Cost of living protests spread to Nigeria

Partly inspired by their counterparts in Kenya, young people in Nigeria have taken to the streets in droves to protest against economic policies they blame for worsening standards of living in the West African country.

Just weeks after deadly protests over President William Ruto’s tax plans rocked Kenya, protests started in Abuja, Lagos, and other major cities across Nigeria, with grievances centred on President Bola Tinubu’s package of economic reforms. Since taking office in March last year, Tinubu has sought to liberalise the West African economy by halting central bank interventions in the foreign exchange market.

During his presidential inauguration speech, Tinubu scrapped a long-standing but very expensive government fuel subsidy, which caused prices to rise immediately. Halting this subsidy also helped send other commodity prices higher, as well as those of other essential goods such as food.

Painful impact of reforms

While some economists believe these moves to be an essential part of moving Nigeria away from decades of weak economic growth and mismanagement, they have also had painful impacts on Nigerians, at least in the short-term. For one, the value of the Nigerian naira has collapsed against the dollar, which has appreciated by almost 80% since the start of the year alone.

This has helped fuel rampant inflation by making imported essential goods significantly more expensive in local terms. Prices are currently rising in Nigeria at a rate of 34%. Especially as this has come at the same time as subsidies have ended, and when unemployment is high, many Nigerians have felt the economic pain.

The protests in Kenya and Nigeria are likely to have negative macroeconomic repercussions, particularly if they force the countries’ government to drop their liberalisation measures. David Omojomolo, Africa economist at Capital Economics, saysthat “the common theme of a weak economic backdrop, endemic corruption, and fiscal fears means the region is ripe for further unrest.”

“Growth is likely to see a limited impact if disruption is short lived. But the legacy for countries’ public finances could be more negative and worsen medium-term sovereign default concerns.”

Protest crackdown

Nigerian law enforcement has cracked down hard on the protests, some of which have involved the raising of the Russian flag, mimicking similar anti-West demonsrations France’s former West African colonies last year. This has been read by some as a symbol of discontent with Western-dominated organisations such as the International Monetary Fund (IMF) and World Bank, which tend to insist on economic liberalisation programmes like Tinubu’s as a condition for financial support.

The Nigerian defence chief General Christopher Musa has said that “we will not relent in pursuing those that have continued to encourage unconstitutional takeover or subversion or those ones that are into vandalism or destruction of lives and property.” The human rights group Amnesty International has said that at least 13 protestors have been killed by Nigeria’s security forces.

Tinubu has pledged to address the concerns of protestors but has yet to offer any details on what policies this may involve. In a televised address on Sunday, the Nigerian president said “my dear Nigerians, especially our youth, I have heard you loud and clear. I understand the pain and frustration that drives these protests, and I want to assure you that our government is committed to listening and addressing the concerns of our citizens.”

Tinubu has previously insisted that his economic programme is in Nigeria’s best long-term interests, even if it entails short-term pain. However, it remains to be seen whether this position will remain politically feasible amidst rising discontent.