Times are hard, even for advanced economies.
Everyone feels the pinch of high inflation and general economic slowdown—economists call this stagflation. There is a 98.1% chance the global economy will slide into a recession next year. And the IMF predicts that global growth will fall to 3.2% in 2022 from 6% in 2021, while inflation will peak at 8.8% at the end of 2022.
Nigeria is not left out.
Like the rest of the world, Nigeria is experiencing sluggish growth that will spill over into 2023. In the last ten years, the economy has grown by a tiny 2.5% (average), 12.8% below the last time we recorded double-digit growth of 15.3% in 2002.
With the country facing more than just growth problems, it has become imperative for policymakers to focus on pro-economic development policies like investing in human capital in the real sectors of the economy (agriculture and manufacturing).
Growth will eventually follow when economic development is at the core of policymaking. It is a win-win for the economy as the living standard of people will improve alongside economic productivity.
The Nigerian economy is deep in the throes of rising energy and food costs. Diesel prices rose by 174% to ₦790/liter between January and September. And on average, the price of sliced bread (500g) has climbed by 33% to ₦512 (September 2022) from ₦384 last year (September 2021). So, it is no surprise that the latest inflation data puts Nigeria’s inflation rate at 21%. Even Nigeria’s core inflation (which excludes the prices of more volatile items like food and energy) is at 17.6%, a 3.7% increase from January. You will agree that Nigerians are getting poorer every day, and living standards are deteriorating quickly.