Nigerians more Financially Miserable in 2022 As Misery Index Rises to 62.79%
Nigeria’s Misery Index rose to 62.79 percent in July-2022 compared to 59.4 percent when the metric was last measured in December 2021. This represents an almost 6% decline in Nigeria’s Misery Index. In other words, in the last seven months (December 2021 and July 2022) Nigerians have experienced a sharp worsening of the misery index by almost 81 basis points each month.
What is the Misery Index?
The Misery Index is an economic indicator that keeps track of a combination of various economic data to help assess the degree of economic hardship for the people in an economy. The Misery Index is calculated by the following formula:
- Misery Index = Unemployment rate + Inflation + Bank Lending rates – GDP growth rate (per Hanke 2011).
- The higher the Misery Index, the more economic hardship that folks in an economy will experience. Learn more about the Misery Index here
So what about Nigeria?
The National Bureau of Statistics (NBS) and the Central Bank of Nigeria (CBN) both keep several essential economic data. Thus, using the latest available reports for inflation, Lending rate, unemployment, and GDP growth rate.
Nigeria’s inflation rate in June surged further to 18.6% compared to 17.71% recorded in the previous month. The inflation rate has climbed to its highest level in over 5 years.
Nigeria’s unemployment rate, which was last published by the Nigerian Bureau of Statistics (NBS) in November 2020, showed that Nigeria battles with a 33.3% unemployment rate.
The Central Bank of Nigeria is now adopting a hawkish stance to reign in runaway inflation. Specifically, in recent times, Nigeria’s central bank has increased lending rates twice in 2022, leading to a lending rate of 14%.
Thus, putting these parameters together, Nigeria’s latest Misery Index of 62.79 = 18.6% + 33.3% + 14%– 3.11
- Unfortunately, key components of our Misery Index (i.e. Inflation Rate and CBN’s Lending rate) are now beginning to increase rapidly.
- Thus, we anticipate the country’s Misery to further worsen through 2022.