As Prices Rise in Nigeria, from Electricity to Garri, It’s Time to Build

It is indeed a redesign of an economy as prices increase across all domains in the Nigerian market: “…Electricity Distribution Companies (DisCos) have begun to issue notices of tariff increment to consumers following the naira’s floatation that has resulted in the rise of exchange rates.” Sure, some of these rises could be connected to the cost of production (especially energy with the removal of fuel subsidies) and floating the exchange rate in a largely import-dependent economy. The implication for the future is that Nigeria needs to find ways to increase supply if it wants to attain a better pricing equilibrium.

Of course with the population growing faster than the economic opportunity, we’re going to see demand swamp supply, further pushing the price to a non-optimal position on the demand-supply curve. Many things are expected to change.

Last year I wrote, “…by 2027, most of our federal universities will be quasi-privatized.” The recent education loan ordinance posits a path that will remove subsidies and possibly make investing in education attractive as it could increase demand. (Sure, everything depends on inflation as few entities will like to give loans in Nigeria with a tenor in excess of 24 months).

Prof, I am of the opinion that the education loan and education subsidy removal would do more harm than good. With poverty rate set to reach another high, the school dropout rate could be as high as 40 to 60%. I can't see the feasibility or viability of student loan at the moment

— George (@UtehGeorge1) June 26, 2023

Left and right, Nigeria needs to start building and making things. That is the only strategy that remains now, as we need more supply of everything, from electricity to garri, if we expect a better shift of price on the demand-supply curve.

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