippers Council increased the storage charges by 600 per cent overnight. Where you were paying N15,000 per day as storage charge it was increased to N90,000. When you add 7.5 per cent VAT, it is almost N100,000. So, in just 10 days, you will pay N1 million as storage charge. After a meeting with stakeholders, it was reduced to 400 per cent, which is still too high. For this reason, more and more containers will be abandoned. Who can you sell the goods to? Is it the same Nigerians who are already pauperised by the policies of this government? What has changed in their incomes?
“This situation is leading to bankruptcies across the country. Assuming you had N200 million before now, how much dollar can you buy with the same amount when the dollar is exchanging at N1,300? This horrible situation is affecting everybody,” he lamented.
Though the naira took its precipitous dive after the Central Bank of Nigeria leadership under the President Bola Tinubu administration decided to allow the naira to float (to find its level as said in local parlance), experts do not fully blame the current administration for the fate of the national currency.
“The free fall of the naira is a result of failure in monetary and fiscal policies of the government in the last eight to nine years,” Dr Sam Amadi, director, Abuja School of Social and Political Thought and dean, Law Faculty, Ave Maria University, Nasarawa State, said.
Amadi, a former chairman of the Nigeria Electricity Regulatory Commission, posited: “The Buhari administration destroyed the integrity of monetary and fiscal policies, and failed to enhance the productivity of the national economy. It hid the real situation by shady monetary actions and exceeding prudential guidelines regarding ways and means. Today, the chickens have come home to roost.”
With the rapid descent of the naira against the major currencies, there are concerns that a time will come, and possibly soon, when the national currency will join the ignominious club of low-value currencies that count the Zimbabwean dollar as a member.
When that happens, people will use wheelbarrows to haul heavy bundles of the naira to buy things in the markets, except perhaps they resort to using the electronic payment platforms.
Whether Nigeria’s currency will fall so low to the point where the ugly scenario depicted above will materialise, Amadi carefully offered this caveat: “It depends on what the government does. If it continues on the reckless floating of the naira we may get to that point. But if we become wise and drive a more balanced monetary policy and boost non-oil sector productivity through smart industrial policies, we will escape that fate.”
Tertiary education in dire straits
Students of some tertiary institutions are already beginning to witness a rise in absenteeism as their lecturers struggle to cope with the rising cost of petrol. To conserve fuel, they simply park their cars and stay back at home, resulting in lecture sessions that are not held.
At a famous university in the Southeast known for intellectual rigour in its Engineering faculty, students had assembled for various lectures previously scheduled for the day, which were to run from 9:00 a.m. to 2:30 p.m. They sat in lecture theatres and waited for more than two hours. None of the lecturers showed up. Much later, course representatives after reaching out to the concerned lecturers, announced on the students’ WhatsApp forum that the classes had been cancelled with no new date rescheduled.
Just as the parlous economic situation is hurting teaching and learning, tertiary academic research and publication of works in journals have been impacted negatively as Sunday Sun learnt from a University of Lagos professor, who specifically requested not to be identified.
He said: “Knowledge is an area where the investment materializes in the long term. For a country like ours that is investing little or nothing, you can imagine the impact of the present high cost of living on our academics. We are not able to cope with life not to talk of investing in publications.
“The cost of books and laboratory equipment have risen astronomically, and this is unimaginable. Students can no longer afford photocopies, not to talk of buying books. The price of fuel has impacted regular attendance for lecturers, departmental seminars and life generally. It is almost impossible to go to school every day. Even the students are not able to come for lectures. Unless something is done urgently, the future of this country is in doubt.”
Similarly, another professor at the University of Uyo decried the hardship families are going through, and revealed that most parents in the university community and the capital of Akwa Ibom State had withdrawn their children from distant schools which previously required them to drive the children to the schools or commute in school buses.
The senior lecturer explained that with the steep increase in tuition fees, books, levies, school bus charges and other ancillary fees, it no longer made sense for the children to remain in those schools.
So, their parents enrolled them in nearby schools to cushion the effect of the high cost of fuel. Moreover, families simply parked their vehicles and restricted their use to only the most essential movements that squarely require the use of the cars, like going to church on Sunday and returning home. Visits to family and friends are being done through WhatsApp video calls as the hardship is getting worse and more difficult to bear.
Like his counterparts in other tertiary institutions, Head of Department, Communication and General Studies, Federal University of Agriculture, Abeokuta, Prof Onyekwere G. F. Nwaorgu, is pained by the toll the fall in the value of the naira has taken on academic research and publications, saying that “it has been terrible.”
He explained: “This is because the cost of procuring materials for research has tremendously increased. Some academic journals request assessment and publication fees, which are now beyond the capacity of most academics to afford, particularly when they are foreign-based. Some journal publications, which were not asking for publication fees before have introduced it, while others which used to give some tokens to academics for publishing in their journals have stopped or reduced the amount. Some journals have ceased publication while others have become irregular. Even the payment of membership dues of professional bodies is now an uphill task for most academics.
“The effect on laboratory works is even worse because most of the laboratory types of equipment and reagents are imported. So, lecturers, technologists, as well as their institutions are no longer able to procure them. This has compelled tertiary institutions to increase the various forms of payments by their students to see if the situation could be salvaged to some extent. Still, the complaints by the students and the public outcry have compelled institutions to exercise a lot of caution. So, most of the tertiary institutions are still financially handicapped and, therefore, unable to provide basic learning and teaching facilities.
