Suppose the CBN is doing what it can to tackle high inflation, and the government is not pulling its weight by putting in place appropriate fiscal measures and responsive macroeconomic policies. In that case, the effort of the apex bank will come to nought.
On May 29 2023, President Bola Tinubu announced the removal of the subsidy on petrol and the exchange rate during his swearing-in. The two subsidy schemes have long been considered a drain on the nation’s lean resources, and their removal, the government and some experts say, will free up funds to be spent on other critical areas of the economy and, in turn, herald a new era of economic prosperity. But that is not to be. What happened instead is an instant galloping inflation and an unprecedented cost-of-living crisis.
In the months that followed the removal of these subsidies, prices of basic goods and staple household commodities went up by more than 200% or even higher in some cases. Since the removal of the subsidy on petrol was done haphazardly and without prior arrangement and measures to mitigate its impact, Nigerians were left in a lurch to find a way to survive the harsh and precarious reality.
The government claimed the removal of the two subsidies without any plan to cushion its debilitating effect on the people was a necessary evil and the people must endure the momentary suffering and hardship for future prosperity.
Inflation is not just an economic index or a yardstick to measure government performance. It is a phenomenon that shapes the trajectory and direction of the lives of people. It determines the social status of a people. It can elevate and hasten the success of an individual or a group of people and can brutally kill the dream and dash the hope of a better and prosperous life. Low single-digit inflation affords people the opportunity to grow, live a decent, comfortable life filled with the trappings of modernity. Low inflation means a buoyant middle class and a critical mass of upwardly mobile youths which then translates to a thriving economy.
High double or even triple-digit inflation, on the other hand, is a recipe for economic downturn and social decadence. It impedes growth and stifles aspiration. High crippling inflation means a cost-of-living crisis.
The middle class is wiped out pushing the majority of the people, who were hitherto middle class, into poverty. High inflation kills dreams and ambition. It sabotages growth. It breeds indignity. It fuels self-hate and sows doubt. It’s an albatross to financial freedom and prosperity and ultimately tanks and destroys the economy. And this has been the reality of Nigerians in the last two years.
In the last two years, runaway inflation has eroded the purchasing power of Nigerians, decimated their disposable income and rendered their savings useless. This has plunged many into poverty, with many previously well-to-do citizens now living from hand to mouth, and many lower-middle-class citizens now tossed into the abyss of abject poverty.
Nigerians now spend over eighty per cent of their incomes on food and transport alone. Owning a house and a car is not part of their aspirations, as inflation has made it impossible to dream of worldly possessions.
As the citizens continue to experience deeply unsavoury and damaging changes in fortune, politicians are living extravagantly and flamboyantly, refusing to heed their own admonition of austerity, frugality and sacrifices for the good of the nation.
On Thursday, the National Bureau of Statistics, NBS, announced that Nigeria’s inflation rate reduced for the fifth time in a row to 21.12 per cent in August, down from 21.88 per cent in July 2025.
According to the inflation rate data released on Monday, on a month-on-month basis, Nigeria’s inflation eased by 0.74 per cent. Similarly, the food inflation rate stood at 1.65 per cent on a month-on-month basis.
While the NBS has reported a decline in inflation in the last four months, this reduction has not translated to a reduction in the prices of food and basic commodities and household items.
Many families still struggle to make ends meet. Last year, in July, the government announced an import waiver for essential food items to cushion the impact of food inflation. The federal government, in a letter by the Ministry of Finance dated July 2024, disclosed that the suspension of import duty on rice, wheat, maize and other essential food items was aimed at easing the surging cost of living crisis in Africa’s most populous nation.
However, the policy was not implemented as the free import window was to start on July 15 and end on December 31, leaving Nigerians to continue grappling with galloping inflation.
While the Central Bank of Nigeria (CBN) has continued to raise interest rates to bring down inflation, the monetary strategy has proven to be counterproductive as it has only made the business environment harsh and unfavourable to entrepreneurs and business owners who need loans from banks for their businesses.
If the CBN is doing what it can to tackle high inflation, and the government is not pulling its weight by putting in place appropriate fiscal measures and responsive macroeconomic policies, then the effort of the apex bank will come to nought.
No amount of interest rate hikes will end insecurity if the government does not summon the will to do so. Insecurity is largely responsible for our food inflation as our farmers have been displaced by rampaging armed non-state actors.
Our agricultural belt in the middle belt region and some parts of the northern region have become a field of carnage reddened by the blood of innocent and hapless farmers and rural dwellers killed in the senseless and mindless ogre of violence.
If the government is interested in genuinely bringing down inflation, then it must first frontally address insecurity and deal decisively with those behind the violence and killings. No peace talks with bandits, no amnesty for killer extremists and no rehabilitation of terrorists. Just the full wrath and might of the government unleashed on them to crush them.
If possible, the government should reconsider its stance on fuel subsidy removal as it’s the trigger of the existential cost-of-living crisis we’re now grappling with. While at it, it must also make a conscious and deliberate effort to prune the size and cost of governance and also tackle corruption head-on.
It is not only unfair but diabolical to ask the people to endure the hardship that the policies of your government have brought while the president and other public office holders live an obscenely ostentatious lifestyle in distasteful insensitivity to the plight of the people.