Against the backdrop of rising cost of living, Nigerians, irrespective of their social status, are facing greater difficulties in making ends meet and these appear to be breeding frustration and anger
Time was 12.30 pm, Saturday, May 19, 2012, and as Yinusa Ajala, a cobbler based in Ibadan, the Oyo State capital, watched hopelessly as his wife of seven years prepared his three children for an outing, so many thoughts played on his mind. One, he was expectant that the outing, a weekly affair, would be successful, as such would put food on his table that would last his family of five some few days. That meant that the children would not go hungry for the period the earnings lasted the family. If Ajala could have his way, he would be willing to trade places with his wife or wish that things were different, but times are hard and there is absolutely nothing he could do about his pitiable condition. So he waits for their return from every outing to take proceeds from their act of begging and scavenging at parties in the metropolis.
For the Ajalas, life has always been a rat race. For two years now, their breadwinner, who lost his job as a casual labourer in a cosmetic firm in Ibadan, has been struggling with the upkeep of his family. His wife, an illiterate, could not hold down a trade successfully. “I tried to encourage her to start petty trading, but she cannot account for her wares, and so she had to stop when instead of making profit, she was always recording losses,” he said. Things became very difficult for the family sometime in January, when prices of goods and commodities skyrocketed. “I knew I was in for a terrible time when shortly after the partial removal of subsidy on fuel, my wife cried home one day to say she could not get much to buy in the market with N500. Before then, she could prepare a pot of soup with that amount and still buy garri for the house. I’m not rich, the money I make from shoe mending is small, so all I could do to console her was to assure her that God is in control,” he further explained.
The Ajalas are not the only family going through hard times. The Danso family also has tales of woe to tell. But unlike the aforementioned, Olufumilayo Danso, the mother of the family, is a retired secretary at the high court of justice, Abeokuta, Ogun State, and her aged husband is also not working. While preparing for her retirement, she had laid out plans on how her family would survive with the little she would be getting from her pension. But things sometimes do not turn out the way they are planned. Madam Danso has five children; one is a graduate, two are in higher institution and the remaining two are in secondary school. Coping with their upkeep is a daunting task, as her graduate son is unemployed and so cannot make any financial contribution to the family’s upkeep. She explains: “Before now, we [were] coping perfectly. My children knew how much I [was] getting as salary, and we planned within its limit. But now that I’m out of job, we have to make some adjustment to our lifestyle. For example, we have stopped preparing two different kinds of soup at the same time. We cook more of beans that will last us a whole day, so that we can eat it with bread, garri or ogi. Besides, we also prepare our soup with plenty of water so that as we warm it, it can still retain its taste.”
Mary Ajayi, executive director, Women Organisation for Development and Empowerment, a non-governmental organisation, is not a very rich woman, but she appears comfortable. When asked how she is coping with the present economic situation in the country, Ajayi said, “Things are generally expensive and the cost of living is getting so high, so much that sachet water which sold for N5 before the reduction of subsidy, Ajayi said “pure water which is the commonest thing one can buy now sells for N10. You can then imagine what has happened to all other commodities.”
Every week, Ajayi spends between N8,000 and N10,000 to sustain herself and her son. Part of the money goes into purchasing petrol for her car and her power generating set. Nevertheless, she is much worried about the women her organisation caters for. “Every time these women come around, it is always with tales of woes. Some would say they have not eaten for about two days, while some would complain that they only eat once a day. Those with children feed them with ordinary pap, which cannot even sustain them, while some have resorted to buying boiled or roasted corn to battle hunger. Everywhere, you can see poverty in the land, yet there are those who have so much that they don’t know what to do with it,” she lamented.
Most Nigerian families belong to the low, middle or high class. But these “three tribes” now appear to be bound by a common fate – poverty, no thanks to the poor economic situation which has strained family finances and prompted some of them to reduce the quality and quantity of the food they eat. “Most people do not eat what they desire now, but what is readily available and affordable,” Gabriel Akinyemi, chief executive officer, Valmon Securities Limited, a stockbroking firm, noted when lamenting that the removal of subsidy has unleashed more hardship on Nigerians. According to him, households’ income is no longer adequate to meet the needs of most families who are also made to bear the burden of manufacturers through high cost of items. Operating under a very harsh environment, manufacturers incur huge operating cost, which they invariably pass to the consumers, thereby further worsening their plight.
