Abuja (AFP) – Nigeria is heading towards the “light at the end of the tunnel” as the country grinds through the second year of a cost-of-living crisis, President Bola Tinubu said Friday. The West African heavyweight has been beset with soaring inflation after Tinubu, elected in 2023, scrapped a costly fuel subsidy and liberalised the exchange rate for the naira currency.
Though the government and international institutions such as the International Monetary Fund have said the reforms were much needed, ordinary Nigerians are going through the worst economic crisis in a generation. “The past year tested our resolve but through the economic discipline and strategic reform, we achieved what many deemed impossible,” Tinubu said, while signing this year’s 55.99-trillion-naira ($37-billion) budget. GDP figures released this week showed the Nigerian economy grew at 3.8 percent in the fourth quarter of 2024, the fastest in three years.
Tinubu cited the growth — as well as forex reform, a raise to the minimum wage and an increase in government revenues to 21.6 trillion naira in 2024 — as evidence that the changes were working. “After the initial turbulence…the take-off was very cloudy and uncertain,” he said. “Today, we see a light at the end of the tunnel.” As Tinubu nears the halfway point in his first term as president, some analysts expressed cautious optimism this week when the GDP numbers were released, citing price stabilisation.
When he presented his budget in December — initially proposed to cost 47.90 trillion naira — Tinubu said restoring macroeconomic stability and improved security would be key planks of 2025 government spending. Nigeria’s central and northern regions have suffered a jihadist insurgency for 15 years. Gangs with ties to Boko Haram and the Islamic State West Africa Province (ISWAP) have also gained a foothold.
The government hopes for a better performing economy in 2025, with reduced petroleum imports as domestic refineries increase production and a bumper harvest that could reduce reliance on food imports. The country recently revised its inflation data, knocking down official year-on-year inflation in January to 24.48 percent, from December’s 34.80 percent figure.
But many people continue to feel the squeeze, especially as rents soar in the economic capital, Lagos. Renters and real-estate agents have recorded rent spikes of between 100 and 200 percent in some parts of the mega-city. Those who saw smaller hikes were still looking at increases of 30 percent in some cases — a significant sum as many people’s salaries have not kept up with inflation.
© 2024 AFP
