To a large extent, the year 2024 was one of visible economic hardship in Nigeria.
Undoubtedly too,the same year, ,majority of Nigerians witnessed as their living standards plummeted to ignoble and pitiable levels.
It was truly a year of visible economic deprivation and hunger, occasioned by the two major policies of the President Bola Ahmed Tinubu-led administration: Removal of oil subsidy and the unification of the foreign exchange market.
The two policies also triggered remarkable negative multiplier effects on the nation’s economy in terms of depreciating value of the Naira,price hike, inflation, low productivity, unemployment, poor power supply/ high electricity tarrif ,high cost of living, among others.
Also, the issue of insecurity across the country,especially in the Northern parts of Nigeria,took the shine off 2024.
It need be affirmed that, barely a month after President Ahmed Bola Tinubu was sworn in on May 29,2023, Nigeria’s inflation rate rose sharply from 22.41% to 31.70% by February 2024, marking the highest rise ever experienced in nine months since 1999.
More worrisome,as at November 2024, the same inflation peaked to 34.6%, with food inflation alone hitting 39.93%, worsening the cost-of-living crisis in the country.
This unbearable situation made living costs high and led to ceaseless upward price review of goods and services across all sectors of the economy.
Even the Central Bank of Nigeria (CBN) did not help matters, as it raised interest rate about six times in 2024,all in a bid to stabilise the economy in the face of naira devaluation and rising fuel costs.
With increased CBN interest rates,the cost of doing business and production skyrocketed .Many businesses had to source for funds under high interest rates by banks and other lending organisations.
Power Supply
Last year,low and inadequate electricity generation and distribution led to high cost of production,as factories and companies generated their own electricity,leading to high costs of goods and services.
Nigeria’s power supply in the last quarters of 2024 from its 23 power generating plants connected to national grid ,with their total capacity of 11,165.4MWs hovered around 4,433.71 and 4,194.20MWs
Fuel pricing
Again, the issue of fuel pricing in the country has remained a major problem even with the emergence of Dangote Refinery. In May 2023, petrol prices rose ; initially priced at ₦195 per litre, prices rose to ₦540 in June and ₦617 in July. By September 2023, prices changed between ₦626.21 and ₦671.86 by December. In May 2024, petrol prices soared between ₦1,200 to ₦1,500 on the black market.
As of late December 2024, the Dangote Refinery reduced its petrol price to ₦899.50 per litre, leading to competitive pricing among marketers. However, there are fears that the December 2024 fuel price slash may be short-lived considering the ongoing hard economic situations
Even ,many Nigerians are not deceived by the recent disclosure that the Port-Harcourt and Warri refineries are back on stream.
Likewise, many stakeholders in the oil and gas sector still believe that the revival of these hitherto moribund refineries may not translate into increased fuel production given the often exaggerated production capacities of those facilities.
Therefore ,the bottom line is that as long as Nigeria can’t produce enough fuel for local consumption, the price of the product will continue to go higher.
Security challenges
Insecurity remains rampant with multiple incidents reported; including kidnappings and attacks by insurgents. The World Food Programme also reports that conflict has displaced many people, escalating food insecurity and malnutrition.
The hunger situation led to nationwide protests from August 1-10, 2024
The widespread protests were against rising living costs and government corruption, organised under the #EndBadGovernance banner. Demonstrations occurred in major cities including Abuja, Lagos, Kano, Benin City, Gombe, and Jos. Various pro-democracy groups championed the protests.The protests voiced frustrations over issues such as insecurity, food shortages, and poor governance while demanding the reinstatement of fuel subsidies and wider reforms.
Apparently in its bid to rijig,the Federal Government in the last two months initiated
Tax Reform Bill which has become thorny and controversial issue in the polity.
Nigerians Speak
According to Dayo Olusanya, a building materials dealer in Ogunpa market in Ibadan, he had one goal—to give his children a better life than he had. Olusanya, in his early 40s, wakes up every morning with a dream that seems farther from reality with each passing day.
He continues:”For years, l poured my energy into building this business, hoping a better life would come.
But in 2024, that dream began to crumble under the weight of skyrocketing fuel prices and restrictive government policies.
“I wanted to give my kids a better life,” he said with a weary voice. “But now, I’m just trying to survive each day: when we heard at the beginning of this year that fuel prices increased, this year’s challenge is higher than I have ever witnessed.
“This was not how the shop was some years back, it’s big, well stocked with goodies, but blame fuel prices because I buy goods from Lagos, and transportation costs have increased daily. I had no choice but to raise the prices of my goods, but customers complained.”