Using his experience as an example, Akinyemi said many stockbroking firms have closed shop due to dwindling fortunes. The few surviving ones are struggling to keep afloat. “Some of us that are still operating are just lucky, because income is not coming in, yet we have to sustain the business. There is no business that can run without electricity, and generating that alone is backbreaking. We spend so much on fuelling generating sets, which have become the main power supply while the public power supply by the Power Holding Company of Nigeria, PHCN, has turned to back-up,” he said. His testimony is a confirmation of the damage that the perennial problem of inadequate power supply has caused to businesses across the country such that they no longer have the capacity to expand their operations and thus unable to create jobs. At the home front, the situation is not different as Akinyemi narrated how he spends about N60,000 monthly to power his generating sets, and even more on feeding. “You can imagine what N60,000 can do in the life of a fresh graduate. The general running cost of the family is high, and with dwindling income, the situation is worse,” he added.
Obayemi Oladapo, also an entrepreneur, corroborates Akinyemi’s admission. Though what he earns yearly runs into millions of naira, the bulk of it goes into maintaining his family, both immediate and extended family. “Every month, I spend between N300,000 and N400,000 for feeding allowance, car maintenance, purchase of petrol, salaries to the driver, the wash man as well as the security man. By the time one pays for all of these, the whole income is gone,” he said. Oladapo has since learnt to make adjustments to his family budget. Taking his family on trips or vacations within the country and abroad, which he used to do regularly, is no longer high on his priority of things, as he now keeps a low profile. He also wanted to set some funds aside for future investment, but have been unable to do that. “I realise that I keep dipping my hands into my savings to offset feeding allowance, as my wife keeps complaining that commodities are very expensive in the market. I believe her because I too buy things for the house and I can say things are generally costly,” Oladapo said.
Oladapo is equally worried about the fate of some Nigerians who recently lost their jobs. He was referring to those who once plied their trade in the banking, telecommunications, and maritime sectors. Then perceived as the middle class, many of them are facing the reality of having no means of livelihood and have come to accept that the parameters to determine membership of that group would have to be redefined. Many of those who have lost their jobs have since joined the army of jobless Nigerians and further expanding the size of the low class who cannot afford the basic things of life like food and shelter.
The thinking in many circles is that adverse economic conditions in the country have dethroned many Nigerians from the middle class status to a lower level, whereas those already considered poor are sinking deeper into poverty. The current situation has put a question mark on a recent report by the Renaissance Capital, RenCap, an investment consultancy firm, which claims that the middle class in Nigeria is growing based on what it describes as the investment opportunities and favourable macroeconomic indices in the country. That conclusion was also drawn by the International Monetary Fund, IMF, based on the per capita gross domestic product, GDP, which it said rose from $390 in 2001 to $1,541 in 2011. The figures are expected to reach $2,000 by 2016. If that were true, the level of poverty in the country should have gone down considerably. But the National Bureau of Statistics, NBS, has not captured any decline in the level of poverty. Rather the NBS report says that there is a rise in poverty levels in the country. This appears to be a reflection of the situation in Nigeria.
The NBS report has an ally in the British Broadcasting Corporation, BBC’s, analysis of the poverty situation in Nigeria, which indicated that the population of Nigerians living in poverty has risen to nearly 69 per cent. The report stated further that about 100 million Nigerians live on less than $1 (N150) a day. In addition, the NBS report predicted that the trend was likely to continue in the years ahead. The reality of the prediction is already staring Nigerians on the face, as many of them are already experiencing hard times due to growing insecurity, unemployment, job losses as a result of folding up of factories and high cost of goods and services. Matters may get worse in months ahead, as there are plans to increase tariff on electricity by the first week of July and re-introduce toll gate fees, among others.
Already, many Nigerians are complaining that despite the poor power situation they are grappling with, they will soon be made to pay more for electricity come June 1, as plans have been concluded to raise the current electricity rate by 88 per cent. By this, residential consumers will have to pay as much as N13.72k per kilowatt, kwh, per hour, from N7.30k while commercial consumers will pay N20.68k per kwh, and industrial customers may pay up to N28.20k. Currently those who belong to that group are paying N15 per kwh.
Olajuwon Okubena, proprietor, Health Forever Living Product, makers of Jobelyn, a dietary supplement, also bemoans the fate of Nigerians in these hard times. For him, Nigerians at all levels of the socio-economic class are becoming poorer and poorer, as all the basic essentials of life people take for granted in developed societies are beyond the reach of most Nigerians. Citing electricity as an example, he said in the 1950s and early 1960s, electricity was very constant, and whenever there was need to disrupt supply even for less than an hour, the public would be notified. The reverse is the case now, as electricity remains a scarce commodity and no apology from officials whenever there is going to be a blackout. Okubena is irked that for decades, Nigerians have been inundated with tales of how government would improve power generation and distribution only to be disappointed. “For over 10 years, government has been promising that it will increase power generation from 3,000 megawatts to about 6,000 megawatts or more, but all we have been seeing is movement without motion,” he observed.
