Bracing up for the uncertainties of 2024 amidst rising Misery Index, most Nigerians are doubtful of the possibility of improved standard of living and quality of life any time soon, as the World Bank has projected.
The World Bank recently projected that Nigeria’s per capita income will return to its pre-pandemic level by 2025. This improvement is expected due to the gradual impact of macro-fiscal reforms initiated by the government.
The World Bank’s projection on per capita income is similar to a projection by an analyst at the global investment bank Morgan Stanley, who said the reforms made by the current president of Nigeria, Bola Tinubu, may lead to a strong increase in annual income despite the challenge they pose for economic growth.
Per capita income is used by economists to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population.
Experts view quality of life as a highly subjective measure of happiness that is an essential component of many financial decisions, with financial security, job satisfaction, family life, health, and safety as determining factors.
However, while the World Bank’s report is optimistic about Nigeria’s economic growth and per capita income returning to pre-pandemic levels by 2025, analysts are pointing at the growing misery index, which measures economic distress by adding the rates of unemployment and inflation, two conditions that can have serious impacts at the individual and societal levels.
An X user, Femi Adenuga disagrees with IMF. According to him, the average Nigerian is poor.
“The economy is harsh, nothing caters to the vulnerable. People want to build their lives but the economy is against it, depression is on the rise. It’s a terrible time, “ he wrote.
Also, Ayobamigbe on X noted that the Nigerian economy is disconnected from the average standard of living, and there is a growing disparity between the state of the economy and the GDP per Capita.
He regretted that the country has Trillion dollar banks but low purchasing power and insufficient capital for industries.
According to the Nigeria Economic Summit Group (NESG) 2023 report, the misery index has increased as 40 million of Nigeria’s population live in inflation induced poverty.
There’s a lot to be said about having a job but still living in poverty, the report stated.
Nigeria’s misery index soared by 11.9 percentage points to 73.05 last year,
The misery index is a measure of economic distress felt by everyday people, due to the risk of (or actual) joblessness combined with an increasing cost of living. The misery index is calculated by adding the seasonally adjusted unemployment rate to the inflation rate.
The misery index of a nation is a yardstick of economic distress. It was created by the economist, Arthur Okun.
Professor Steve Hanke of Johns Hopkins University further improved the model for measuring the misery index by defining it as a total summation of the inflation rate, unemployment rate, and interest rate and subtracting percentage change in real GDP per capita (year-on-year).
Under President Tinubu’s economic policies, analysts say Nigeria’s Misery Index paints a concerning picture, necessitating swift and targeted measures to alleviate poverty and reform impacts.
Balancing economic growth with social welfare is crucial for a stable and prosperous future, though predicting the masses’ endurance in the current economic affliction remains challenging.
Although the 2024 Hanke’s Misery Index has not been released, Nigerians’ plunge into poverty can be felt literally on the streets and in homes, with the continued rise in inflation.
Starting in 2023 at approximately 73.05, Nigeria’s misery index has escalated. Economists like Dr. Ikchukwu Okafor and Dr. Gbenga Omotosho forecast a crossing of the 100 percent threshold in the upcoming.
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