The last figures I saw, inflation, especially food inflation, was inching close to the 40% mark and other headline inflation was averaging out in their late 30s
I’m wondering why nobody is talking about recession. Things weren’t this bad during Buhari’s time when we gleefully announced that we had gone into a recession.
The economy today is flat. The main economic drivers—fuel price and forex—seem to have developed a life of their own, galloping away in malthusian proportions
Government spending upending with a recent trend of non-elective people but with filial ties to government donating huge sums show casing the profligacy that seems to be fueling government spending.
But tarry, this situation has thrown up little-seen or little-considered tiny devils
Replacement costs and fear. They drive each other interchangeably.
Lack of government sincerity and coherence has led to a lack of confidence in its ability to tackle the issues at all level of economic activities, such that fear of the replacement cost has taken over
The weakening of discipline has led to even the tiniest of players marking up their prices beyond market forces level to ensure they are not stranded at the point of replacement or that they would also be able to afford other goods and services.
I give you three examples at the micro level.
I needed to change my frames and I took two to the opticians at the military hospital and one to an independent on the streets.
Average pricing for this service pre – Tinubu should be N1, 000 or less but the opticians took N12, 000 for two and the road side took N25, 000 for one.
Do you see the fear playing there?
Batteries for my car keys went bad and I called the technician at the dealership and he said, Oh, go to the nearest supermarket and buy it; its N2, 000 and I said, Oh, I dont have the time help me and he did and charged me N25, 000, citing transportation cost and the need to sync it in their’machine.”
My inverter went off as a result of overload and the fuse went. I know the fuse cannot be more than N5, 000 but i got charged N35, 000
What am I saying in all these? The over 40% inflationary rate can be discounted by as much as 20% if you factor in this psychological factor
Out of fear, prices are adjusted to ensure staying power and affordability of other goods and services, which in themselves are galloping.
This is as a result of the loss of confidence in the government, which during its honeymoon period and afterwards threw up a littany of inconsistent policies that sent a signal of incapacity in handling the economy and governance, hence the loss of confidence and inherent indiscipline that has affected prices of goods and services.
I think Government should quickly erase the obvious involvement of interests in policy formulation, especially in policies that affect the main economic drivers—fuel and forex
A transparent regiment would bring back the stability that we need to strengthen planning and discipline.
This is very key if we need to bring back sanity to the economic space.
government must drive the sanity but then again, the question hanging in the air is, does it have the political will and embedded capacity to push for this?
Let me just keep quiet
Duke of Shomolu