It is the general belief that Nigerians are a very resilient people, and that given adequate electricity many would create and sustain businesses that would in turn generate employment opportunities, thereby removing many people out of the poverty bracket. Currently, no socio-economic class is excluded from the unemployment market, as they all suffer the same fate. The economy, as it is, does not guarantee better life for many Nigerians even though its growth is being celebrated. At 7.8 per cent, the economic growth is significantly higher than the global average of 3.9 per cent. But this has not translated into an improvement in the welfare of the people. Akpan Ekpo, director-general, West African Institute for Financial and Economic Management, WAIFEM, who described such growth as “jobless growth and paper growth” stressed that rising economic growth is inconsistent with rising poverty and rising unemployment. He argued that the high rate of unemployment has increased the number of poor people, a disturbing situation which he said needs to be addressed effectively. According to him, the official rate of unemployment has increased to 23.9 per cent as at November 2011, as against 21 per cent in 2010.
Over the years, governments have been unable to tame inflation, which is set lose to inflict more pain on the people through the high cost of goods and services. Ekpo, a professor of economics, is equally worried about the country’s inflation rate, which is almost 13 per cent. Ekpo insists that high rate of inflation hurts the poor more than the rich, as the rich could always draw on their savings to meet their needs. But the rich also cry in that sometimes they are forced to live from hand to mouth with little or no savings at all. Ekpo explained that 66.1 per cent of the absolutely poor live in rural areas while 52 per cent live in the urban areas. In addition, he said 73.2 per cent of the rural residents are relatively poor as against 61.8 per cent urban residents. He said the population of poor Nigerians, defined as those who live on less than $1 a day, has increased from 17.1 million in 1980 to 112.47 million in 2010, a figure which represents about 69 per cent of the country’s population.
Ekpo attributed the cause of poverty in the country to nature, wrong or inconsistent policies, poor economic management, corruption and rent seeking, decay in social and physical infrastructure, low human capital development, conflicts, insecurity resulting in displacement of persons, among others. Stanley Okoro, who retired eight years ago, noted that there are many rich-poor Nigerians in the country. He was referring to those who live from hand to mouth and have nothing left to save or invest. “If your monthly income is N100,000 and you are able to rent a flat and have a small car, the poor or unemployed will consider you to be a rich man. But the truth is that there is a very thin line between you and them,” he argued.
Even if they think otherwise, government insists it is doing enough to improve the welfare of the people. Indeed, as observed by Ekpo, “All governments in Nigeria have always formulated and implemented various poverty alleviation programmes, yet the impact of such programmes has been sub-optimal.” To help improve the standard of living of the people and depopulate the low class, therefore, Okubena advised that government should revitalise the economy to create job opportunities. Besides, he wants government to subsidise agriculture, which is said to provide 70 per cent of the labour force, in order to encourage the poor farmers. Agriculture has been one thriving sector that can create employment for the vast majority of youths roaming the streets, but there are fears that government is only paying lip service to the idea of revitalising the sector. Experts have been agitating for a total revamping of the agricultural sector, arguing that the surest way to keep the economy buoyant as well as to put food on the table of Nigerians is to massively support agriculture. Oladapo also opined that if government can revive the agricultural sector, about 50 per cent of the unemployed will be off the street, which may significantly checkmate insecurity and crime. The authorities say the ongoing reforms in the sector are designed towards these objectives.
Apart from agriculture, experts want government to also subsidise the education and health sectors to make education and health services accessible and affordable to majority of Nigerians, irrespective of their socio-economic standing in the society.
Akinyemi recalled what operates in the 1970s when those who could not go to the university were encouraged to attend technical schools, where they learnt skills that readily put food on their tables. “I remember people who learnt plumbing, electrical engineering, automobile engineering, and who became entrepreneurs themselves, making money and also providing employments for others. Such processes should be encouraged,” he urged.
As Nigeria once again mark its Democracy Day, the issue of welfare of the people has again been brought to the fore. The thought in the mind of most Nigerians is whether they are indeed reaping the dividends from the democratic culture, which they fought to enthrone. Within three decades, China was able to lift about half a billion of its population out of poverty through sound economic engineering and an uncompromising stand against corruption. Nigerians believe the Chinese miracle could be replicated in the country. But does government have the political will to do this and liberate Nigerians from the shackles of poverty? This is a crucial question begging for answer.