Nigeria’s growing inflation continues to bite deeper, forcing more individuals into poverty as the cost of living and purchasing power diminishes under President Bola Ahmed Tinubu’s administration.
This is because food price inflation jumped to 31.52 percent in October 2023 from 30.64 percent in September 2023, contributing to a 24-fold increase in headline inflation over the same time period.
Prices for everything from groceries to rent to apparel to utilities to tuition have skyrocketed.
Despite not convening a Monetary Policy Committee meeting since September, the Central Bank of Nigeria, CBN, has immediately claimed that its recent monetary policy has begun showing benefits.
However, a MISMOB study of local markets revealed that grocery costs have increased by at least 20% in recent weeks.
Some examples of this are the increase from N1,500 to N1,700 for a mudu of rice, from N800 to N1100 for a mudu of beans, from N2500 to N3,000 for 1.4 liters of groundnut oil, from N700 to N1100 for a loaf of bread, from 2700 to 3000 for a crate of eggs, and from N500 to N700 for a mudu of garri (Red).
According to Abuja resident Chinedu Odah, inflation has forced him into “daily survival mode” due to the rising cost of living.
“At the same time, the expense of education is rising, making it not only difficult for me to provide for my family’s basic needs, but also to fight to keep them enrolled in their various schools despite the increase.
When things seem hopeless, I remind myself that God is too large to owe me anything.
Because of my status and the weight of my responsibilities at home, I have had to make significant personal sacrifices to keep up with the expense of living.
A few months ago, we set aside and spent N10,000 on a weekly budget to cover food, shelter, and clothing for the family. In the present day, N20,000 hardly covers the same expenses.
“Months ago, I spent N1,000 for everyday transportation to work in the Central Area and back home. Getting from my home to the same Central Area and back costs me N2,500 right now.
Like Odah, Amina Zakaria of Kaduna laments that the recent increase in food prices has left her family struggling to make ends meet.
She lamented, “Walahi Nigeria is hard for my family. We no longer eat three square meals; sometimes it’s one, and other times it’s two.”
The worst part is that my income has stayed the same, but the costs of food products are growing every day,” said Nkechi Nwankwo, a resident of Port Harcourt, Rivers State. Coins have worth, too. The market is closed, so no one can buy anything.
Many people in Nigeria, both North and South, express this sentiment.
The World Bank estimates that four million Nigerians fell into poverty due to rising prices in the first five months of 2023.
Months after the multidimensional poverty index released in November of last year found that 133 million people in Nigeria were living below the poverty line, data from the Washington-based development bank confirmed this.
But following the emergence of President Tinubu, he claimed to pull Nigeria’s economy out of the woods with his renewed hope mantra, but months down the line, Nigerians are still to enjoy the feelgood factor.
Since June of this year, the withdrawal of fuel subsidies and liberalization of overseas markets have had a detrimental effect on the economy.
Though the government maintained that after subsidy removal, its revenue surged from an average of N650 million monthly to over N1 trillion in the previous four months, the impact on the well-being of Nigerians is yet to be felt.
According to the World Bank, Nigeria spent over 96% of its revenue on debt servicing in 2022, and by the second quarter of 2023, the country’s total debt stocks had risen to N87.38 trillion. This was reported by MISMOB.
The administration, however, is ‘taking small efforts’ to address the country’s economic woes, so all is not doom and gloom in Nigeria.
The government has announced plans to raise the minimum wage in the country from N30,000 per month to N65,000.
It has also delayed the 40% transfer of internally generated money by Nigerian colleges, planned to roll out 11,000 CNG buses to lower transportation expenses, and aims to eliminate the country’s N20 trillion tax gap.
Despite the World Bank’s confirmation of disbursing a portion of Nigeria’s $800 million gasoline subsidy removal palliatives loan, the federal government has been slow to begin payments of N75,000 to needy Nigerians.
Dr. Uju Ogunbunka, President of the Bank Customers’ Association of Nigeria, told DAILY POST on Monday that Nigerians are feeling the effects of inflation deeply.
He pointed out that even while prices have gone up, people’s take-home pay has not, which compounds the hardships caused by inflation in Nigeria.
“The truth of the market is that we are all buying from the same market, except for various locations, but it is the same Nigerian atmosphere.
Price increases are influenced by inflation naturally. Once prices are increasing and available revenue isn’t increasing, somebody has to pay for it; in that instance, it is the customer because whoever is selling would assure he/she recovers the cost.
Everybody knows that, and rightly so: nobody is content. Cash flow problems arise when income remains flat while costs are expected to rise rapidly.
