Welcome to the Concerned Nigerian Edition on Bsgistnews blog, a segment highlighting powerful views from Nigerians for the public.
Endless High Cost of Food Items Despite Naira Appreciation: Indicating the Real Culprit, the Government of the Citizenry
by Masroor Mahmoud Adeeyo of the Mahmud’s Blog, featuring our pioneer, Gesinde Muhammad Hadji
According to Newton’s third law “For every action, there is an equal and opposing reaction”.
The Renaissance mathematician, Nicolas Copernicus formulated a theory in Economics called the Quantity Theory of Money, which states that inflation is caused by an increase in the money supply in a country.
In other words, when more money is printed or introduced into the economy, the value of money decreases, and prices for goods and services rise. This is because the demand for goods and services stays the same, but there is now more money chasing after the same goods and services. This leads to an increase in prices, which is inflation.
Judging from the aforementioned, it is certain that every little action that takes place within the economic hemisphere of a country should have an effect in the economic well-being of its citizens, either positively or negatively.
That is, the inflation that started as a result of Naira should also stop as Naira is regaining its value.
Which begs the question, why is food inflation not reacting to Naira’s action?
Philosophers have mentioned that people tend to blame abstract things for their failures, simply because these abstract things cannot be questioned.
This is why most people would blame their ‘village witches’ for a self-inflicted disaster, simply because the ‘village witches’ cannot be questioned.
It’s the same with food inflation. Everyone is quick to point their fingers at the government as the culprit, simply because in our part of the world, it is difficult to question the government about their actions.
But this doesn’t in any way change the fact that majority of the troubles plaguing Nigerians are in fact, caused by Nigerians.
The citizenry makes up the industries, the citizens are the market, they are the buyers and sellers. The government only has as much say in whatever goes in the country.
The recent food inflation was triggered by a fall in the value of Naira and the government reacted which led to a rise in the value of Naira.
However, against the law of economics, the food inflation that began because of Naira has refused to succumb to the powers of Naira. This clearly indicates that the issue is now beyond the government.
The avariciousness of the citizens has now reared its ugly head. The average Nigerian wholesaler has refused to reduce the price of their goods because leaving it that way ensures there is huge profit margin for them, leaving the average market traders with no choice but to keep their price the same.
Although, the government cannot be completely exonerated from this mess. The inability of the government to setup an effective price regulating commission has led to the powers that be controlling the inflation and deflation rate as they wish, regardless of economic factors.
Great write-up