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Economic and business analyst Abiola Adekunle has said Nigeria’s increased revenue from economic reforms has yet to translate into improved living standards for the average citizen.
Adekunle, during an interview on News Central’s Business Edge on Thursday, said the naira’s depreciation and the removal of petrol subsidies have placed a heavier burden on Nigerians, especially because of the country’s dependence on imports.
The analyst noted that the removal of the petrol subsidy and the floating of the naira were separate policy decisions whose combined effects increased pressure on households.
“Removing the subsidy on PMS was a different thing altogether from the floating of the Naira. So these are two issues, separate issues,” he said.
“And when you see these two issues, you understand that the effect on the people was kind of doubled,” he added.
‘Populace Paid The Brunt’
According to the analyst, Nigeria’s dependence on imports meant that naira depreciation significantly increased the cost of goods and services.
“First of all, you have to understand that Nigeria is a highly import-driven economy,” he said.
“Up till now, we still import more than we export when we talk about what we actually use day to day.”
He illustrated the impact with an imported product that previously cost N80,000 when priced at $200.
He acknowledged that the government had attempted to introduce measures to cushion the effects of the reforms.
“What the government now does is for them to go around and bring about cushion effects,” he said.
However, he questioned whether the reported revenue gains from the reforms should be described as direct savings.
He argued that naira depreciation itself should not be regarded as a source of savings because the government also has increased naira obligations when servicing foreign-denominated liabilities.
“And the reason is because you have external payments to also make. So while you are getting a lot of funds, a lot of Naira coming in from the depreciation of the Naira, you are also going to spend a lot of Naira in paying for external debts, for example,” he added.
‘Revenue Gains Are Not Direct Savings’
Adekunle explained that higher government revenue should ultimately be reflected in tangible improvements in public services and living conditions.
“Because at the end of the day, revenue gains are not equal to direct savings,” he said.
He pointed to infrastructure as an area where Nigerians should see the impact of increased government revenue.
Adekunle said the responsibility for translating increased allocations into better living conditions should not rest with the national government alone.
“Because if you look at what the local government and the state government actually got, it’s more than what the federal government got in the distribution.”
‘Where Exactly Is The Effect?’
He further questioned whether the increased government revenue had produced measurable improvements in the lives of ordinary Nigerians.
“So if you say the country is making more money, OK, where exactly is the effect?” he asked.
He urged policymakers to assess the reforms by looking beyond government revenue figures and examining changes in citizens’ everyday experiences.
“So the government’s saving, the government making more revenue, they’re fantastic. These are good stuff,” he said.
“But at the end of the day, we are yet to see the effect on the average quality of living of an average Nigerian,” he added.
