The African Development Bank has raised alarm bells, cautioning that the escalating prices of fuel and commodities in Nigeria could lead to social unrest, fueled by opposition to government policies such as subsidy removal.
The AfDB’s macroeconomic performance and outlook for 2024 indicate a projected economic growth for the continent, surpassing the 3.2% recorded in 2023.
However, it also highlights potential threats, citing increased geopolitical tensions in Eastern Europe and the Middle East, coupled with the El Nino phenomenon, which could trigger disruptions in the global supply chain. The report emphasizes that Africa is particularly vulnerable to these shocks, potentially exacerbating energy and food inflation.
The bank warns that regional conflicts and political instability resulting from disruptions in constitutional governments could have severe economic consequences. Resources meant for development and social support might be redirected towards security and defense, hampering overall progress.
The report underscores the negative impact of unconstitutional takeovers on the economy, stating that sanctions resulting from such actions could further worsen the economic situation.
Moreover, the AfDB highlights the potential for internal conflicts in countries like Nigeria, Angola, Kenya, and Ethiopia, where energy subsidies have been removed.
The report states, “Internal conflicts and violence could also result from rising prices for fuel and other commodities due to weaker domestic currencies and reforms. For instance, the removal of fuel subsidies in Angola, Ethiopia, Kenya, and Nigeria and the resulting social costs have led to social unrest driven by opposition to government policy.”
Nigeria, in particular, has witnessed a consistent rise in the prices of food and fuel over the past year. The inflation rate has surged for the 13th consecutive month to 29.90% as of January 2024, with food inflation hitting 35.5%. This surge has triggered pockets of protests across the country.
Transport and LPG (cooking gas) prices have reached a record high of N1300 per kg in many states, while the price of rice, Nigeria’s staple food, has soared to around N70,000 per bag, surpassing earlier projections for 2023.
