The Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane, has said that Nigeria’s misery index has risen from 44.1 to 45.6 per cent.
Rewane, who stated this at a public symposium on performance of President Buhari’s administration, also noted that inflation rate in the country is at 15.6 per cent, while unemployment has risen by 31 per cent.
The misery index is an economic indicator that helps determine how the average citizen is doing economically and it is calculated by adding the seasonally adjusted unemployment rate to the annual inflation rate.
Rewane noted that about 45.6 per cent of the country’s populace could be considered miserable while the other are considered prosperous.
“When the misery index deteriorates for two quarters, the favourable rating of that administration suffers severely. The state of the Nigeria economy, with a GDP of $500 billion and dependent on crude oil crude, as oil makes up only about 12 to 15 percent of our crude, means that in term of revenue and the fuel that runs the economy, oil and gas mean everything,” he said.
According to Rewane, “To test this hypothesis, ask yourself, if it is true, that oil makes only 15 per cent of this economy, close the oil wells today. It will mean that if you close them today, 85 per cent of the economy should continue. But (in reality) if you close them down, that same day, there will be no money going into the CBN, no dollar to fund trade, no dollar to convert into naira to fund the government.”
He said: “We should not be deceived by what we call asymmetric data, which tells you that the economic activity has been diversified, that is the kind of propagandist literature for the past five months. The revenue activity of this nation, are still concentrated on oil and gas, oil is about 89 per cent, LNG, 9 per cent and the rest.
“The dependent on oil is so much, so that today, cocoa light crop, Ivory Coast and Ghana, the price of Cocoa have gone through the roof. Nigeria is the 4th largest producer of Cocoa in the world but cannot be able to benefit from it, because we have not been able to respond to the structural needs.
Trade is 18 per cent of our GDP, wholesale and retail trade depends on what people import and what they sell. The movement of people and goods is dependent, to a large extent, on the availability of petrol, diesel.
“Major discussion in the country is how do we get dollar, and that is because the price is wrong, if the price is right, there will be no such thing, there will be no queues in the banks for dollar.”
Speaking further, he said: “Talk about inflation, recession, States’ bailout, etc. If the States will pay N300 for every dollar, Shell will not be up there queuing up to N90 billion to pay salaries.
If we devalue our currency, what are we going to export? How are we going to make and maintain our standard of living? The reality is our standard of living is a function of what we produce, and if we don’t export, we produce locally.
“The government says if we must produce locally, we need to ban importation, and keep the exchange rate. But the only way to produce locally is if the exchange rate makes it impossible to buy.
When the country starts to live above their means, to spend on things they cannot afford, to aspire for things they should not aspire for, the ultimate outcome of that is crisis of false expectations.
Painfully and slowly, we are going into the right direction. This recession will be followed by a recovery process, we should not be deceive that we are going to wake up and go back to our old habit, it’s going to be an L- shape move, flat at the bottom and then rise.
“Over 35 percent of our imports are refined products, which means that if Nigeria imports $100 million worth of stuffs, $35 million was for importation of petrol. If that volume drops; out of the 35 $million, a third of that will go, so our import bill automatically will come down by 30 per cent of the 35 per cent. So instead of $100 million, we will be importing only 85 per cent or $82 million, the extra dollars will be available for other things.