“In most government offices, including tertiary institutions, employees have reduced their attendance to work. Unofficially, people now come to work not more than three times a week. So, a lot of activities, particularly in those institutions where their workers are not residential, have been generally paralysed. You find that when workers are requested to carry out some responsibilities, which may involve some personal expenditure, they will say they have no money. Even the attendance of students to classes has been drastically affected. Some of the students have not been able to resume.”
Cecilia Njoku sells baby clothes. She is trading under the business name, Claire Onyi Ventures, at the ever-bustling Idumota Market, in the Dosunmu area of Lagos Island.
“The present situation of the country is not helping our businesses,” she said, bemoaning the drastic downturn in sales, noting that the exchange rate has been very challenging.
“If we buy goods today and you place another order, you discover that there is a price surge. When customers who came to patronize you earlier learn that there is an increase in the price they paid two or three days previously they may not buy goods. As of yesterday (Wednesday), my sister who needed to place an order bought US dollars at a rate of N1,230. We import from Turkey.
“We are supposed to be stocking goods for the Yuletide season, but we can’t at the moment because of the high exchange rate. It’s biting hard,” she said.
Similarly, Dele Aberuagba, chief executive of Empire Fashion House, lamented that the rapid fall of the naira has dealt his business a big blow as the majority of his customers are Nigerians resident in the country and who attach more importance to providing food and other necessities of the home rather than spending the little money available on buying trending fashion items.
“In essence, there is a significant drop in the patronage of customers in Nigeria. But because I have customers in America, Canada and the United Kingdom, I am still able to make some sales. I package and send them overseas. I have more patronage from abroad now than in Nigeria. It was not the case before. I had more customers in Nigeria when I started my business. The economic crunch in Nigeria is affecting the fashion industry. Most of the accessories and fabrics we use in designing clothes are imported and the prices have sky-rocketed and sharply increased the price at which we sell.
Parents and workers tell tales of woes
In the Ajegunle area of Lagos, where Madam Chidinma lives with her family, she told our correspondent that she is not finding the present situation funny, adding: “The school fees increment came with an increase in the cost of textbooks, development and other levies, even the cost of making school ID cards for our children.
“The school wants you to buy the books from their stock at a higher price even though they are much cheaper outside. If you buy from other bookshops they reject them. I don’t want to use the word, frustrated, but we are just hoping that God will help us to turn the situation around. Everyone needs to go to school, but with the high rate of school fees, I do not think some people will go to school. Some people will drop out to do business because they cannot afford the school fees.”
On his part, Obinna, in regards to the fate of his children, said: “If I cannot afford the money they will stay at home or go and learn work, that is me. My children’s school fees are too high.”
Mr Ebubechukwu Kanu, visibly angry, his voice harsh and grating, lampooned the government, saying: “Parents are suffering, life is very hard. I do not know what Nigeria is turning into, how can they increase school fees? Where do they want us to get the money from? We are working, but our salary is still not yet increased, it’s still the same and how do they expect us to pay, where are we going to get it?”
Every day that passes and the naira loses more value and its purchasing power due to high inflation, workers like Dominic feel the effect of the pummeling of the naira in the foreign exchange market as the price of commodities (drugs, food, petrol etc) go up daily and transport fares keep pace with the additional increase in the price of fuel.
One immediate result is that most families are barely able to eat two meals a day.
“Recently, a friend of mine who is an anaemia patient was complaining about the high cost of most of his drugs which he said he used to buy at the rate of N10,000 per month. Because of the falling exchange rate of the naira, the price jumped to about N30,000, triple the amount he bought two months earlier. Meanwhile, his salary has not increased.
“It is painful. How does a person function well at work when the salary is stagnant, but the daily costs are rising fast and almost swallowing the little amount you are paid? If the companies could provide staff buses to cushion the effect of high transport fares, at least one can cut other possible expenses and be able to cope,” he lamented.
Bleak Yuletide looming
With the approach of the Yuletide, and the parlous economy persisting, Madam Chidinma shrugged off any thoughts about the end-of-year festivities.
She said: “With what is happening in this country, for now, I cannot say I have anything planned.”
In the past, despite difficulties encountered in the year, most people, especially the Igbo in different parts of the country, endeavour to go home. But this year is not likely to witness an exodus like in the past, Fabulous said.
He added: “There is a saying that no matter how hard the country will be an Igbo man would survive and it’s true. But this time around it is touching everyone. This Yuletide I don’t think that everyone will travel because of the very high fare the bus companies are charging to the East. It is now about N30,000, but by December I am sure it will reach N50,000 or more because of the annual scarcity of petrol. I do not think this Yuletide will be like before, I think this will be the hardest Yuletide ever in the history of Yuletide, but everything is in the hands of God. This country is turning into something else. If money comes I will invest in something.”
“What is Yuletide without the special Christmas rice?” Mrs Nkechi Aja, asked rhetorically, adding that “This Yuletide is not going to be funny. For example, a bag of rice that was sold at N48,000 last week is now N55,000. In some parts of Lagos, it is selling at N60,000. Five fresh tomato fruits that used to be sold at N100 now cost N500. We will try to mark this festival, but we will not travel because of the cost of transportation.”