Rising inflation has worsened in Nigeria, pushing more people into poverty as the cost of living and purchasing power has shrunk under President Bola Ahmed Tinubu’s administration.
This is as the headline inflation rate rose 24 times in two years to 27.33% in October, driven by food inflation, and jumped from 30.64% in September 2023 to 31.52% in October 2023. .
Prices for food, accommodation, clothing, electricity, education, etc. have all gone through the roof.
Nigeria’s central bank, CBN, was quick to claim that its recent monetary policy is starting to bear fruit, even though it has not held a monetary policy committee meeting since September.
However, food prices have recently increased by at least 20 percent, according to Daily Post market research.
For example, rice mudu goes from 1,500 Naira to 1,700 Naira, beans (red) goes from 800 Naira to 1,100 Naira, 1.4 liters of groundnut oil goes from 2,500 Naira to 3,000 Naira, a loaf of bread goes from 700 Naira to 1,100 Naira, and eggs go from 700 Naira to 1,100 Naira. N2700 to N3000 for crates and N500 to gari (red) N700 for mudu.
Explaining the impact of inflation, Chinedu Odah, a resident of Abuja, said:
“At the same time, education costs are rising, so not only are they struggling to support their families, but they are also facing the struggle to keep their families in different schools despite the increases.
“So, to tell you the truth, I draw strength from this saying: When you’re in trouble, remember that God is too big to be indebted to.
“Given my position and responsibilities within the household, great sacrifices are made to manage running costs.
“A few months ago, we made a budget to cover the basic needs of our family in a week and spent N10,000. Currently, N20,000 is barely enough to cover the same expenses.
“A few months ago, I spent N1,000 daily on transportation to and from work in the central area and my home.Currently, I spend N2,500 traveling from my home to the same center and back. ”
Amina Zakaria, a Kaduna resident, said Odah is not alone, saying her family is living hand-to-mouth because of rising food prices.
“We don’t eat three proper meals anymore. Sometimes it’s one meal, sometimes it’s two meals. Walahi Nigeria is hard on families,” she said.
Nkechi Nwankwo, a resident of Port Harcourt, Rivers State, said, “The price of food is going up day by day and the worst thing is that my income remains the same. You can not.”
This is the lament that comes from the mouths of many Nigerians, both in the North and the South.
According to the World Bank, 4 million Nigerians were pushed into poverty in the first five months of 2023 due to accelerating inflation.
The Washington-based development bank’s data comes months after the Multidimensional Poverty Index, released in November last year, revealed that 133 million people in Nigeria live below the poverty line.
But at the inauguration of President Tinubu, he vowed to bring Nigeria’s economy out of the woods with a mantra of new hope, but months later, Nigerians still do not have the feel-good factor.
Since June this year, the removal of fuel subsidies and liberalization of overseas markets have had a negative impact on the country’s economy.
Although the government announced that its revenue has soared from an average of N650 million a month to more than N1 trillion in the past four months after the subsidy was abolished, the impact on the welfare of Nigerians is yet to be felt.
DAILY POST reported that Nigeria spent over 96% of its 2022 revenue on debt servicing as the country’s total outstanding debt rose to N87.38 trillion in the second quarter of 2023, according to the World Bank.
However, the situation is not bleak as the Nigerian government continues to take “small steps” towards solving economic problems.
The government said it aims to increase the minimum wage in the country from N30,000 to N65,000 per month.
He also pledged to introduce 11,000 compressed natural gas buses to Nigerians to reduce transportation costs, laid out plans to close Nigeria’s N20 trillion tax gap, and recently announced that Stopped remittance of 40% of income.
However, even as the World Bank confirmed partial disbursement of Nigeria’s $800 million fuel subsidy removal mitigation loan, the federal government said it would begin disbursing N75,000 to vulnerable Nigerians. I kept dragging my feet on promises.
The Chairman, Bank Customers Association of Nigeria, Dr. Uju Ogunbunka, said in an interview with DAILY POST on Monday that inflation in the country is hitting Nigerians hard.
He noted that the impact of inflation on Nigerians has been exacerbated by stagnant disposable income despite rising prices of goods and services.
“The truth of the market is that we are all buying from the same market, except for the location of the market, it is the same Nigerian environment.
“Inflation naturally affects prices. If prices rise and available income does not increase, someone has to pay for it. In this case, whoever sells the To recover costs, you become a consumer.
“We all feel it. No one is happy, and no one should be. When your income stagnates and your cost profile quickly increases, you run out of cash.
