EDITORIAL: ‘Shrinkflation’ At A Time Of Discontent

Our cover story last week vividly portrays a season of discontent. 

Like the unified response to the “Austerity Measures” of 1962, the absence of a unified national response to the current crisis is disturbing. More is needed to find cohesion in a national response to the crisis.  

The contradictions are clear. The All Progressives Congress came in with a commitment to build a “Social Market Economy.” On the contrary, what we see now looks like a Structural Adjustment Program Part 2 with the Washington Consensus calling the short. A social market is based on macroeconomic stability as the foundation for shared prosperity and sustainable development.  This is a preferable route and the government should go back to its original manifesto commitment which was based on the Social Market Modem. 

The IMF-inspired attachment on the social responsibility of the states is a cause for alarm. We are now told for example, that even “Subsidy” for electricity consumption is unacceptable. This is an ill-advised position to take in a country with the world’s largest population of poor people. The IMF opportunistically disregards the one billion dollars a day subsidy of food prices in the European Union (EU) through Common Agricultural Policy (CAP). This country does not have buffers and the social cohesion to contain the fallout of ill-advised Washington consensus policies. This is why they would take seriously before forebodings of eminent patriots like the Emir of Kano, Emir of Sokoto, and civil society. 

Nigeria must face it economic crisis by focusing on production and involving itself in export oriented economy to contain the currency crisis. They will have to be devolution of fiscal instrument to the states within the spirit of a genuine federalism. We have seen this work in India which is now the 5th largest economy in the world and Brazil which worth 7th largest economy in the world. We should look at their model of success and stop Aping a discredited structural adjustment program in a guise!