The world has experienced a lot of economic crises in the 21st century, and this has had a negative effect on human relations. I can remember the most recent economic depression we expressed, and many people are yet to recover from the aftermath of the depression. Now we are faced with another economic crisis. Most, if not all, of the countries in the world are currently experiencing some level of inflation. Luckily for some countries, they have been able to formulate policies that have helped cushion the effects of the current inflation.
What is inflation? In a layman's definition, I will say that inflation is the rise in the price of goods and services. Currently, in Nigeria, we are experiencing a rise in the prices of goods and services. It is becoming practically impossible for those in the middle class to purchase the items they need. The proletariat is currently finding it difficult to meet their needs, while the Bourgeois, who own the means of production, are smiling to the bank. The instability in the price of commodities is very disturbing. Recently, the Nigerian government has promised to increase the salaries of its work force, but taking a careful look at this promise, I would say it is just window dressing. The increase in the wages of working-class citizens would still not solve the current inflation crisis we are facing.
I will be looking at the possible causes of inflation in Nigeria.
- Increase in government spending: In recent years, we have seen that in Nigeria there has been an increase in government spending. The Nigerian annual budget is on the increase every year, and most of this budget goes to recurrent expenditure. This is not surprising because, just like in other developing countries, it is expected that the government will spend a lot of money. This therefore leads to the circulation of money in the system, which cannot be accounted for. We have a few people who have purchasing power, and because of this, they can buy goods at an outrageous price. Since the lower class is still buying from the same market, it becomes difficult.
2: Indirect taxes: This is another issue that is causing inflation in Nigeria. Nigeria is both an importing and consuming country. There is little or no production of goods to meet its own needs. The government's import duties are so high, and it is the final consumer that bears the brunt of these government policies. Since the companies cannot run on a loss, they have to increase the prices of their goods to meet the cost of production and distribution.
3: Population growth: The increase in population in Nigeria is at a very alarming rate. This growth in population leads to an increase in demand for goods and services. The owners of the means of production must in turn increase the prices of their in order to meet up with the cost of production. In recent years we have seen the Nigerian government coming up with policies such as family planning to control the increase in child birth. This program seems like a good program but it's not working because of poor implementation. And those living in the rural areas have little or no idea about family manner.
And because of Rural- Urban migration ,the demand for goods and services increases in the Urban centers and this results in the increase of prices of commodities.
Nigeria has experienced so many negative effects of inflation, and I will just mention a few.
Inflation has led to a low standard of living in Nigeria. Most Nigerian citizens cannot meet their basic needs like food, shelter, and clothing. Most Nigerians live from hand to mouth.
There is currently a high rate of job loss in Nigeria. Most companies are laying off their staff or folding up. As there is no purchasing power, it's affecting companies negatively. And in order to save face, most have to do the needful and sack some workers or face extinction.
Most Nigerians cannot have access to quality health care because of how expensive it is. And the public hospitals are merely death traps. Individuals are more concerned about how they will survive, and they don't care about their health. All they want is to be fed. This current situation is leading the country into a serious health crisis.
Insecurity is becoming the order of the day. Young people are turning to crime in order to earn a living. The increase in crime rates is alarming. The most active population is underutilized, and the resulting effect is an increase in crime rates.
Inflation is hitting Nigeria hard. The government has to create an environment where Nigeria will become an exporting country. Industrialization is the key to our problem as a developing country. The government must reduce its recurrent expenditures and invest more in science and technology, education, health, and human capital development.
I sincerely hope the current inflation will not cripple Nigeria completely.
