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Bad news is piling up for Nigeria’s economy. On Monday August 15, the National Bureau of Statistics announced that inflation had jumped for the sixth consecutive month, reaching 19.6% in July year-on-year, its highest level in almost seventeen years.
Prices are exploding in all sectors, be it energy, transport or food. “Unlike many countries where energy expenditure weighs heavily on household budgets, in Nigeria people spend most of their wages on food”recalls Cheta Nwanze, of the research firm SBM Intelligence.
Food inflation thus reached 22% in July, while a Nigerian household spends on average 57% of its income on food, much more for the poorest. The insecurity affecting agricultural regions and the flight of peasants forced to leave their land to escape jihadists or armed groups partly explain the poor performance of Nigerian agriculture, according to Cheta Nwanze. But the analyst also mentions “bad political choices” and points to protectionist measures and high taxes on imports of certain commodities.
A grotesque situation
Despite soaring prices, Nigeria’s oil revenues have not increased in recent months. Structural mismanagement, corruption and thefts along pipelines hamper national production, which stagnated at 1.238 million barrels per day in July, well below the quota of 1.799 million allocated by the Organization of Exporting Countries. oil (OPEC). However, Nigeria needs US dollars to finance its imports of food, but also of fuel, since none of the country’s refineries are operational.
To compensate for this ludicrous situation, the government of Africa’s largest crude producer is spending crazy sums on subsidies to keep the price of gasoline at the pump at 165 naira (about 40 euro cents). During a hearing before the National Assembly on Thursday August 18, the Minister of Finance revealed that Nigeria is currently spending 18.69 billion naira (over 44 million euros) every day to finance this expensive and controversial measure. .
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