Last quarter, we looked into some of the pressing issues such as inflation rates, new regulatory policies, insecurity and updates on the Covid-19 situation that were dominating the state of affairs of the country and its economy. Few of these events presented a positive outlook, and we, at the OVAC Group, envisioned that some of these matters will persist in the coming quarters, and Q2 did not change this view.
Although the economy is still set to recover, there have not been many significant and positive changes driving it to normality in the second quarter. For instance, in the last quarter, the Consumer Price Index (CPI) was capped at 18.17% in March and as at April 2021, it fell to 18.12%, showing a 0.05% decrease in the CPI.
Similarly, core inflation rate increased from 12.67% to 12.74% while food index decreased by 0.23% (from 22.95% to 22.72%). According to the May report from the Nigeria Bureau of Statistics (NBS), the CPI, Core Inflation rate and Food Index were capped at 17.93%, 13.15% and 22.28% respectively.
On the other hand, the rate of insecurity in the country is alarming. Issues ranging from killing and kidnapping of school children and youths, to violence between herdsmen and farmers, and to robberies are constantly reported in the news. Despite the Government’s effort to put measures in place, not many improvements have been recorded thus causing a dampening effect on the economy. Existing companies are struggling to offer quality services and ultimately, foreign investors are planning their exit from the market, which will ultimately lead to an increase in the unemployment rate.
In addition to these pressing issues, the business world has been affected by the continuous fall in the value of the Naira.
Amid the chaos in the country, the transportation industry seems to be making waves. This is following the commissioning of the Lagos-Ibadan rail line by President Muhammed Buhari on 10 June 2021. The newly commissioned railway station has a holding capacity of 6,000 people. The significance of this action, as described by the president, is “Another milestone in the drive of our Administration to revitalize the railway system and establish it as a choice mode of transportation for both passengers and freight”. Furthermore, this will boost trading and commercial activities, as well as create new job opportunities.
In summary, the situation of the economy seems to be deteriorating as markets are becoming volatile. Now is the time for private stakeholders to collaborate and come up with solutions to improve standards of living in the country.
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