Contra Inflation: The futility of salary awards

Since May 29, 2023 when oil subsidy removal was hastily announced by President Ahmed Bola Tinubu shortly after his inauguration, life in Nigeria has not been the same. The average Nigerian family can no longer afford three square meals in a day. In fact, some families cannot even feed more than once a day.

Fifty Naira denomination is fast being phased out because it can no longer buy anything due to hyperinflation occasioned by a poor economy.

In the United Kingdom, Penny is still being used for transactions because of its economic value, but in Nigeria, the kobo has long been dead, pushed  into extinction due to its powerlessness in the free market.  A loaf of bread that was sold at N300 to N500 now costs N1,400 and is still rising.

Instead of the government thinking out of the box, it is busy awarding salaries to workers. Where on earth has salary increment solved economic problems? Primary Economics teaches us that when plenty of money chases few goods and services, prices are bound to increase. This is a law that cannot be contravened, proven time and time again.

What if the Federal Government had done its homework well before announcing subsidy removal. Surely, the story would have been different, less disastrous. The industrial disharmony the Federal Governnment is battling with Labour wouldn’t have in the first place occurred.

It has been about forty four years since the Nigerian government started building Ajaokuta Steel Industry and till date the project remains uncompleted. The question is what is holding such a project that is critical to the country’s industrialisation from being completed?

This boils down to the fact being severally canvassed that technology cannot be transferred. If foreign partners cannot deliver on this all-important infrastructure, possibly because of their national interest, can’t we use local or Nigerian engineers and give them targets, backed up with political will to tidy it up? This is very possible because Nigerian engineers have distinguished themselves across the globe where the enabling environment is rife. This feat can also be replicated in the country with necessary support from the powers that be and precisely the federal government. There is no shortcut to success anywhere in the world.

Sixty three years after independence, suffice to say that the country is yet to chart a course for itself. The citadels of knowledge, that is, universities are still grappling with salary increment and incessant strikes, when their counterparts in other climes have since settled down for research to better their immediate society or environment.

Where have we got it wrong? When Nigeria discarded the use of British Pounds as currency of exchange or legal tender, 75 Kobo was exchanging $1, what do we have today? Over N1,000 is exchanging $1, can one now say that our economy is doing well and that our leaders have done well? One needn’t be fastidious.

Now that we have opted for salary awards without commensurate goods and services, the future definitely is bleak. What then do we do to bring the nation out of this economic dungeon?

First and foremost, we must as a nation decide where we are going before getting up from our seat. The current economic woes the country is facing was worsened with the hasty oil subsidy removal. Not to say  that it was Eldorado before the subsidy removal announcement, but it wasn’t this — this dreary, near-fatal existence.

Therefore, in as much as we are not asking for the reinstatement of the controversial oil subsidy, it has become pertinent to complete the protracted turnaround maintenance of the four existing refineries in the country, to provide PMS and other petroleum products to the populace.

We have stated this time without number that if the four imported giant refineries can no longer work, they should be replaced with modular refineries. It is now clear that crude oil is regularly refined by illegal operators, commonly referred to as bunkerers or ‘kpo fire.’ What that means is that crude oil is locally ‘refineable’ and by Nigerians. So with proper support and an enabling environment, this is achievable.

At 63, the country should have decided what it wants by now, and what any sane nation wants is development in the proper sense of it, be it economical, political, social, or technological. So it behooves our leaders to do the needful by leading us aright.

For emphasis, salary increment or award is not the solution to any economic problem. Proper economic policies should instead be put in place to force down cost of living, for that is the only time peoples’ salaries no matter how small can make meaning, and economic watchers and pundits will give thumbs up to the Government if that happens.

It is not late yet to start, but a stitch in time, they say, saves nine.