Like A Rocket, Inflation Rate In Nigeria Is Zooming To The Moon

From what has been manifesting since the second half of 2015 in Nigeria, the Buharinomics does not appear to be offering a better treatment for the popular Nigerian people, all cadres of workers inclusive, no socially conscious investing, and fair competition even among the federating units. Rather, it is busy propelling rocket-like inflation all over.

A supposedly progressive democrat was expected to engineer a humane economy for the Nigerian people in line with his vociferous Change mantra. Sadly, the face of the supposed democrat the citizenry are seeing today is that of an emerging totalitarian.

However, human dignity is affirmed in a humane economy, and that can only be achieved by a genuine synthesis of economic truth and moral truth. The seeming Fulanisation cum Islamic sentiments cannot replace real principles of economics, nor can such principles be autocratically applied to non-economic aspects of human life. Without a doubt, the Buhari administration needs an economic and moral theory that is useful to both economists and moral scholars if tangible progress is to be made before 2023.

In the meantime, a rocket, according to Wikipedia, is a missilespacecraftaircraft or other vehicles that obtains thrust from a rocket engine. Rocket engine exhaust is formed entirely from the propellant carried within the rocket. Rocket engines work by action and reaction and push rockets forward simply by expelling their exhaust in the opposite direction at high speed and can, therefore, work in the vacuum of space.

In fact, like the Buharinomics, rockets work more efficiently in space than in an atmosphere. So far, the choking Buharinomics has not left the masses with any escape velocity. As was rightly pointed out by the Labour and Employment Minister, Chris Ngige, social programmes of the Buhari administration do not appear to be yielding any tangible results.

Ngige said various government social intervention programmes targeted at reducing youth unemployment and eradicating poverty have been implemented by different administrations since Nigeria gained independence. He also said available records showed that from 1972 to date, about 14 different programmes have been implemented, adding that these programmes included the National Accelerated Food Production Programme (NAFPP), implemented between 1972 and 1973.

While the minister said others were the current National Social Investment Programme (NSIP) which has been ongoing since 2017, embedded in the National Economic Recovery and Growth Plan (ERGP) 2017-2020, he noted that yet, the unemployment rate and poverty levels are on steady paths of growth, indicating high resilience against the intervention efforts.

Ngige who spoke while declaring open a two-day workshop on Breaking the Resilience of High Unemployment Rate in the Country in Abuja, the country’s capital, last May said that the incessant increase of unemployment in the country was alarming. According to him, the high unemployment rate of 23.1 percent, and underemployment of 16.6 percent by the National Bureau Statistics (NBS) of 2019 report was alarming, pointing out, ‘’it is a worrisome status as the global poverty capital (World Bank, 2018); and concomitant high prevalence rate of crimes and criminality, including mass murders, insurgency, militancy, armed robbery, kidnappings, and drug abuse, among others.

Adding, he said, ‘’as if this situation is not scary enough, it is projected that the unemployment rate for this country will reach 33.5 percent by 2020, with consequences that are better imagined, if the trend is not urgently reversed. It is a thing of joy to note that Nigeria has not been resting on her oars over the years in terms of dedicated efforts to curb the unemployment problem.’’

Ngige’s lamentation clearly shows that the economics of the managers of Nigeria is not humane. Dr. Gregory M. A. Gronbacher, writing on The Humane Economy for Acton Institute, a think-tank whose mission is to promote a free and virtuous society characterized by individual liberty and sustained by religious principles, said the essential characteristics of a humane economy are not many, but that each is an important facet in the pursuit for economic justice. While he argued that not each of the following characteristics is equally as important, none of them can be neglected without great peril to economic liberty, and human dignity.

*The necessity of private property. Accurate reflection on human nature yields an insight into the capacity for ownership. The ancient Jews, Aristotle, Muslim theologians, the writers of the Christian Scriptures, the Scholastics, and the papal authors of Catholic social teaching have shared this insight. Human nature requires private ownership for the successful navigation of the material world, for the care of family members and the weak, and the acquisition of virtue through the generosity and good stewardship. The corresponding duties that accompany this right include the call to generosity, the requirement of good stewardship, and the vocation of productivity and creativity.

*The foundation of human capital. Each human individual is created in the image and likeness of God. Each human individual is called to a vocation that mirrors that of the Creator through sharing in creative activity. Human capital is an essential economic resource. Human ingenuity, intelligence, labor, and virtue are the fundamental capital available to humanity. This capital must be developed, nurtured, and protected. Education, humane working conditions, just wages, and moral instruction are all essential aspects of supporting human capital. The recognition of human capital coincides with the recognition of the centrality of the human person. Indeed, the economic system exists for the benefit of humanity, not humanity to serve the economic system.

*Maximisation of market participation. The human person is social by nature. Self-sufficiency is a myth. In order to flourish, individuals need one another. Cut off from family life, voluntary associations, friends, and other social manifestations, the human person becomes vulnerable, lonely, isolated, stunted, and eventually succumbs to one threat or another. The social order provides the context for safety, meaning, and flourishing for the human person.

The economic order reflects this social reality. Cooperation, mutual assistance, and service to others are the hallmarks of a free economy. In order for nearly all to benefit from the great abundance of a free market, there must be nearly full participation in the market. This requires that all barriers to market participation be removed. Barriers such as racism, sexism, and ageism must be eliminated. Those who do not possess sufficient material capital for market entry must be aided, preferably by private charitable means to obtain the goods necessary for full participation. Education must be effective and available to all so that skills can be accumulated for market participation.

