The President Bola Tinubu-led administration without a doubt hit the ground running in rolling out economic policies after the President’s inauguration on May 29, 2023.
From the unprecedented removal of the fuel subsidy to the Central Bank’s attempt to unify the foreign exchange rate, President Tinubu has shown a firm determination throughout the year that his administration will play by a different set of rules when it comes to economic decisions.
in this article, TheWitness explored some economic policies enacted by the administration in 2023 and their effects on the spending of Nigerians during the holiday.
Despite the surging rise in the cost of transportation during the holiday season due to the high inflationary rate as well as the removal of fuel subsidies, Nigerians will breathe a breath of relief this holiday as President Bola Tinubu approved the 50% slash in public transport fare for those traveling for the holiday.
The president made this announcement on December 21, 2023. He added that the rebate will be applicable till January 4, 2024.
The president also approved the zero cost on all train services in the country for the holiday season.
The discount on public transport will enable travelers to cut expenses on their Christmas spending as many of them would be visiting their families and loved ones for the holiday in different parts of the country.
In addition, the slash will also ease the cost of logistics as many would be moving goods from one place to another in the country, thus reducing the prices of these goods.
Meanwhile, the rebate, which is to end on the 4th of January 2024, does not address the core challenge of the rising cost of living, mainly inflation and food inflation. Hence, while the relief is a welcome initiative, Nigerians will still spend more on food items this holiday than any other holiday in the country’s history.
One of the most controversial and landmark economic policies made by President Tinubu is the attempt to float the naira against the dollar at the foreign exchange market.
The decision to float the Naira was based on the anticipation that doing so would diminish the premium (discrepancy) existing between the official market and the parallel market.
As a result, the naira was devalued by nearly 40% against the greenback since the announcement in June.
The floating of the naira has had a huge impact on the economy, particularly inflation. The headline inflation stands at 28.28%, which means Nigerians will pay more for certain commodities for the holiday.
Moreover, food inflation, currently at 32.1%, also adds to the pressure on the purchasing power of the masses. According to an analysis by TheWitness, Nigerians battle the most expensive Christmas as food and drinks cost 92.73% more in three years.
The removal of the fuel subsidy topped the list of President Bola Tinubu’s economic policy of 2023.
Dramatically, the President announced the removal of the age-long fuel subsidy, increasing the pump price of fuel by over 152% according to NBS.
Impacts
fuel subsidy removal bites harder during this festive period as the cost of transportation, staple food items, clothing, and other goods skyrocket to a record high.
With the removal of fuel subsidies, there has been a significant increase in the cost of transport. Data from the NBS shows an annual increase of 27.02% in November 2023.
In addition, the policy will also hurt small business owners who power their businesses with PMS, resulting in an additional cost for goods and services for the holiday.
Residing in Nigeria has become increasingly difficult, with the costs of essential goods reaching unprecedented heights. The abrupt removal of fuel subsidies and the decision to float the naira has led to a substantial spike in food prices. This surge in food costs is posing a significant challenge for individuals and families in this holiday season.
Nigerian households are cutting down on purchases and forgoing traditions as food prices keep rising relentlessly.
With headline inflation rising to 28.2%, many households are expected to spend a huge chunk of their hard earnings on purchasing food items to celebrate Christmas with their families.