“Rising inflation is not healthy for the country. We all depend on what we have to buy and our income level.
“Our income is decreasing not only because of inflation but also because of the exchange rate. We are all suffering. We don’t know when it will stop. Unfortunately, we are not producing.
“We pray for an improved business environment, improved incomes and security for Nigerians.
“Right now, we are all feeling the heat. We don’t know when it will stop. Unfortunately, we are not producing enough. Producing for local needs “We pray for a better environment, better incomes and better security. These are difficult times, but Nigerians have ways to survive these difficult times,” he said.
Meanwhile, former chairman of the Chartered Bankers Association of Nigeria, Mazi Okechukwu Unegbu, said food inflation could have risen to nearly 40 per cent.
According to him, the market price of the commodity increases by at least 10-15 percent almost every day.
He said Nigeria’s economic indicators such as foreign exchange, inflation and interest rates were all negative, indicating the state of the country’s economy.
He told DAILY POST:
“Food inflation in Nigeria today is close to 40 percent, which means if you go to the market today and come back the next day, the price of your goods has increased by about 10 to 15 percent.
“General inflation is underreported, probably for political reasons.
“The biggest problem in Nigeria today is the interest rate on borrowing and the debt service to income ratio. Almost all goes to debt service. And the government is borrowing for consumption, not for production.
“Look at other indicators. Foreign exchange, interest rates, inflation rates are negative. You can’t talk about development when economic indicators are not good. Nigeria is not the only country suffering from this problem; It is a rich country that has not been properly depleted.”
As a solution, Unegbu said, “Government should create job opportunities and look at how we can employ Nigerians. We must focus on the issue of production. Why us? Why don’t we produce them? Because we are too lazy to wait for manners to come our way.
“Nigeria should explore mineral resources, widen the tax net rather than increase taxes, and finally, the government should seriously consider how to deal with economic problems, otherwise the country will continue to bleed. It will be.”
Professor Segun Ajibola, a prominent economist and former chairman and chairman of the Chartered Institute of Bankers Council, also said that in the quest for food security in Nigeria, the government must address the challenges faced by Nigeria’s agriculture. He said there is an urgent need to address the hydra-headed issue.
“Of the three major necessities of life, food comes first, followed by food, clothing, and shelter.
“In my place, it is often said that poverty is overcome when hunger is eliminated from poverty. That is why the United Nations, the Food and Agriculture Organization, the World Bank, the African Development Bank and other international organizations are We are investing resources to promote food self-sufficiency.
“In Nigeria, food security has been a key component of every development agenda since the 1970s. After assuming office, President Tinubu rolled out several initiatives to ensure food security in Nigeria.
“This is recognized as a step in the right direction, as countries that cannot feed themselves are at the mercy of other countries.
“There is an urgent need to address some of the hydra-induced challenges facing Nigeria’s quest for agriculture and food security.
“There is a need to put a full stop to the farmer-herder conflict that still ravages most parts of Nigeria, especially the intermediary zone known as Nigeria’s food basket.
“Local food producers need to be encouraged through incentives to reduce operating costs (chemicals, herbicides, fertilizers, tax breaks, storage and other infrastructure, off-takers, etc.). They need to be protected from unfair competition resulting from unlimited imports of food in foreign currency.
“Food imports cannot provide a sustainable solution to food insecurity in Nigeria. Rather, policy should be consistently directed towards import substitution.
“Recent reports say local rice production fell by 20% last month due to recent policy disagreements. Farmers like me who raise chickens and grow palms are also feeling the effects. Masu.
“All of this has combined to slow down local efforts towards food security as they are desperately pursued at all levels,” he told DAILY POST.
Similarly, the CEO of SD&D Capital Management, Idakolo Gbolade, called on the Tinubu government to accelerate economic intervention for Nigerians.
“Inflation in the country is expected to rise due to the federal government’s subsidy removal and exchange rate policy. The continued rise in food inflation is due to ecological problems such as flooding that has affected harvests in some regions. It got even worse.
“The security situation in agricultural areas also affected food inflation. However, the most compelling reason for the rise in the food inflation index is the continued depreciation of the naira, Nigeria’s main factor of production, against the US dollar. It is that you are.
“Government-provided wages are expected to further fuel food inflation and increase widespread poverty.
“The Federal Government must urgently take steps to strengthen the naira and proactively implement agricultural policies across the value chain.
“The government should also accelerate the provision of CNG buses and conversion centers as an alternative to rising petrol prices.
“If the federal government’s economic policies are properly implemented, inflation is likely to slow by mid-2024,” he said.