Nigeria’s inflation rate which has surged to the highest in 17 years is dampening the festive mood for cash-strapped consumers.
Anita Macaulay, a 19-year-old, told BusinessDay that her family’s Christmas spirit has been dulled due to an increase in prices of goods and services.
“My aunt stopped buying basmati rice a few months back. It will be our first Christmas in four years eating some other variety of rice,” she said.
Another lady who refused to disclose her identity also said she won’t be feasting for both Christmas and New Year as she can only afford to mark one of the occasions.
“I will be cooking only on New Year’s Day when my siblings are around and eating out on Christmas. I cannot afford to cook on both days; things are very expensive, and this year I’m buying half of what I normally do,” she said.
Data from the National Bureau of Statistic (NBS) shows that the Consumer Price Index also known as inflation rate rose for the 10th straight month to 21.47 percent in November from 15.60 percent in January due to the Russian-Ukraine war.
Food inflation which constitutes more than 50 percent of the inflation rate also rose for the ninth straight month to 24.13 percent, from 17.11 in February.
The surge in inflation rate led to a 12 percent increase in household consumption expenditure to N27.3 trillion in the first half of 2022, the highest in five years, from N24.3 trillion in the corresponding period of 2021, according to NBS.
This has made many Nigerians to be poorer than they were in 2021, with 63 percent of the population (133 million) suffering from multidimensional poverty.
Recently, the World Bank said the country’s accelerated inflation growth has eroded the N30, 000 minimum wage by 55 percent, widening the poverty net with an estimated five million people in 2022.
“Inflation has surged to 21.47 percent in November, pushing as many as five million more Nigerians into poverty since the start of 2022,” it said.
It also said that fiscal pressures have intensified, exacerbated by the soaring cost of the petrol subsidy which will likely exceed five trillion naira this year.
Christmas is a bit different this year for her family because of the cost of living crisis, said Fidelia Nwosu, a mother of three.
Her first daughter – Dorlin Nwosu, a senior secondary school student, explained to BusinessDay the family’s financial struggle during this festive season.
Read also: Inflation forces Nigerian households to cut Christmas spend
“I would usually see my mum from this time buy food items and provisions in more quantities than we needed. She had thought that Christmas was the most perfect season to exercise oneself in gift-giving and love sharing,” she said.
“However, we barely have enough to give this year. You can see for yourself that we are not having the usual blissful Christmas atmosphere,” she said. “It is not just for my family but for most families.”
According to a consumer pulse survey conducted in October by Pierrine Consulting, a specialist tech-first marketing research and strategy firm, consumers currently run on budgets, practise reducing expenses, and have savings to sustain high living costs.
“When asked how they manage their disposable income, living on a budget, reducing the number of goods purchased, avoiding unplanned spending, and reducing expenses were top of the list of things they do to manage their incomes,” the report said.
Other methods are buying in bulk, buying on credit, joining food clubs (cow-sharing, tomato basket sharing, bag sharing, etc.), and buying a cheaper brand.
“Rising inflation in recent periods has been having a negative effect on the prices of goods and services; it is having a spillover effect on people and what is seriously affected are people’s savings,” said Moses Ojo, a Lagos-based economic analyst.
Ojo said a significant proportion of people’s earnings are going to utilities and little or nothing goes to savings.
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