“The increase of inflation is not healthy in a country. What we have to buy and the quantity of income affects everyone.
Both inflation and fluctuations in exchange rates have contributed to a decline in disposable income. Everyone is in pain, and I have no idea when it will end. We are not yet in production, unfortunately.
We hope and pray that Nigeria’s business climate improves along with the country’s income and safety.
“For now, all of us are feeling the heat. When this will end is anyone’s guess. Regrettably, our output falls short of meeting even our domestic requirements. We hope for a better economy, more peace, and a safer world. “It’s a tough time, but Nigerians always find a way to make it through,” he remarked.
Food inflation may have reached around 40%, according to former president of the Chartered Institute of Bankers of Nigeria, Mazi Okechukwu Unegbu.
He claims that market prices for items rise by at least 10%-15% per day.
He said that the status of the Nigerian economy could be gauged by the country’s negative foreign exchange, inflation, and interest rates.
He told MISMOB: “What the National Bureau of Statistics brought out is late for me since some of us retain our records.
If you went to the market today and came back tomorrow, the prices of commodities would have climbed by roughly 10 or 15 percent, as food inflation in Nigeria is currently hovering around 40%.
Perhaps for political reasons, inflation as a whole is underreported.
“Now, in Nigeria today, the largest concern is the borrowing rate and debt service to income ratio; practically everything goes to debt servicing. And then the government is using the money for spending rather than investing in infrastructure or manufacturing.
“Look at the other statistics; the foreign currency, interest, and inflation rates are negative. When economic data are unfavorable, discussion of progress is meaningless. This problem is not unique to Nigeria, but the country is rich in resources and is not using them efficiently.
As a solution, Unegbu added, “Government should offer employment possibilities, examine how we can employ Nigerians; we must stress on the subject of production; why are we not producing? Why? Because we’re too slack to force ourselves to be polite.
The leadership of Nigeria had to “put their head down to see how to address our economic problems,” as one commentator put it, “or else the country would continue to bleed.”
Prof. Segun Ajibola, a well-respected economist who once served as President and Chairman of the Council of the Chartered Institute of Bankers, added that, for Nigeria to achieve food security, the federal government must immediately address the myriad challenges facing the country’s agricultural sector.
“Food is the most important of the three requirements of life.
The elimination of hunger is often used as proof that poverty has been eliminated where I come from. That’s why the UN, FAO, World Bank, AfDB, and other international organizations are spending so much money to ensure that everyone has enough to eat.
Since the 1970s, food security has been an essential part of every government program in Nigeria’s effort to improve the country. Upon taking office, President Tinubu introduced measures meant to ensure Nigeria’s food supply.
A nation that can’t feed itself is at the mercy of other nations, thus this is seen as a positive development.
A number of issues plaguing Nigerian agriculture and the country’s efforts to achieve food security must be addressed immediately.
The middle belt, often known as Nigeria’s breadbasket, has been hit particularly hard by the ongoing farmers’ and herders’ wars.
Incentives (chemicals, herbicides, fertilisers, tax discounts, storage and other infrastructures, off-takers, etc.) to lower the operational costs of local food growers are required. They must be shielded from the unfair competition caused by unrestrained food imports in a time of high food prices and low foreign exchange reserves.
There is no long-term answer to Nigeria’s food crisis that can be achieved through importation of food. Instead, policy should be continuously geared toward import substitution.
Recent policy inconsistencies reportedly led to a 20% drop in local rice production last month. Farmers like myself who raise chickens and palm fruits and vegetables are also suffering.
“All these put together slow down local efforts towards food security as they are desperately being canvassed at all levels,
In a similar vein, Mr. Idakolo Gbolade, CEO of SD & D Capital Management, has urged the Tinubu administration to hasten its economic intervention on Nigerians’ behalf.
The Federal government’s elimination of subsidies and its foreign exchange policies are likely to exacerbate inflation in the country. Environmental issues, such as floods, which reduced harvests in some areas contributed to the persistent increase in food prices.
Security concerns in rural regions contributed to higher food prices. However, the continuing depreciation of the Naira against the US dollar, a significant factor of production in Nigeria, is the most convincing explanation for the increase in the food inflation index.
It is predicted that food price inflation will rise as a result of government wage awards, and that chronic poverty will worsen.
“The Federal government needs to swiftly put measures in place to support the Naira and aggressively implement its agricultural policies across the value chains.
To combat the rising cost of gasoline, the government should expedite the rollout of compressed natural gas (CNG) buses and conversion centers.
He predicted that inflation would begin to decline by the middle of 2024 if the government’s economic measures were well executed.
Mismob Media