By Dr. Ugoji Egbujo
The ordinary man deserves a basic life. In March, a bag of POP cement sold for 3500 naira. Today, that same bag sells for 8,500 naira. You might say POP is no food. But if the building industry slows, many Nigerians will go unemployed. That will include sand miners, masons, carpenters, those who work in block industries, tilers and roofers. The price of sisal fibre has doubled in the last two months.
Nobody can explain what’s going on. A bag of Dangote cement sold for 2300-2400 in the open market in March this year. Today, that same bag of cement sells for between 3300-4000 naira in the open market. Someone said there has been an upsurge in building activities since the country was reopened. I doubt that the scarcity and consequent price increases of nearly everything can be explained by the unlocking of a lockdown.
The CBN governor has said the foreign exchange black market is shallow and capricious. In other words, it has no real impact on the economic life of the country. I disagree. The parallel market might be shallow but when it catches a fever, the country convulses. It sends a signal of economic instability that disrupts everything else and makes even deeply rooted things tremble.
The naira has traded for over 500 naira to a dollar. If companies like Dangote Cement and Lafarge don’t operate in the black market, what then can explain the steep rise in prices of their products when the economy is in a recession?
Let’s go to food. The prices of food items have risen sharply. Onions cannot be found. Though the prices of locally produced rice hasn’t hit the skies, they are at least 20% higher than they were eight months ago. So why would the price of locally produced rice be higher just after the rainy season?
The ordinary man deserves a life.
He can’t have a life if he can’t have access to basic necessities of life. It is true the pandemic was expected to throw our economy off the cliff. We saw our crude laden ships languishing on the seas looking for buyers to buy it for nothing. We saw our crude production quotas slashed in a joint effort with others to buoy up drowning oil prices.
We saw the West and China shut themselves off and the world shiver behind closed doors. We locked our country for many months as the virus prowled. We saw the danger coming. So we expected a recession. Those who lament our descent into a recession are either ignorant or mischief-makers. That said, the ordinary man must live. He can’t live if essential goods are priced out of his reach.
The October prices of steel rods are 50% higher than March prices. Nothing can explain this situation. But the government needs to explain it and help resolve them. If unchecked, it could go from an economic problem to a security problem.
A friend runs a civil engineering company. He employs over a hundred young people. The company has shut down. They cannot build houses now because nobody can buy a house built with POP cement bought at a price that is almost 300% March prices. His workers are on leave without pay.
They won’t be able to pay their children’s school fees in January. I don’t know what would happen to those who supply him building materials. I don’t know what would happen to those who own the small schools that the children of the laid-off workers attend. There is already enough frustration in the land. We can’t afford this confusion.
I have looked at the 2021 budget proposals. I know we have fairly good Debt—GDP ratio but our income stream is weak and our debts are mounting. Taking more loans for consumption looks foolish. But what we can’t afford is social upheaval. We must fashion a budget tailored to rouse our economy and provide ordinary people with a breathing space.
In the immediate aftermath of the pandemic, we must seek to let people breathe. In 2021, we must loosen our belt. We must slacken our grip and allow a temporary encouragement of importation of goods that local producers have failed to meet critical local demands. Cement prices must come down or be pushed downwards. It is good the government has lowered tariffs on imported cars.
It must lower tariffs on basic imported goods until local manufacturers can find their rhythm again. The resumption of heavy importation might indeed worsen the plight of the naira and drive the economy into turbulence. It is, however, hoped that these stabilization measures would be temporary and that a revival in the fortunes of oil in the imminent vaccine-induced post-COVID era would help to cushion those effects.
Fist of all, the ordinary man must live.