Hungry men are angry men. Everyone knows that. However, last week’s protests in Niger and Kano states told us that hungry women can be equally angry.
There are fears that if the World Bank’s worst case scenario materialises, Nigeria’s food crisis might assume calamitous proportions. The World Bank contends that hunger would enter severe crisis situation in seven northern states.
The states are Adamawa, Borno, Kaduna, Katsina, Sokoto, Yobe and Zamfara. The bank blames the impending severe hunger crisis in the seven states on persistent insecurity, armed conflict and deteriorating livelihood.
Ironically, I agree with the federal government’s contention that the hunger in Nigeria does not emanate from scarcity of food.
Although Nigeria may not be producing enough food, it is obvious that no one goes to the market to buy food and returns empty handed. Even if a bag of rice now sells for N77, 000 people can obtain the commodity with a flip of the finger as soon as they can fund the purchase.
Consequently, the situation in Nigeria is not like Venezuela where people leave home by 5am in search of rice and might be fortunate if they come back by 8pm with it. The long queues for food in Venezuela is conspicuously absent in Nigeria.
That does not mean that the hunger protests of last week were trumped up. The protests were staged by people who do not know where the next meal would come from. Their problem is not scarcity of food in the markets but excruciating pains inflicted by extreme poverty as inflation prices everything beyond the reach of Nigeria’s 140 million people toiling below poverty line.
The cause of inflation cannot be blamed solely on the three tiers of government in Nigeria. Manufacturers, service providers, wholesalers and retailers are equally guilty of causing inflation in Nigeria.
We have reached the point where the federal government should, as an act of emergency, fight inflation with a measure of price control to protect the poor who have been priced out of the market by inflation. While not dictating prices, government should fix profit margin for goods and services providers.
Stakeholders now monitor the exchange rate of the naira and increase prices as the naira tumbles in the foreign exchange market.
On some frenzied days, commodities prices change twice as the naira plummets in the foreign exchange market.
The incessant price hikes affect even home-made goods because their sellers want to have a piece of the proceeds of profiteering provided by a weak naira.
A six inches block sold for N320 two months ago when the price of a 50kg bag of cement was N5,500. Last week with the price of a bag of cement surging to N6,200 six inches block sold for N500 per unit.
The new price of block smacks of merciless profiteering. With cement price at N6, 200 the cost of street sand for a bag of cement is N5,000 while the block moulder’s fee is N1,000.
That brings the total cost of moulding blocks from one bag of cement to N12,200. The moulder makes 45 blocks from one bag of cement and at the unit price of N500 smiles to the bank with N22, 500, recording a profit margin of almost 100 per cent.
Those who roast plantain at street corners enjoy even wider profit margin. A bunch of plantain with 30 fingers attracts a wholesale price of N3, 000.
The retailer roasts it and sells one finger at N300 and rakes in N9, 000 from something she bought with N3, 000. That amounts to 200 per cent profit.
Even big time manufacturers are deep in profiteering that worsens Nigeria’s inflation rate. Last October, BUA Cement Plc dropped the price of cement to N3,500 per bag in a veiled showdown with Dangote, the industry leader.
Dangote is yet to respond to that even as BUA contends that Dangote makes 300 per cent profit margin from selling cement at N5,500 to consumers.
The major cause of inflation in Nigeria is the depreciating value of the naira in the foreign exchange market but the nation’s yawning infrastructure deficit is another contending factor.
A failed rail system compels Nigerians to haul food items from Nigeria’s inaccessible rural communities through deplorable roads which raises the cost of food items tremendously. Epileptic power supply has its own contribution.
The federal government cannot solve those problems with a flip of the finger, but it can address the forex supply deficit that conjures the naira’s disorderly retreat in the foreign exchange market.
If government arrests and prosecutes those stealing 450, 000 barrels of crude oil daily, it will boost foreign exchange supply in the market by $1.2 billion monthly.
That would drastically reduce the supply deficit that plummet the exchange rate of the naira and fuels inflation on daily basis.
Besides, the Central Bank of Nigeria can reduce speculative biddings by compelling banks to account for all the foreign exchange sold to them.
Anyone found to buy foreign exchange without using it for the purpose it was meant should be made to forfeit the money to the federal government while he is prosecuted and sent to jail.
Nigeria’s economic situation requires hard decisions. Government must strip the immunity of the big time criminals embarking on round-tripping of forex obtained through foul means.
Government must temporarily suspend its unmitigated free market theory that allegedly fixes prices through inter-play of market forces of demand and supply.
Nigerian entrepreneurs are too greedy to be trusted with price fixing. Government must intervene. It should prescribe the profit margin for businesses and ensure that prices are only hiked when there is sufficient increase in production cost.
Government must review Nigeria’s skewed income distribution system which allows members of the National Assembly to collect salaries higher than that of the president of the United States of America.