The recent increased in the Naira’s value against the US Dollar, spurred by policy adjustments from the Central Bank of Nigeria, has not led to a significant change in the prices of essential goods and services. But it is worrisome that while the Naira recovers, with the dollar selling at N900 in the parallel and official markets, the cost of living for Nigerians remains high. Juliet Jacob examines the development
NBS’Data
According to the latest report from the National Bureau of Statistics (NBS) March 2024 witnesses a notable rise to 33.20%. This marks a significant increase of 1.50% points from February’s 31.70%.
“Year-on-year, March 2024’s inflation rate stands 11.16% points higher than the same period in 2023, which recorded 22.04% inflation. Despite a slight month-on-month decline, with March 2024 showing a 3.02% increase compared to February’s 3.12%, the overall inflationary pressure remains evident.
In response to these escalating inflationary pressures, the Monetary Policy Committee made the decision to raise interest rates from 22.75% to 24.75%, signaling concerted efforts to address the issue.
Despite the Nigerian Naira’s commendable appreciation by over 40%, from approximately N1,900/$ to around N1,100/$1, inflationary trends persist, underscoring the complexity of the economic challenges facing the nation.
Disturbing Signals
Earlier reports from January had already indicated a worrying increment, with Nigeria’s average inflation rate reaching 29.90%. As policymakers navigate these economic challenges, vigilance remains paramount in addressing the multifaceted factors contributing to inflationary pressures.
Interview with African Health Report Reveals Unyielding Prices
A recent market survey conducted by the African Health Report unveils a persistent trend of high prices across various food items.
High Cost of Goods and Services Despite Naira Gains
Despite the strengthening Naira, consumers continue to grapple with soaring costs. For instance, medium-sized sliced bread, previously priced at N700, now stands at N1,500. Similarly, the price of an egg has risen from N70 to N200, while a crate of eggs now costs N4,000, up from N2,500. Notably, parboiled rice in a 50 kg bag that you used be ranges from N8,000 during Goodluck Ebele Jonathan
Former President of Nigeria, has increased to N85,000, compared to N77,000 to N80,000 in February.
Insights from Market Vendors
Vendor Cynthia Agor, from Dutse market in the FCT acknowledges the decrease in the dollar’s value but notes that the price of rice remains stubbornly high. She attributes this to the challenges of maintaining product quality amidst infrastructure deficiencies.
Uche, another trader, echoes these sentiments, highlighting the burdensome costs associated with maintaining refrigeration, especially with the rising price of diesel due to power shortages.
Nigerian Consumers Grapple with Soaring Prices
Mrs. Ajiego Vicky, a concerned citizen, expressed dismay over the sudden surge in the price of LACTOGEN milk, lamenting, “I bought it 4200 on 29th of March. Guess what, I bought it 5300 yesterday in the same store.”
Meanwhile, Mrs. Aminu Zuni voiced her frustration over the skyrocketing cost of Fair and White cream, exclaiming, “Fair and white cream (so white) jumped from 12k to 22k. Kilode? What is happening?”
The ripple effects of these price hikes extend beyond just milk and skincare products. Basic food items, like flour and groundnut, have also experienced significant inflation. “I bought flour last Saturday 53k, I went today price has increased to 53500,” lamented a disgruntled consumer.
Further exacerbating the situation is the volatility of the exchange rate. A shopper recounted a conversation with a vendor: “I told aboki that dollar don come down na, aboki say I want pay with Dollar.”
However, it’s not just the fluctuating dollar that’s to blame. As one consumer astutely observed, “Because the problem is not the dollar only but transportation cost and many not being able to farm in a long time because of insecurity.”
Insecurity has emerged as a critical factor contributing to the escalation of prices. “The next most important thing to do to help cut down the cost of living is to bring insecurity to the barest minimum,” emphasized a concerned citizen. “So that people can go to the farm without being kidnapped or killed, and also to cut down the cost of fuel so that foodstuffs can be conveyed across the Nation without cutthroat cost.”
In a similar report Nigerians lamented they are yet to feel the naira gain.
We’re Yet to See Naira Gain – Nigerians
Nigerians have lamented that despite the massive appreciation of naira against foreign currencies in recent times, prices of food items and goods have not crashed.
They spoke in response to a question asking people to indicate what has reduced as a result of the recent appreciation of naira.
This is against reports that naira has gained massively in recent times following aggressive defence of the local currency against the dollar by the Central Bank of Nigeria.
The dollar, which almost hit the N2,000 mark a few weeks ago, has crashed to about N1,150 at the parallel market.
At the time the naira was experiencing a free fall, prices of food items and imported goods spiraled out of control, worsening the cost of living crisis in Nigeria.
But “have the prices of essential goods reduced in your area as a result of the naira gain?” Many Nigerians said they are yet to see the result.
They, however, hoped that things would begin to come down if the government continues on the present course.
Moreover, there are suspicions that the government’s strategy of allowing the dollar to fall temporarily is linked to negotiations with the Nigerian Labour Congress (NLC) over minimum wage implementation. “Dollar falling is a strategy used by the government to see that NLC accepts what they have to offer for minimum wage implementation,” one citizen opined.
The repercussions of these economic challenges are felt deeply by ordinary Nigerians. “My problem gan gan na ” exclaimed one frustrated shopper, highlighting the exorbitant prices of everyday items like pepper, garri, and plantain.
In addition to the direct impact on consumers, the soaring prices have implications for the broader economy. “Cost of production is high… electricity… fuel… cost of transporting too, all these contribute,” noted a concerned citizen.
As the cost of living continues to climb, the resilience of Nigerian families is put to the test. “Seriously it is getting tougher and more frustrating,” expressed one individual. “I wonder how a family of 5 is surviving.”
In the face of adversity, Nigerians remain steadfast in their faith and hope for a brighter future. “It is well. God no go shame us,” echoed the sentiments of many.
Indeed, as Nigeria grapples with unprecedented economic challenges, the resilience and ingenuity of its people are being put to the ultimate test. Only time will tell whether the nation can overcome these obstacles and emerge stronger on the other side.
“Because the problem is not the dollar only but transportation cost and many not being able to farm in a long time because of insecurity.” – Concerned Citizen
Economists Forecast Delayed Impact
Economists such as Ayo Teriba and Adeola Adenikinju shed light on the delayed effects of the Naira’s strengthening on commodity prices.
Teriba explains that prices are still tethered to previous exchange rates, with the adjustment period ranging from a month to a quarter.
Adenikinju emphasizes that current high-priced stocks must be depleted before prices can reflect the Naira’s newfound strength.
Additionally, market expectations, as outlined by economist Mr. Dived, contribute to a lag effect in price adjustments, as producers cautiously monitor market conditions before making changes.
