Cost of living: More Nigerians joining Japa train as hardship worsens
Since President Bola Tinubu affirmed the removal of fuel subsidy, the price of petrol has risen from less than N200 per litre to almost N500. Also, since the CBN adopted a more market-friendly foreign exchange regime, the naira has lost about 40 per cent of its value, falling from about N463/dollar to N750/dollar.
The increase in the price of petrol has boomeranged into an increase in the cost of food, other goods and services. Since Nigeria is an import-dependent country, the devaluation of the naira has led to further hardship for many Nigerians.
The World Bank has disclosed that 7.1 million Nigerians would become poor because of the removal of subsidy if the government doesn’t provide palliative.
According to the bank, this would take the total number of poor Nigerians in the country to 100.9 million. It noted that many households would lose N5,7000 per month from their income.
World Bank said, “Petrol prices appear to have almost tripled following the subsidy removal. The poor and economically insecure households, who directly purchase and use petrol as well as those that indirectly consume petrol, are adversely affected by the price increase.”
It added, “Among the poor and economically insecure, 38 percent own a motorcycle and 23 percent own a generator that depends on petrol. Many more use petrol-dependent transportation. The poor and economically insecure households will face an equivalent income loss of N5,700 per month, and without compensation, an additional 7.1 million people will be pushed into poverty.”
The hardships have fuelled a situation where more Nigerians are planning to leave in 2023 and beyond as inflation rose to 22.41 per cent as of May 2023, a 17-year high.
This is coming as purchasing power decreases, and a cloud of uncertainty hovers over the Nigerian economy.
Studies reveal
A recent survey by the Africa Polling Institute revealed that 69 per cent of Nigerians would relocate if given the opportunity. A 2023 report by Phillips Consulting disclosed that over 52 per cent of professionals in Nigeria are contemplating leaving their current jobs for opportunities overseas within the next year.
It stated that this is due to market uncertainty, inflation, digitisation acceleration, changes in consumer behaviour, increased operational expenses, and complexity.
According to SAP research, 80 per cent of Nigerian companies expect to experience a skills gap in the next year. Rising unemployment, which is predicted to hit 40.6 per cent in 2023 according to KPMG will be a large contributor to this.
Medical professionals leave
The President of the National Association of Nigeria Nurses and Midwives, Michael Nnachi, recently told The PUNCH that over 57,000 nurses migrated from Nigeria between 2017 to 2022. He added, “Check the statistics of the Nigerian Medical Association and see how many doctors have left in the last two years.”
Banking sector suffers
Every sector of the economy has been hit by the Japa wave, and one of the most glaring effects of this wave has been the increasing number of failed electronic transactions in the banking sector. A massive brain drain in this industry, particularly in IT departments, has frustrated the digital plans of many banks.
A Bloomberg report, quoted the Chief Executive Officer of Sterling Bank Plc, Abubakar Suleiman, “So many of our very experienced talents especially in the area of software engineering are either leaving the industry or leaving the country.”
An IT professional in one of the tier-one banks confirmed to The PUNCH that banks are losing their best hands to the Japa movement.
He said, “People just want to leave because of the economic situation of the country, The banks are trying in terms of increasing salaries to keep staff. Basically, every September and January, we have people leaving in droves. Last January, my department, the technology unit, lost about 20 of our best hands. It is much.”
Recently, the Country Manager of Tek Experts Nigeria, Olugbolahan Olusanya, disclosed that many banks are now relying on outsourcing talents to fulfill their IT needs.
The Co-founder and Chief Operating Officer of truQ, Foluso Ojo, noted that it is easier for tech talents to get global opportunities than others.
She told The PUNCH, “Since the inception of the Japa boom, it is easier for tech talents to get global opportunities than any other skill set.”
She added, “The tech sector is not left out of the negative impact of people leaving, what we really need to do is create opportunities for more people to be able to learn, create more STEM courses for people to learn.”
She explained that the people leaving are also contributing to remittances and improving the country in their way.
