By Kayode Emola
The last year has been a nightmare for the common man, finding himself responsible for footing the bills of high inflation, high interest, and the cost of living crisis, in the midst of a number of trying situations. Many Western leaders want us to believe that these all stem from the conflict in Russia; yet they cannot justify how, in these same circumstances, the rich are getting richer, and energy companies are declaring hefty profits. Whilst at the same time, the poor around the world have been left behind to fend for themselves through all of these tribulations.
Many of us are oblivious to the wider picture, unconcerned with the global financial tsunami that is currently stirring. However, we are all feeling the effects of inflation and the rising costs of everyday items; none of us is insulated, even in our ignorance. Therefore, I am going to discuss a few of the global events and potential ways to mitigate the challenges. For those who are conscious, this may serve as a precaution to prevent them from falling into a ditch; whilst for the less aware, maybe a note of caution will manage to bring them back on track.
It is undeniable that inflation is biting hard, causing prices of everyday goods to spiral out of control. A large contributory factor in this was the recklessly excessive printing of money by countries in Europe and America during the Covid-19 pandemic. Now, with their economies suffering, it raises speculation about whether this has given the West a hidden agenda in terms of their approach to the conflict between Russia and Ukraine.
Unquestionably, in the circumstance of war, certain parties are guaranteed to profit, namely, those whose business interests lie in the production of munitions. One may therefore infer that such parties would have a vested interest in prolonging the conflict, rather than dispensing with rapid and decisive intervention.
No one can justify Russia’s use of force; however, a more meaningful approach could have been taken to avert the war. Russia had amassed troops at the border of Ukraine for over a month, thinking that this will give it leverage in negotiating with NATO and the European Union (EU) for Ukraine’s continued exclusion from these entities.
Perhaps if the United Nation had intervened in time, the situation could have been de-escalated in a timely and professional manner. Instead, Russia felt unheard by the Western democracies; and, as a result, we all are paying the high price, whether we like it or not. The thought that the war is likely to go on for several more years is one that should chill the spine of every person around the world.
What is currently Happening?
Recently, we have seen the impact caused by the current crisis on the banking sector. Rising inflation has caused central banks to raise interest rates worldwide. Peripheral banks that had sold long-term products at lower interest rates now have to pay the difference themselves, thereby potentially jeopardising their own financial stability.
Secondly, banks that have invested in long-term government bonds have seen the value of those bonds fall. This has not only put customers’ money at risk, but the market response to the two conditions has caused two internationally renowned global banks (Silicon Valley Bank and Credit Suisse) to have to be forcefully taken over. Furthermore, the Germany-based Deutsch bank is also having trouble. It takes only one event or mistake for everything to spiral out of control, and the whole house falls like a pack of cards.
People have seen their electricity and gas bills triple in recent months; and pump prices of diesel and petrol have been similarly impacted. An average household in the UK that was previously paying less than £80 per calendar month are now paying in excess of £300 pcm just to keep their homes warm. Despite all of this, major energy companies are still declaring serious growth and profit. Just this week, it was reported that the chief executive of British Gas, Chris O’Shea, had been awarded a performance bonus of £1.4m last year, bringing his salary for 2022 up to £4.5m. Yet concurrently millions of ordinary people are unable to afford to even heat their homes.
Not only are energy costs increasing aggressively, but the central banks’ rising interest rates have led to mortgage rates returning to levels not seen since 2006, prior to the financial crisis. This has caused monthly mortgage repayment figures to rise by over £450 pcm, in some cases, a situation which is clearly unsustainable in the long run.
For my Yoruba folks, what does this mean for our survival? The mere fact that we are in Nigeria already sets us at a disadvantage when attempting to navigate the choppy waters of the global crisis. Despite the enormous challenges facing the country, the Central Bank of Nigeria last week increased its interest rates to 18%.
It is becoming clear that we must find a way to create our own financial system, in order to mitigate against soaring interest rates and inflation. We must put measures in place to ensure that the disastrous naira redesign policy, which devastated millions of our people, cannot recur in the future. A self-contained financial ecosystem built on blockchain technology would allow us to protect ourselves from hostile government policies. This would also help our people safeguard money for a rainy day.
Ultimately, we Yoruba need our own financial system. However, this is likely to be impossible until we exit from Nigeria. In the meantime, whilst we await the birth of our Yoruba nation, I implore us all to be aware that we are living in precarious times wherein only the prepared can survive. This is not the time to embark on frivolous spending, but rather the time to be careful and judicious with our finances. Protect your upside and ensure that your downside is covered, so that when the storms get heavier, you will be able to not only survive but thrive, when others are complaining.
