Nigerians endured the challenges of the year 2023 amid fluctuations in the country’s economy. The past twelve months were particularly difficult for many citizens, marked by the significant economic policies of the Bola Ahmed Tinubu government, namely the removal of fuel subsidies and the reform of the exchange rate in the second quarter of 2023.
Surviving the year proved arduous not only for ordinary Nigerians but also for business owners. Notably, GlaxoSmithKline Consumer Nigeria, Procter & Gamble, and other companies opted to exit Nigeria, attributing their decisions to economic hardships stemming from the foreign exchange crisis, energy shortages, and multiple taxation.
The challenges began in the first quarter with a severe cash crunch resulting from the implementation of the redesigned Naira policy, alleviated only when the Supreme Court intervened. The general elections in February and March also contributed to a sluggish business environment in the first quarter.
As a consequence, Nigeria’s Gross Domestic Product (GDP) growth declined from 3.52 percent in the fourth quarter of 2022 to 2.31 percent in the first quarter of 2023, according to data from the National Bureau of Statistics. Unemployment rose from 4.1 percent in Q1 to 4.2 percent in Q2 2023.
The impact of fuel subsidy removal and exchange rate unification extended into the last three quarters of 2023. The removal of fuel subsidies was initiated in May 2023, causing a sharp increase in the fuel pump price and subsequently affecting the prices of transportation, food, and various goods and services nationwide. Inflation surged to 28.20 percent in November, compared to 22.41 percent in May 2023, as per the National Bureau of Statistics consumer price index.
The exchange rate reform further weakened the Naira, depreciating by at least 49 percent in the last six months. This led to soaring prices of goods and services, including JetA1 fuel, minerals, wheat, electronics, pharmaceutical products, and other consumer goods, which experienced price hikes of at least 50 percent during the period under review.
