THE economic recession in the country has started to manifest one of its most predictable outcomes as it has pushed Nigeria’s ranking on the global Misery Index to a record 49.5 percent. Recent figures from the National Bureau of Statistics (NBS) indicate that Nigeria occupies the fourth position on the index, which shows the misery levels of citizens in different countries of the world. By this position, Nigerians can be said to be fourth in the global ranking of citizens living in misery.
The Misery Index is an indicator of the economic well-being of citizens of a specified economy, computed by taking the sum of inflation, unemployment and lending rates, minus year-on -year(y-o-y) per capita Gross Domestic Product (GDP) growth. A higher ranking on this index indicates a worsening economic climate in any country. Nigeria’s ranking on this index in August, 2016 was 47.7 percent, according to NBS data. With inflation now at all-time high 19 percent, lending rate at about 30 percent, unemployment at 13.9 percent, underemployment at 19 percent and poverty level, 62.6 percent, it is not surprising that it has now spiraled to 49.5 percent.
Globally, any country with a ranking of eight percent and below on the Misery Index is considered to be doing well. Those which rank up to 16 percent are believed to be performing averagely. For instance, in 2015, the country with the highest misery level on the index was Venezuela, at 214.9 percent. It was followed by Ukraine, 82.7; Brazil, 67.8; Argentina, 60.0 and Jamaica, 34.4 percent. Today, Jamaica is trailing Nigeria in fifth position. The countries with the lowest misery rankings are China, Japan, Thailand, Hungary, Netherlands and Germany.
The implications of a high ranking on the Misery Index are foreboding and clearly undesirable. Key, among these implications, is poor living standard of citizens. According to the United Nations Development Programme (UNDP), many Nigerians are living on less than US$1 a day, while poverty, hunger and inflation are making life miserable for them.
The rising inflation, lending rate and unemployment levels that are pushing up Nigeria’s ranking on the Misery Index are not only a threat to the economy, they are also threatening the very existence of the citizens, as well as their ability to contribute to the development of the country and attain their own potentials.
Our rising misery level may well be an alarm bell to government and the relevant agencies to do something urgently to lift the country out of the current economic recession.
We must reiterate that the current high unemployment, inflation and lending rates are ticking time bombs. They require urgent measures to reduce misery in the country. Undoubtedly, the unemployment rate which indicates the number of Nigerians actively looking for jobs as a percentage of the labour force, is alarming. NBS figures show that Nigeria’s unemployment rate rose to 13.9 percent for the 7th straight quarter, from 13.3 percent in the third quarter of 2016. That was the highest level since 2009. Youth unemployment also reached a record high 42.24 percent at the last quarter of 2016. By all standards, this is very worrisome.
The government has clearly not done what is required to check these rising indices and improve the well-being of the people. We cannot come to any conclusion other than this, as its efforts so far have not yielded the desired results. Oftentimes, government’s responses have been more reactive than proactive.
For example, the recent decision of the Federal Executive Council (FEC) to set up an inter-Ministerial task force to consider measures to bring down food prices across the country, even though commendable, is more like a fire brigade approach to arrest a present danger. We are anxious to know how this will reduce the escalating prices of goods and services in the country.
The government has to do more to tame inflation, unemployment, poverty and hunger in the land. The Central Bank of Nigeria (CBN) needs to do much more than it is doing at the moment.
It should come out with far-reaching monetary measures to reflate the economy. It is not in doubt that Nigeria’s macro-economy has been in disequilibrium since the crash of crude oil prices in the international market. But, oil prices are picking up once again, while the Foreign Reserve has increased significantly in recent weeks.
There is need for sound management of resources and effective implementation of policies. Government should also address market contraction due to the decline in consumer purchasing power, the decreasing profitability of many commercial organisations and the collapse of some of them.
This government should deliver on its promise to revamp the economy. It should also increase the delivery of public infrastructure, such as the railways. There is little optimism on the all-important power sector of the economy, which has become a Gordian knot for the government.
It is sad that Nigeria has also lost its global competitiveness at this time that it sorely needs greater investments in the economy. The country is now ranked a lowly 169th out of 189 countries on the Ease of Doing Business index. That is definitely not where a country that wants to attract investments to create jobs and reduce poverty ought to be.