To be marginalized from market participation is to be cut-off from the benefits of the productive sector. The result of being removed from the productive sector is poverty in one form or another. Human dignity insists that human capital be allowed every opportunity to participate in the market so that a modicum of self-sufficiency can be maintained and a genuine sense of self-determination can be exercised.

*Ample provision for the needy and marginalized. A free economy that is also humane would require a radical commitment to the care of the poor. This care should be comprehensive so that all human need is met to the highest degree possible. This would require the generosity of all in terms not only of money, but also time, love, and talent. The poor require much more than material assistance. They also require personal support, education, love, and other personal and spiritual efforts.

As demonstrated above, the poor are best cared for when a free market is left relatively unhampered to produce excess wealth that can be distributed to those in need through effective private means. An economy is only humane to the degree that it aids those who are marginalized, both through their own faults, and no faults of their own.

*Prudent intervention through the proper application of subsidiarity. Striving for a social order that is decentralized will most likely insure a society of thriving social institutions, including a healthy and humane market. This requires that we first abandon our mechanistic views of the market and allow individuals to creatively engage in free economic associations and relationships. Government intervention must be limited and we must stop seeking governmental solutions to moral, spiritual, and economic problems.

In the meantime, data from the country’s statistics bureau, the NBS, reveal that Nigeria’s inflation rate rose year on year to 11.85% last November, the highest rise since April 2018. Before the November rate, NBS had reported that the country’s consumer price index, which measures inflation rose to 11.61% its highest in 17 months, as core inflation drops marginally last October.

According to the NBS report, inflation rose by 0.37% points, higher than the 11.24% recorded in September and 11.02% for August 2019. Similarly, food inflation rose to 14.09% compared to 13.51% in the previous month. Meanwhile, Core inflation dropped to 8.88% from 8.94% recorded in September 2019.

In October of this outgoing year, food inflation rose to 14.09% from 13.51% recorded in the previous month. The average change of the food sub-index over the 12 months average was 13.54%, which was 0.07% higher than the average annual rate of change (13.47%) recorded in September 2019. According to the Bureau, the rise in the food index was caused by increases in prices of Meat, Oils, and fats, Bread and cereals, Potatoes, yam, and other tubers, Fish and Vegetables
On a month-on-month basis, the food sub-index increased by 1.33% in October 2019, up by 0.03% points from 1.30% recorded in September 2019.

Nigeria’s core inflation, which proxies all items less farm produce, stood at 8.88% in October 2019 as against 8.94% in the previous month. On a month-on-month basis, the core inflation sub-index in October increased -0.15% points slower than the rate recorded in September 2019 0.89% Details provided by the NBS showed that the highest increases were recorded in prices of Cleaning, Repair and hire of clothing, Hospital services, Major household appliances, Repair of household appliance, Glassware, tableware, and household utensils, and Garments.

While the report showed that the urban inflation rate increased by 12.20% (year-on-year) in October 2019 from 11.78% recorded in September, while the rural inflation rate increased by 11.07% in October 2019 from 10.77% in September 2019, on a month-on-month basis, the urban index rose by 1.15% in October 2019, up by 0.02 from 1.13% recorded in September 2019, while the rural index also rose by 0.99% in October 2019, up by 0.03 from the rate recorded in September 2019 0.96%.

The latest inflation report implies a fast rise in the prices of overall goods and services in the economy. The report showed that Nigeria’s inflation rose to 17 months high, the fastest growth since May 2018. Basically, the country’s inflation rate which had slowed down to its lowest in over three years as of August (11.02%) snowballed to 11.61% in October 2019.

Analysts say the increase in the inflation rate may hugely be attributed to the consequences of the sustained closure of the country’s border since August. Thus, the rise in inflation tends to suggest that the closure of the land borders is now significantly reflecting on commodity prices. Since the border closure, it has been reported that prices of food items like rice, frozen chicken, tomatoes and other food items had rapidly increased.

Arguably, the rise in inflation may not necessarily come as a surprise as prices are expected to rise further due to the recent policy measures of the Buharinomics. Abuja has repeatedly pointed out that it will not be reversing its stand on the closure of the border until the neighboring countries comply with standards of cross border movement of goods. By implication, the latest rise in the inflation rate means the purchasing power of consumers to buy goods and services deteriorated. For economists, it is, the ability of consumers to buy the same quantity of goods with a fixed income level has worsened within the period.

NBS says increases were recorded in all subsets of the consumer price indexes as the effects of the border closure continue to bite hard on the economy. A closely watched component of the inflation index rose by 14.48% in the month under review compared to 14.09% in October 2019. This rise in the food index was caused by increases in prices of Bread, Cereals, Oils and fats, Meat, Potatoes, yam and other tubers, and Fish.

Food inflation rose by 1.25 percent in November 2019, down by 0.08 percent points from 1.33 percent recorded in October 2019. The ”All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce also rose 8.99% in November 2019, up by 0.11% when compared with 8.88 percent recorded in October 2019. On a month-on-month basis, the core sub-index increased by 0.79 percent in November 2019.

Inflation for the month of November was also driven by increases in prices of Cleaning, Repair and hire of clothing, hospital services, hairdressing saloons, and personal grooming establishment, Glassware, tableware, and household utensils, vehicle spare parts, Repair and hire of footwear, Shoes and other footwear, Clothing materials, other articles of clothing and clothing accessories, Medical services and Passenger transport by air.

For now, as the citizenry continues to grapple with the effects of the border closure, the Christmas holiday is also piling pressure on the prices of essential goods and services. Nigerians typically spend the most towards the end of the year particularly on household items such as food, fashion and gift items.

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