“It’s a crusade”said Olayemi Cardoso on Tuesday September 26 during his hearing before parliamentarians with a view to his confirmation as head of the Central Bank of Nigeria. “And we will succeed, because the future of Nigeria depends on it”he added, not afraid to be solemn to discuss the delicate situation of Africa’s largest economy, also the continent’s largest population, with 220 million inhabitants.
The large West African country is experiencing an economically difficult year. Bad governance and the imbalance in the trade balance are structurally eroding this oil-producing country, which elected a new president in February, in a contested election.
Bola Tinubu is committed to cleaning up the economy of the federal state, quickly carrying out painful reforms, such as the elimination, in May, of the very old subsidies on fuel – which represent 10 billion dollars per year (9, 5 billion euros), for a gross domestic product of 477 billion in 2022 – and a liberalization of the foreign exchange market.
The price of a liter of fuel multiplied by three
The naira, the local currency, has seen its official exchange rate plunge by more than 40% since mid-June, while on the parallel market it fell below the psychological threshold of 1,000 naira to the dollar in September, according to Bloomberg . In sub-Saharan Africa where many countries are nevertheless prey to monetary and financial turbulence, the naira is the worst performing in an index of 24 currencies monitored by the financial agency.
On the price side, inflation has reached 25%, a record for almost twenty years, and the price of a liter of fuel has tripled since the end of subsidies, making transport unaffordable for many Nigerians, including 40%. live below the national poverty line. With massive consequences, even for administrations: certain States have reduced the number of days worked from five to four in order to limit costs for their agents.
“The economic situation really affects all Nigerians, in cities and in the countryside”explains Idayat Hassan, affiliated with the Center for Strategic and International Studies in Washington, specifying that a packet of 50 kilos of rice, a basic commodity, went in a few months from 37,000 naira to 50,000 naira (around 44 euros at 60 euros). “There is a lot of suffering. But Nigerians are extremely resilient and also hopeful that things will improve”adds this researcher based in Abuja, the capital, after the eight years of presidency of Muhammadu Buhari, a former general, putschist in the 1980s.
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