by Martin Armstrong, Armstrong Economics:
The world has erupted in conflict as a direct result of the economy turning down. We are seeing it across the globe, from Bangladesh, Ghana, Uganda, Kenya, and Nigeria to name a few. There is peace when everyone is fat and happy but that is no longer the case in the majority of the world amid the cost of living crisis. Some places have been hit far worse than others. The Nigerian naira lost 230% of its value in the past year and is utterly worthless. Inflation reached 34.19% in June 2024, the highest level since March 1996. Food inflation alone is up 40.87%. The cost of living crisis has caused the people to take to the streets to engage in what the media has deemed “the hunger protests.”
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The World Bank valued Nigeria’s GDP at $362.81 billion in 2023 and expects it to surpass $386.4 billion by 2025. GDP advanced 2.98% YoY during Q1, primarily driven by the services sector, which contributed over 58% to the aggregate. Nigeria is an oil-rich nation and Africa’s largest oil producer.
Yet, overt corruption prevents the people from benefiting. Corruption has long been a problem in Nigeria. Most recently, Parliament attempted to impeach Siminalayi Fubara last October after serving only five months in office in favor of his predecessor, Nyesom Wike. Fast forward to the entire Parliament building burning down, followed by the resignation of 27 lawmakers who defected from the Peoples Democratic Party to the All Progressives Congress. Fubara’s proposed 2024 budget led to nine cabinet members and five elected officials resigning. Government then split in half – one supporting Fubara and the other supporting Wike. Nigeria’s President Bola Tinubu overstepped by dropping all cases pending against Fubara. And basically, they have accomplished nothing but continued spending and were already knee-deep in the mess past governments have created. About 90% of the nation’s revenue goes toward repaying its debts. They have no real economic plan it place. Then leave it to government to cripple its own ability to earn. Last May, Tinubu implemented a slew of regulations and economic reforms that included ending energy subsidies and devaluing the naira.
Oh, and Tinbu approved of raising the salaries of government under his economic plan. He also found the funds to purchase a presidential yacht and luxury vehicle. He set aside public funds to renovate his own residence. All of this as the currency continued to decline while inflation rose. The people had been urging the government to remove the fuel regulations and do something, anything, to help.
The people are hungry. Their currency is worthless and they cannot afford food or energy. “Hunger … brought me out. I don’t have money to buy fuel … there’s total bad government. It’s 10 days (of rage). We’ll remain on the streets till our demands are met,” one man told CNN in regards to the 10 Days of Rage protests.
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