Nigeria: Consumers Groan in the Face of Runaway Inflation

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By Adetunji Faleye

Widespread hunger in Nigeria has shown clearly that the post-pandemic period has been very difficult for consumers more than the pandemic era when the man-made virus inflicted heftier punishment on the human race.

Intensely, most families struggle to get their three-square meals set on the table in the face of skyrocketing foodstuff prices at every opportunity dollar shakes the table against naira.

Sadly, while the exchange rate of naira to dollar keeps falling, the rate at which Nigeria’s naira loses value against most currencies in Africa is beyond comprehension.

This has drastically reduced purchasing power of most Nigerians, both salary earners and those who engage in small and medium-scale enterprises, whose condition has been badly worsened by Nigeria’s economic mismanagement, generic corruption in low and high places, and colossal effects of the Covid-19 pandemic on the global economy.

Global stage

On the global stage, annual shop price inflation has accelerated to 4.4% in July, up from 3.1% in June, according to the latest BRC-Nielsen IQ Shop Price Index.

The figure marks the highest rate of shop price inflation since the index began in 2005, and is well over the 12- and six-month average price increases of 1.5% and 2.8%, respectively.

Food inflation rocketed from 5.6% to 7%, the highest rate since May 2009, as the war in Ukraine caused the cost and availability of animal feed, fertiliser and produce to rise sharply. According to the British Retail Consortium’s CEO Helen Dickinson, some of the bigger price rises were seen in dairy products, including lard, cooking fats and butter.

Nigeria

Here in Nigeria, the leap is so huge considering the data from the Selected Food Price Watch of the National Bureau of Statistics (NBS) for the month of June 2022, which shows that the average price of 1kg of beans (white, black eye, sold loose) rose on a year-on-year basis by 24.17% from N431.79 in June 2021 to N536.17 in June 2022.

Also, on a month-on-month basis, this increased by 2.19% from N524.70 in May 2022. The average price of 1kg Yam tuber increased on a year-on-year basis by 30.64% from N294.29 in June 2021 to N384.48 in June 2022. On a month-on-month basis, the average price of this item increased by 3.29% in June 2022.

Similarly, the average price of 1kg beef (boneless) rose by 26.83% on a year-on-year basis from N1,639.96 in June 2021 to N2,079.93 in June 2022. In addition, the average price of Groundnut oil: 1 bottle, specify bottle stood at N1,062.90 in June 2022, showing an increase of 42.07% from N748.16 in June 2021. On a month-on-month basis, it rose by 2.12% from N1,040.88 in May 2022.

The average price of 1kg Rice (locally sold loose) on a year-on-year basis, rose by 21.62% from the value recorded in June 2021 (N401.82) to N488.68 in June 2022. On a month-on-month basis, it increased from N447.51 in May 2022 to N488.68 in June 2022 indicating 9.20% growth.

In the same vein, the average price of Palm oil: (1 bottle, specify bottle) increased by 42.96% from N609.21 in June 2021 to N870.90 in June 2022. It also grew by 2.77 % on a month-on-month basis.  At the state level, Ebonyi recorded the highest average price of beans (white, Black eye, sold loose) with N899.52, while the lowest was reported in Bauchi with N295.25. The highest average price of Yam tuber 1kg was recorded in Akwa-Ibom with N806.71, while the lowest was recorded in Taraba with N139.64. In addition, Rivers recorded the highest price of 1kg Rice (locally sold loose) with N613.5, while Jigawa recorded the lowest with N374.24.

Analysis by zone showed that the South-East recorded the highest average price of Beans ‘’brown sold loose” with N848.60, followed by the South-South with N668.07, while the North-East recorded the least with N355.17. Similarly, the South-West recorded the highest average price of Yam tuber with N543.48, followed by the South-South with N541.09, while the lowest was recorded in the North-East with N160.85. The average price of 1kg Rice (local sold loose) was higher in the South-South and the South-West with N532.52 and N511.60 respectively, while the lowest was recorded in the North-East with N404.03.

Consequences

Across the economy as a whole, the amount of money spent on food has increased sharply, wondering how many families have been able to feed appropriately.

As a result, Nigeria’s households say they are now putting strict limits on the amount they spend on food each week. This has drastically affected the monthly budget for foodstuffs for the household.

Not only this, the decision has also affected expenses on other items different from food. Mrs Bolaji Oluokun, a resident of Ojodu area of Lagos State says, “for now we have stopped buying unnecessary things just to concentrate more money for the upkeep of the family. The money we used to buy food for the family at the beginning of the years cannot feed two people, let alone a family of five. So, we have to devote more money to buying foodstuffs.”

The poorest households in the country have been the worst affected, with inflation continuing to move fast forcing people in this bracket to spend a disproportionate amount of their income on food.