Experts react
According to an economist at the Olabisi Onabanjo University, Prof. Sheriffdeen Tella, the purchasing power of the average Nigerian household has been negatively impacted by the recent economic reforms because no buffers have been provided to mitigate the consequences of the decisions.
“They should start thinking of what to do immediately and in the long run. If we say the government should start giving people more money, if there is no production, the money will worsen inflation.
“We pay a lot of taxes in this country. I don’t believe that the government should be looking for ways to tax the common people now. It is not the proper thing to do.”
He warned that if deliberate and intentional efforts are not taken to address the economic hardship in the country, more Nigerians would be motivated to seek greener pastures outside the shores of the country.
On his part, the Head of Economics Department at the Pan-Atlantic University, Lagos, associate Professor Olalekan Aworinde, noted that while the recent economic reforms of the government have been a necessary evil that could benefit the economy in the long run, measures ought to have been put in place to contain the hardship that would follow in the immediate aftermath of these reforms.
According to him, with more people being pushed into the poverty net, there is a high likelihood of an increase in unemployment which could further worsen social vices such as armed robbery and other forms of organised crime.
He said, “Of course, the situation will affect the expenditure pattern of Nigerians. If you look at someone who is a fixed-income earner who was earning the same salary before all these policies are made. There are no palliatives. The cost of living is on the increase. The implication of this is that it will drive down their consumption expenditure.
“Once their income does not increase and the prices of goods and services are increasing, it means that they will have to reduce their consumption to manage the little resources at their disposal. We are going to see a situation whereby the level of consumption expenditure, for the consumers and organisations as well. You’ll find out that the expenditure for the firms, which is investment expenditure, is also going to reduce.”
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, lamented the hardship that Nigerians are currently facing due to the fallout of the removal of fuel subsidy.
He urged the government to reverse some of its newly introduced tax measures as this would further exacerbate the hardship of the citizens.
He said, “They should reverse this new vehicle tax, this proof of ownership tax that they announced because these things can even provoke the citizens.
“They also said they want to start taxing the informal sector. All these things should be put on hold because there is only so much sacrifice that the citizens can make at a time; because whether you like it or not, this fuel subsidy situation is really biting hard. It is affecting a lot of people, especially the vulnerable people.”
Recently, a member of the House, Philip Agbese, moved a motion titled, ‘Need to Declare Emigration of Young Nigerians Abroad A.K.A Japa Syndrome a National Emergency,’ and urged the government to “convene a national summit with key stakeholders to effectively address the ‘Japa Syndrome.’
He said, “The House is concerned that the growing statistics of young Nigerians leaving Nigeria… portends a grave danger for our nation in many ways from economic to intellectual and social aspects.”
The house has since voted against the motion. Punch
He noted that this had led to a dire outlook for health professionals. He said, “But if you’re looking at the statistics of Nigeria, it is one nurse to 1,660 patients, looking at the population of Nigeria.”
The PUNCH report recently stated that 6,068 medical doctors moved to the United Kingdom between 2015 and 2022.
The report disclosed that +the number of migrating doctors increased by 375.1a per cent from 233 in 2015 to 1,107 in 2022. Data obtained from the Higher Education Statistics Agency of the UK by The PUNCH, disclosed that 128,770 Nigerian students enrolled in universities in the United Kingdom between 2015 to 2022.
In 2022, the number of dependents (i.e. spouse/family relations of migrating students) increased to 66,796 from 27,137 in 2021. Yearly, these Nigerian students and their dependants in the United Kingdom contribute about £1.9bn to the UK economy, according to an analysis by SBM Intelligence.
Par another The PUNCH report, about 28,358 Nigerians received invitations to apply for Canadian permanent residency from 2015 to 2021. The Nigeria Immigration Service recently announced that it issued 1.83 million passports between 2020 and 2021.
According to the Executive Director of Adopt A Goal Initiative, Mr Ariyo-Dare Atoye, the rising number of Nigerians obtaining passports was connected to the high emigration rate caused by the harsh economic realities and security challenges in the country. Punch
