Nigeria’s $432 billion economy has been experiencing tough times, from inflation, to growing public debt and rising unemployment.
Here are five charts that explains the economic crisis bedevilling Nigeria
Increasing Food Inflation/Inflation
Nigeria’s Inflation has continued on an upward surge throughout the first five months of the year, according to the National Bureau of Statistics.
This has led to an increase in prices of goods and services in the country.
Nigeria’s food index rose to 19.50% in May, 2022, up from the 18.37% figure recorded in April 2022.
Unemployment
Unemployment has also been on the increase in the country according to the National Bureau of Statistics. The chart below shows a five-year trend of the increase in Nigeria’s unemployment.
Foreign and Local Debt
Nigeria has continued to increase its borrowings, leading to higher public debt. This also means that Nigeria has continued to incur increased debt servicing figures, putting pressure on already insufficient revenue.
A Dataphyte report recently warned that Nigeria may exceed its Medium Term Expenditure Framework with continued borrowings.
Poverty
Poverty has continued to rise in the country. A Dataphyte report noted that the number of persons hit by poverty in the country is projected to rise up to 95.1 million by this year. Almost half of Nigeria’s population of 200,000 million will be poor by the end of 2022.
Fuel Scarcity and Subsidy
Nigeria has continued to suffer from fuel scarcity which has further worsened the inflation in the country. There have been reported disagreements between marketers and the government. The marketers have said they want an increase in the price of petroleum noting that the official price of N165/litre is no longer sustainable.
If the government maintains its subsidy policy, keeping prices down and acceding to the marketers’ demand, its subsidy bill will become even more astronomical. Already the World Bank has projected that Nigeria’s subsidy bill will rise to 2% of its GDP. A Dataphyte report had noted that the 2022 subsidy bill is 74% of the capital expenditure for the year.
This year alone, there have been conflicting figures on how much the government is spending on fuel subsidies.
A budget of N4 trillion was approved by the government but that has been noted as insufficient in face of increasing prices of crude oil at the global market and Nigeria’s weak currency.
Although the government has continued to express commitment to development, higher subsidy bills will impact development especially for a country with an infrastructure need of $1.5 trillion.