Nigerians are beginning to relive past pains not seen since the military era, when fuel queues and rationing of essential items prevailed, occasioned by shortages of imported commodities, as the economic strain from the collapse in oil prices is worsened by current policy choices.
In a gas station owned by the Nigerian National Petroleum Corporation (NNPC) the country’s national oil company, near Shagamu, a town 70 kilometres from Lagos, attendants began to ration fuel to customers this week.
“They said you can only buy N500 worth of fuel for motorcycles, N2,000 for cars and N3,000 for buses,” Elias Ochili, a bus driver with a major transport company, based in Eastern Nigeria, told BusinessDay.
“I need to buy this fuel and get going, as my passengers are already getting angry. We have been stuck on this queue for more than four hours already.”
The implication is that Nigerians are beginning to experience again, past sorrows not seen since the dictatorship of military strong man, Sanni Abacha, such as either sleeping at filling stations or spending hours waiting for the products that the country is endowed with.
Also, Nigerians sleep at night with the heat and in some homes, pipes have stopped running, as there is no power to either pump the engines or fuel the generators.
Economic growth in 2015 of 2.8 percent was the lowest since at least 1999, as capital controls and the hard dollar peg imposed by President Muhammadu Buhari deterred foreign investors and led to job loses in the manufacturing and services sectors of the economy.
The rigid naira foreign exchange rate imposed by the government has also failed to slow inflation, which rose by the highest levels in four years to 11.4 percent in February.
“Nigeria needs to create an environment that is welcoming to investment,” the U.S Secretary of State, John Kerry said on Wednesday in Washington, on the sidelines of a two-day nuclear security summit.
Nigeria’s policy choices contrast with those of regional peers like Kenya, South Africa and Egypt.
The Central Bank of Egypt allowed the biggest one-time depreciation of the pound since 2003 on March 14, and promised to adopt a more flexible exchange rate.
Foreign investors bought $500 million in Egyptian debt and stocks in the weeks since the Central Bank devalued the currency, according to Central Bank governor Tarek Amer.
Foreign investors are net sellers of Nigerian stocks for a second consecutive month in February to the tune of $105 million (N20.9 billion), according to data from the Nigerian bourse.
The benchmark Nigerian stock index is down 11.6 percent this year, compared to -1.4 percent for Kenya’s main index, and +0.49 percent for South African stocks.
The World Bank forecasts that Kenya’s gross domestic product (GDP) would expand 5.9 percent in 2016, nearly double Nigeria’s expected growth rate this year.
In South Africa, growth in private sector credit demand quickened to 9.02 percent year-on-year in February, from 8.54 percent in January, Central Bank data showed on Thursday.
Expansion in the broadly defined M3 measure of money supply for South Africa was at 10.25 percent year-on-year in February.
Broad money supply (M2) in Nigeria grew by a low 2.29 percent in February 2016 and credit to the private sector expanded by a measly 1.45 percent in February 2016, which when annualised to a growth of 8.70 percent, is below the Central Bank of Nigeria (CBN) benchmark growth target of 13.28 per cent.
“Committee noted with concern the dismal performance of growth in credit to the private sector…this had a significant negative impact on output growth,” the CBN said in a March 22 statement, following its monetary policy meeting.
As the economy worsens, more Nigerians are being left behind without jobs.
The country’s unemployment rate increased by 10.4 percent in the fourth quarter of 2015 from 9.9 percent in Q3 2015, while the underemployment rate (those working, but doing menial jobs, not commensurate with their qualifications, or those merely working for a few hours) jumped to 18.7 in the period, the National Bureau of Statistics (NBS) said in a report released yesterday.
The Nigerian President is meanwhile, yet to sign the 2016 budget into law, which is his only major economic policy (since taking office ten months ago), designed to give a Keynesian boost or stimulus to the Nigerian economy.
“If I were to say I am not disappointed, I would be lying,” said Ochili, the bus driver stuck at the gas station.
“This is not what we expected when we voted for change.”