For the past eleven months, it has been difficult for Nigerians as prices of all items have more than doubled, causing household expenditure to rise by 12 percent in the first half of the year, according to the country’s GDP expenditure and income approach report.
Nigeria’s household consumption expenditure in real terms hit N27.3 trillion in the first half of 2022 as against N24.3 trillion in the corresponding period in 2021, an indication of a 12 percent increase.
According to the report, household consumption accounted for the largest share of real GDP at market prices, representing 76.79 and 78.99 percent in q1 and q2 of 2022 respectively, compared to 74.38 and 69.43 percent in the corresponding quarters of 2021.
The report attributed the increase to the constantly rising costs of goods and services which pushed inflation to a 17-year high of 21.09 percent in October.
The implication, according to some analysts, is that basic household needs have continued to elude Nigerians as prices are said to have doubled.
“With accelerating inflation, the real value of wages will continue to fall and this affects how far salaries go in the day-to-day life of employees,” said Femi Egbesola, national president of the National President, Association of Small Business Owners of Nigeria said in a response to questions.
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“The current cost of living crisis we are experiencing now is one of the worst we have ever had in our history. People cannot feed properly and there are no safety nets for businesses or individuals,” Egbesola said.
Households and businesses have been treading water for decades – weighed down by dwindling income and rising prices – but the spike in inflation is sending more than a ripple of frustrations among Nigerians.
Globally, countries have been facing rising energy and food costs, largely driven by the Russian-Ukraine war. But in Nigeria, worsening insecurity and climate change have also reduced food production, adding to upward price pressure and compounding the problem for families.
Over 105 million Nigerians still live in extreme poverty, according to data from the World Poverty Clock of the Brookings Institute. The World Bank recently projected that Nigeria’s accelerating inflation will push an additional 7 million into poverty by the end of 2022 in its report ‘The Continuing Urgency of Business Unusual.’
While it would appear that the economy has improved, culminating in a 3.54 percent growth in the second quarter of 2022, most of it is elusive. It is eluding a vast majority of Nigerians and has not been able to reduce poverty or lead to the creation of sufficient jobs.
“Survival is the most difficult thing in Nigeria now irrespective of whether you are in the upper, middle or lower income class as there is no source of income the surging inflation is not affecting,” Benson Salami-Olayanju, chairman of Panfcm-Tech-Wise Treasure Investment said.
“We are experiencing cost-push inflation and it is fast eroding incomes,” he said. He urged the government to tackle the surge in food prices to tame inflation, noting that households spend over 50 percent of their monthly income on food.
