Friday, February 13, 2015

Overtake don Overtake Overtake

Title credit goes to Fela

I get my money
Plan my plan finish
Start to go for market
Start to go for shopping
Before I reach market nko o?
Government show don enter
My plan don spoil o
Government show don enter
My plan don spoil o

My friend wan come buy fan
Him dey sweat for him dey sleep for room
Him dey for level of three
The fan na seventy-five naira
My friend him dey follow salary
Him dey try to save and save and save
Every time he nearly buy the fan
Government go add ten naira more
Every time he nearly buy the fan
Government go start one activity
Till the fan reach two hundred naira
My friend nearly die, he never die

My friend he no wan die
Die-die no dey for him dictionary
For where? Huh...
Him dey try to save and save again
Him save for one year and six months
Inside cupboard
Under pillow
Under, under cooking pot
Inside socks
Under carpet
Him dey on his way to buy the fan
When alarm come blow
Government announce second tier
Everything come tear to pieces
Everything come expensive
Even water become expensive

Fan don become seven hundred naira
Me and my friend start to look ourselves
He remain small make my friend dey cry
Na laugh laugh he catch monkey
Na now he come understand him life
Enjoyment can never come him way
Na now him life dey go reverse
In Africa, him fatherland

credit: Lyrics of Fela's O.D.O.O 

The current events in Nigeria- the falling naira (officially now at NGN 205 to $1), the effects of the oil glut and falling oil prices (Brent oil which Nigeria produces sells for $56pbd), yet the benchmark for our budget is $65 per barrel and the leakages in the system that are not fixed portend what the times Nigerians are in for. 
We have a budget of 4.3 trillion naira and the government may have to borrow to fund it yet  agencies like NNPC and FIRS answer to themselves and remit to the Federal Government what they please. FIRS generated 4.69 trillion in 2014
Citizens may not immediately see the impact of our dwindling fortunes because  oil revenues primarily go to the government with little effects on the average Nigerian because governments at all levels fail to carry out their duties. The government wants to begin austerity measures  most Nigerians have been for ages. Unfortunately, citizens have to now embark on austerity 2.0. 
The combination of lower oil prices (which means that oil proceeds to the government is reduced), the devaluation of the Naira(because Central Bank can no longer afford to defend the Naira). Sadly, the failure to hold governments responsible has come back to bite us and those who may be unaffected are very wealthy  Nigerians

We are a consumer economy that imports a significant number of items including food, clothing and machines to run factories. Imports are denominated in dollars and importers will require more naira to get dollars to import the same amount of goods. They definitely will pass the costs to consumers. Imagine a trader buys 1000 units of a good at $1 per unit, In December, the cost was between NGN 165-170,now, that same good will cost NGN 210 to import. Received information is that the exchange rate will rise to  NGN 250 and the Naira maybe devalued again.  The increases in cost of goods means a reduction in purchasing power. For instance, NGN100 bread may now go for NGN 150

Second,  there is going to be a differentiation between the wealthy and the rich. For the nouveaux, wanna- be rich, family vacations may no longer be affordable. With current exchange rate, a flight to  London  will cost $663  for the fare and $590 for the tax and charges which goes  to the government of Nigeria. The ticket per person will cost N244, 0000 and this is not even summer! At that time last year, this would have paid for  12 hours trip to the United States. Thus,a father of 3 may have to shell out 1.2 million ($6000) for tickets alone.

Parents will see an increase in schools and goodluck to those who pay fees in dollars and pounds either in Nigeria or abroad.Add to that the retinue of dependants people are responsible for. Indeed, the days of "Uncle please I need 10,000 for project", "please send me recharge card" may be over because people's disposable income will be reduced
The poor and working-poor Nigerians would also be impacted as food prices will increase. This government has touted its achievement in reducing our food import bill to $4.3 billion. Unfortunately, we still import foodstuff and items like kerosene stoves and cutlery.

Finally, the value of whatever savings people may have (except it is saved in foreign exchange) has been effectively reduced. People saving to buy a car, a dress- anything that will be imported will have to save more. History did not have to repeat itself and it would not have if only we  learned from the past and put our leaders on their toes. 

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