HARDSHIP MAY FUEL PROTESTS IN NIGERIA, OTHERS –REPORT
Social unrest in Nigeria and other African countries over challenging socio-economic conditions is likely to intensify in the year ahead, a new report has said.
The report, documented by a consultancy group – ControlRisks for Oxford Economics Africa – is titled, “Africa Risk Reward Index 2022.”
It said incumbent governments and political elites should be wary of these cost-of-living protests and closely monitoring public sentiment.
According to the report, security forces had so far prevented unrest from escalating. Nonetheless, further unrest was likely in the year ahead, as socio-economic conditions would remain challenging.
It read in part, “The latest surge in dissatisfaction has highlighted the inefficiencies in government and stark inequalities across many African countries. In recent years, people across the continent have mobilised in large numbers on various issues in sometimes unexpected ways.”
The report further noted that despite having debt ratios much lower than other African peers, Nigerian debt borrowing costs were expected to absorb around one-thirds of fiscal revenue this year.
It said that given the proportion of revenue directed towards borrowing costs, and considering how much the government spent on public sector salaries and wages, there was very little scope to redirect spending in order to provide additional economic support without accruing additional debt.
Global risk aversion would make it harder for African countries to gain access to the affordable debt necessary going forward, the report noted.
It further said that this might accelerate fiscal consolidation efforts, implying that short-term fiscal support measures implemented to cushion the impact of the war could be cut short, which would further exacerbate the growing civil discontent that had emerged across much of the continent.
“Faster fiscal consolidation might mean that governments will have to rein in their public investment initiatives and therefore dash their economic growth projections.”
Perhaps an even less favourable outcome would be that governments are unphased by rising borrowing costs and continue down an unsustainable fiscal path, which would require much deeper and more painful consolidation in a few years’ time,” the report further read.
This year, large-scale protests have already been reported in Guinea, Uganda, Malawi and Sierra Leone between June and August.
In Sri Lanka, massive protests have occured in recent months due to economic hardship, a development which forced President Gotabaya Rajapaksa to resign and flee the country after a mob broke into his residence in the capital