Former Nigerian President Olusegun Obasanjo has weighed in on Nigeria’s ongoing inflation crisis, proposing that the country seek guidance from Zimbabwe, which has successfully navigated similar economic challenges in the past.
Addressing a youth leadership symposium at the Olusegun Obasanjo Presidential Library in Abeokuta, Obasanjo underscored the importance of learning from the experiences of others to overcome the current economic predicament.
Nigeria, according to the latest data from the National Bureau of Statistics, is grappling with an alarming inflation rate of 29.9 percent. The sharp rise in living costs has triggered protests across the nation, particularly as essential food items become increasingly unaffordable for many Nigerians.
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The symposium, themed “Opportunities for Peace: Roles of the Youths in Conflict Prevention in Africa,” was organized by the Centre for Human Security and Dialogue in collaboration with the Institute for African Culture and International Understanding. The event provided a platform for discussions on the role of youth in promoting peace and stability in Africa.
During his address, Obasanjo emphasized the need for resilience in confronting challenges, stating, “When the time is rough and tough, the tough must get going… no problem is new and no problem will be permanent.”
He urged Nigerians not to succumb to despair but to confront the inflation crisis head-on, drawing inspiration from the experiences of other nations that have overcome similar economic hardships.
Drawing parallels with Zimbabwe’s economic trajectory, Obasanjo highlighted the southern African nation’s struggle with hyperinflation in recent decades.
“We have this problem of galloping inflation in the country now but do we have a country with such problems recently? Yes we do, Zimbabwe had this problem recently. Shouldn’t we ask them how they did it even if our approach will be different? Even if whatever we shall be doing will be different but we can ask questions to navigate our way out,” he said.
Zimbabwe’s official inflation rate averaged a staggering 43 percent from 2009 to 2023, reaching a peak of 786 percent in May 2020. The crisis had its roots in the 90s, with inflation skyrocketing to an unprecedented 79.6 million percent in November 2008.
To address the inflation crisis, Zimbabwe implemented a series of reforms aimed at stabilizing prices, and exchange rates, and restoring confidence in the currency. Key measures included adopting foreign currencies as official tender, effectively halting the printing of Zimbabwean dollars, and allowing the use of foreign currencies, predominantly the U.S. dollar, for transactions. These interventions played a crucial role in rebuilding consumer trust in the stability of the currency.
Despite facing setbacks and a resurgence in inflation, peaking at nearly 557 percent in late 2020, Zimbabwe has managed to rein in inflation to a more manageable double-digit yearly rate. As of February 2024, Zimbabwe’s annual inflation stood at 47.6 percent, the highest in over a year, reflecting ongoing economic challenges but also demonstrating a degree of stabilization compared to previous years.
Obasanjo’s recommendation to seek guidance from Zimbabwe is rooted in his reputation as a leader who oversaw significant economic growth during his presidency. Described as the “most successful” period in terms of economic performance, job creation, and inflation control, Obasanjo’s administration witnessed substantial GDP growth from 2.58 percent in May 1999 to 6.06 percent in May 2007. During this period, inflation rates dropped from 11.91 percent to 8.55 percent, although there was a slight increase in unemployment from 10 percent to 12.30 percent.
In light of Obasanjo’s remarks, Nigerian policymakers may consider exploring Zimbabwe’s economic strategies as potential solutions to address the current inflationary pressures. By drawing lessons from Zimbabwe’s experiences, Nigeria could chart a course toward economic stability and prosperity, ensuring the well-being of its citizens and fostering sustainable development.
The Nigerian government’s efforts to address inflation have been ongoing. Policymakers have been implementing various measures to mitigate the impact of inflation on the economy. The Central Bank of Nigeria (CBN) has been actively involved in monetary policy adjustments to stabilize prices and support economic growth.
In recent months, the CBN has adjusted key interest rates and implemented liquidity management measures to manage inflationary pressures. Additionally, the government has initiated programs to boost agricultural productivity and food security, aiming to alleviate the burden of rising food prices on consumers.
Despite these efforts, challenges persist, and the call for seeking external guidance, as suggested by Obasanjo, underscores the complexity of addressing Nigeria’s inflation crisis. Economic experts say collaboration with international partners and drawing lessons from other countries’ experiences can provide valuable insights and strategies for navigating the current economic challenges.