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Stagflation and how to tame Nigeria’s misery index
Jan 18, 2021
The headline inflation has grown consistently in the past 15 months to hit 15.75 per cent in December. The last time the index reached and exceeded its current figure was December 2018.
Unmanageable inflation growth is a challenge but just one among the red data the economy is grappling with. Unemployment (plus underemployment) also reached an all-time high of above 55.7 per cent last year just as the weak naira is crushing the purchasing power of an average citizen daily.
At the same time, production continues to face a cost efficiency challenge with the government’s ability to intervene being weakened by falling revenue. The country officially announced a recession last year when the gross domestic product (GDP) plunged over six per cent.
These indicators point to one worrisome socio-economic trend – a growing misery index, which a professor of economics, Akpan Ekpo, said “was above 90 per cent the last time” he calculated it.
The misery rate index determines how the average citizen is doing. It has a strong correlation with social upheavals and crime rate, which has already held the northern part of the country hostage manifesting in banditry, kidnapping and terrorism.
The index also, in theory, measures the social costs of unemployment, inflation and growth rates, which are all currently at a crisis level.
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