Despite Olusanya’s rough 2024, he expressed optimism that 2025 will get better.
He echoes:“I hope fuel prices will be reduced and reforms are implemented, because a bunch of keys that cost N4,500–N5,000 before now costs N10,000 or more.”
Like Olusanya, many small business owners are struggling to survive in an economy that seems to be failing them. As they plead for government intervention in 2025, hope for a brighter future dwindles.
Mudinat Akintunde, an electronics seller since 1999, shares her story. “pray we don’t experience such hardship again,’ she lamented, describing how the prices of items like extension boxes and fans have doubled or even tripled.”
In the same vein, Aderemi Joshua, a bed seller, lamented the rising costs of factory goods. “A bed that used to cost ₦14,000 now costs ₦20,000,” he said, highlighting the significant price increase. “Taxes, fuel prices, and customs fees have severely impacted my business.”
He also recalled the more prosperous times under President Goodluck Jonathan -led administration, stating, “during that era, I consistently turned a profit. Now, customers struggle to afford even essential items.”
Joshua Gabriel, a meat seller in Port Harcourt, and father of four, described 2024 as a year of survival. “If not for God, my business would have collapsed,” he said,
He adds:”The price of a healthy cow has nearly doubled from N700,000 in January 2024 to over N1.2 million or N1.3 million, recalling the loss he has incurred in his business as a butcher.
Struggling to cover cooling room fees, he avoids customers who delay payments, describing them as “business killers.”
“Just imagine sending 20kg of cow meat to a cool room, it is a very big problem for me. The cool room charges N300 for 1kg, how will I be able to pay? Because I will be running at a lost.”
Amarachi Clement, a trader who lives in a Port- Harcourt suburb ,
sells chemical soap, spoke about the implication of the unstable dollar exchange rate to her business. “Chemicals sold for as low as N1,500 last year now sell for N3,000 or more,” she revealed.
To retain her customers, she adds bonuses like extra fragrance but admits the burden of high vendor prices causes mental stress.
Which way forward for Nigeria in 2025?
As Nigerians step into 2025 , the tax reform bill will dominate debates and discourses in both the corporate and private circles.
Many argue that the tax reform bill is ill timed given the fact that agricultural and industrial reforms ought to be front burner.
According to a report by Prime Business Africa:”The proposed tax reforms aim to overhaul the existing tax system by doing away with outdated laws and introducing new measures to boost revenue collection. Key features include a gradual increase in Value Added Tax (VAT) rates and a reduction in corporate income tax for medium and large companies.”
Meanwhile, the Northern Governors forum,the Nigeria Labour Congress (NLC) and other corporate bodies have unequivocally rejected the bill.
However, many other notable professional bodies like NBA,corporate organisations and scholars have urged caution and dialogue over the passing of the bill into law.
However, Federal Government officials,including ministers,the ruling APC bigwigs , have been canvassing support for the tax reforms bill,echoing that it remains the magic wand taxation policy that will Nigeria to its enviable financial independence.
However, while tax reform is essential for improving fiscal stability, does it address the pressing needs of the agricultural and industrial sectors, crucial for economic growth and job creation?
Also, Nigeria’s current debt to the World Bank stands at about $17.1 billion, having risen from $16.5 billion in June 2024; a rise reflecting a $600 million increase over three months.
Moreover, according to a recent data, Nigeria owes about $1.6 billion to the IMF
Amid the lingering crisis of rising inflation,food insecurity,low productivity, Naira devaluation value,poverty ,hunger and government debt overhang ,will Nigeria fare better in 2025?
Will President Tinubu demonstrate a clear vision and will to govern more effectively and assuage the pains and agonies of Nigerians brought to their knees by the hard economic realities of today?
Will the President continue to plunder to dictates of the IMF & World Bank at the detriment of the increasingly traumatized average Nigerian.
While Tinubu has introduced initiatives such as the shortage fuel subsidies and now proposing tax reforms, there are rising fears and doubts if these measures will adequately address Nigeria’s manor economic challenges.
Major sectors of the economy also need higher investment and policy support to boost and sustain productivity.
It needs be noted that with corresponding reforms in agriculture and industry, there are fears that the tax reforms may heighten present economic challenges rather than being the needed elixir for Nigeria’s teething issues.
From the foregoing,Nigerians are full of expectations for 2025 ,believing that Tinubu will lighten their economic burden by initiating citizens-friendly policies and programmes.
