Nigeria going Venezuela?

A recent report by Andres Schipani for Financial on the state of affairs in Venezuela should be scary for us as people for if care is not taken that is where we are headed as a country. We have done what Venezuela did in the last one year and excerpt urgent steps are taken, Nigeria’s tomorrow is painted for you below:

“On one side, under the burning midday sun of Maracay in north-central Venezuela, hundreds of angry people have been waiting in line since 4am to buy food. On the other side, a group of military men guard the gate of a supermarket. The high-noon showdown is tense.

“There is nothing left to sell. If you really wanted to buy food, you should have started queueing at two in the morning,” yells one of the military men. “That is the people’s food,” an angry mother of four retorts. “People are losing patience … we are all tired.”

Snaking queues for scarce staples are a common sight across Venezuela and looting is becoming routine. This poses the biggest risk to Nicolás Maduro, the socialist president.

“The situation is very, very critical,” says Marianella Herrera, a professor of food and nutritional public policy at the Central University of Venezuela, who also runs Fundación Bengoa, a watchdog dealing with issues around nutrition. “The anguish when it comes to acquiring food is gigantic and generates violence.”

Only days before the supermarket showdown, hundreds of people had broken into the wholesale market next door, which had been guarded by paratroopers in red berets. Eyewitnesses say there was a “stampede”, with people rushing to get their hands on packs of rice, sugar and cornmeal flour.

“[It is] written in the Bible, people will kill each other for food,” the voice of a woman can be heard on an amateur video of the looting. To some, like Marcial Salazar, who sells vegetables at the market, the situation is understandable: “People are hungry for food, and hungry for having someone good in power.”

Mr. Salazar opens the fridge at his household of six to the Financial Times. Its only contents are a handful of mangoes picked from a nearby tree and plastic bottles filled with tap water. Next to it, a bucket contains half a kilogramme of black beans, half a kilogramme of dried pasta and one kilogramme of maize flour: “That’s all for the week.”

“The people now face the dilemma of taking to the streets to demand change or spending their days queuing in order to feed their families”, said José Ramón Arias, opposition legislator in Maracay.

Hampered by nationalisations along with price and currency controls, food production continues to plummet, says Venezuela’s Chamber of Food Industries.

Ms Herrera of the Central University of Venezuela, says: “The economic system that rules here has severely [hit] food production. That is compatible with a situation of hunger.”

Furthermore, Venezuela is set to continue to squeeze imports due to depressed prices of oil, which account for 95 per cent of export earnings.

Miguel Pérez Abad, the country’s economic tsar, recently told Bloomberg that imports would fall to about $20bn this year from $37bn in 2015. “We’re going to maintain this level of restriction to force the productive sector of the economy to increase output. Hopefully we could cut imports to as low as $15bn.”

“The adjustment programme posed by Pérez Abad is of high risk, economically and socially … Socially, it is a time-bomb and if it explodes, there is no way to know the path the country will take,” wrote Carlos Miguel Álvarez and Asdrúbal Oliveros at Ecoanalítica, an economic and financial consultancy based in Caracas.

The move may be aimed at preserving hard currency and paying bondholders, but against the background of a dire recession, near-hyperinflation and barren shelves, 85 per cent of Venezuelans do not trust the government to handle the situation, and blame officials for the current crisis, say local pollsters.

Mr. Maduro continues to blame private businesses for waging an “economic war” against him through alleged hoarding. Yet, while Coca-Cola said it would stop producing sugary drinks in the embattled country due to a sugar shortage, Mr. Maduro is tightening the grip on Empresas Polar, Venezuela’s largest food producer.

With 96 per cent of Venezuelans identifying food scarcity as their principle problem, a move to further shrink Polar’s production capacity could become a problem for Mr. Maduro. According to Datanálisis, a pollster, food shortages in Caracas reached 83 per cent in April.

Datanálisis adds that Polar can produce five times more food with the same amount of money than Venezuela’s food ministry, which did not reply to requests for comment. Nomura adds that “low inventories” at Polar “are threatening production of the staple cornmeal flour at the end of May”.

The food crisis comes as tension and unrest grows due to the opposition’s push for a recall vote to remove Mr. Maduro. While sitting and former regional presidents and the US are calling for dialogue between opposing camps, shortages could spark a social explosion that may lead to his violent ouster”.