BusinessDay

Insecurity, rising prices hit leisure spots in Nigeria

As the economic headwinds triggered by high inflation, insecurity, and currency depreciation continue to take a toll on businesses in Nigeria, owners of bars and lounges are lamenting low patronage.

James Mbah, CEO of Full House Bar and Lounge at Festac, Lagos, said sales have significantly decreased compared to last year.

According to him, customers are no longer coming as before because people are now economising.

He said weekends when they usually made around 80 percent in sales had seen a dramatic decrease to 60 percent.

“The increase of drinks and other things we sell here is not just the problem; the major problem we are facing is the diesel price, fuel, and electricity bill,” Mbah said. “For the increased price in beers, wine, catfish and other things can be adjusted to the customer but the diesel and fuel prices are taken from the company account which can ruin the business.”

According to the National Bureau of Statistics, the annual inflation rate in Nigeria accelerated to a 17-year high of 20.52 percent in August of 2022 from 19.64 percent in the previous month. Food inflation quickened to 23.12 percent from 22.02 percent in July.

Read also: Likely slowdown in inflation ahead, but how many small businesses will survive?

Diesel price has also increased from about N260 per litre last year to over N800 in some parts of Nigeria, putting unprecedented stress on the economy, and threatening businesses in the country.

“People currently only come when they have money, and they must calculate how many drinks they will consume before arriving. We have not fully recovered from the Covid, and now we are being hit by inflation,” said Johnson Apatti, manager of Bugatti NightClub and Bar at Amuwo.

Apatti said the nightclub used to make N1 million per day, but the revenue had dropped. He said the new method that had paved the way for them was to collect drinks from distributors on credit.

The hike in inflation means the purchasing power of Nigerian consumers, some of whom live on a minimum wage of N30,000 ($43.35) per month, is being eroded.

Tochukwu Ilor, manager of SV Lunch and Cocktail at Lekki, said people now minimise their spending. “February and May were the last time we had good sales since then it has been low.”

He said the current exchange rate is causing a rise in goods prices because Nigeria is producing less and importing more. The company’s loss has also been exacerbated by the high cost of diesel, fuel, and electricity, he said.

“It would be beneficial if the government looked into this as well as the agriculture sector,” he added.

Between 2019 and 2021, beer makers have increased prices more than twice due to high excise duty, a levy on the manufacture of locally produced goods.

Ifeanyi Akano, manager of NV Lounge Bar and Nightclub at Owerri, sees insecurity as the main reason why people don’t come out often as they used to.

“With reports of killings, arson, and abductions, Imo State has become a hotbed of insecurity in the South-East. Innocent people are being killed, and public and private property is being burned. People are now afraid to spend late nights with their families in the lounge,” he added.

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