Nigerians and Africans started commenting on the Ukraine-Russia crisis and war with excitement as they argued in support or against the war as it happened far away without knowing how it would affect Nigeria and Africa negatively economically. The fact about any war at all is that there is no positivity about any war. For the Ukraine-Russia war, there are the economic implications of the Ukraine-Russia war for Nigerians and Africans.
In this post, we’ll be exploring these economic implications. In an attempt to discuss the implications, you should note that we would also focus on other countries briefly. However, the major focus would be on Nigeria as a country, and Africa as a whole continent.
The Economic Implications of the Ukraine-Russia War for Nigerians and Africans
Increase in Inflation: This is the first effect that was noticed as the crisis and war broke out. There is massive increase in inflation among the countries of the world, especially in the developed countries. The United States of America is, at the moment, experiencing one of its worst inflation crises.
For Nigeria and Africa, the inflation is rising, especially for products that are heavily imported from Ukraine or Russia. Nigeria has been suffering from inflation but prior to the war, the inflation had been receding. With the war and crisis in full effects, the inflation is increasing again; the naira is depreciating very fast.
You should note that even the dollar is also affected as it is depreciating in value as well.
High Cost of Gas: Nigeria, and indeed some other African countries, have substantial gas deposits but cannot produce enough to cater for its domestic gas needs. Thus, the high international price of gas will affect Nigeria as Russia is the biggest supplier of gas in the world. At the moment, gas sells at above 850 naira, very costly for Nigerians.
This will worsen the situation of inflation in the country.
High Cost of Wheat: Ukraine is one of the largest exporter of wheat. For Nigeria, the country is not solely dependent on its production of wheat. Thus, the country is still dependent on importation. Since the onset of the war, the price of wheat has sky-rocketed. This will definitely affect the price of wheat and worsen the issue of the inflation.
Increased Cost of Flour: Since the war has worsened the depreciating value of the dollar, and Russia and Ukraine has roles to play in the flour market, you’re to expect more increase of the cost of flour in Nigeria and Africa as whole. The price is increasing tremendously already and all products manufactured with flour like bread, biscuits, buns, doughnuts, pasta, noodles, and many other have increased in cost.
More Oil Revenue and Oil Expenses: There is increase in oil prices since the war started. This means that there will be improved oil revenue; at the moment, the price of a barrel of oil is above $100, one of the highest ever. However, is the government earning from this?
The answer is a big NO.
This is one of the most negative of the economic implications of the Ukraine-Russia war on Nigerians and Africans. Nigeria sponsored petrol subsidy for the country, thus any meaningful money from the oil price increase is used in servicing the government’s subsidy for the country.
At most points of the country, petrol sells for an average of 180 naira when it is supposed to be around 370 naira and above. This means while other oil producing countries are saving the excess they are making from oil, the country is spending all her revenue.
More Poor Nigerians: As the war and crisis continue to drag on, the inflation would continue to worsen, the naira would continue depreciating, and this means more Nigerians would become poor. At the moment more than 80 million Nigerians are living in extreme poverty. More Nigerians would become poor and extreme poor.
It is projected that by 2023 – 2025, the number of Nigerians in extreme poverty would be above 100 million.
Global Recession: With the continuation of the war and crisis, the world is about to experience one of the world’s worse recession. It would affect Nigerians and Africans critically–inflation would sky-rocket, businesses would suffer losses, people would lose their jobs. Brace for impact, the worse is about to happen.
What can you do as Nigerian or African to stay above the Poverty Level?
- Learn ever green digital skills you can use to seek jobs internationally. You have to earn in foreign currencies to be comfortable in Nigeria in the coming years.
- Don’t save money in the bank or any finance app, use your savings to buy land or properties. Saving your money in the bank as dollars or naira cannot beat the level of inflation occurring now.
- If you have a job, find a side business or income as no matter how highly paid you are, your job won’t be enough to sustain you soon. Vet the business or income and certify it is not scam or would it cause loss for you before going into it.
- Cut down on your expenses. If you are the type who spends anyhow and unnecessarily, this is the time to cut down on your expenses. An economic storm is coming.
- If you have time, try and go into farming, even if it is to cultivate what you eat. Cultivating a bulk of what you eat is important as you have enough to eat and satisfy your family while buying a few things outside.
The economic implications of the Ukraine-Russia war on Nigerians and Africans would be dire. You have to start making plans on how to survive it. Plan ahead and know how to deal with it. It won’t be easy but you deal with it or circumvent it.