When Yemisi Adegoroye, a teacher and a mother of two, received a letter from the lawyer that manages the property in which she rented an apartment, she felt a spurt of anger bubble up when she read that her landlord was raising her two-bedroom apartment rent by 40 percent to N700,000 annually.
Yemisi and her husband, an accountant, who earn about N3.6 million yearly, could not stomach the steep rise in their rent. They have to pay their children’s school fees, utility bills, and spend on food items, whose prices are also rising.
“With this recent increase in our rent and continuous rise in the prices of everything, things are getting difficult for us,” she said. “The worst of it all is that our income has remained the same, despite paying for more of everything you need.”
Agbeleye Adebisi, a 23-year-old undergraduate – who is seeing himself through school, saw his anger rise when he realised just how much more he would now need to save to pay his tuition and pay the rent for his accommodation.
“I deliberately skip meals to save more for my school,” Adebisi said.
“I used to stay alone, but my landlord just increased our rent. I have to pay double what I paid before. I can’t afford to do that now as my expenses keep rising, so I was forced to get a roommate to split the cost,” he added.
Vincent Okeke, a 42-year-old fuel attendant who lives in a suburb of Ikorodu, had to change his children’s schools from private to public as he could no longer afford to pay their school fees, which have risen by 20 percent since the first term in 2021.
“The school authority said they had to increase fees owing to the rise in the prices of learning materials and I cannot afford any additional increase,” he said.
From the farmer in the northern city of Borno to the business owner and working-class down South in Aba and Lagos, households and businesses across Nigeria are weighed down by stalled income growth and rising prices of goods and services.
The accelerating inflation in Africa’s biggest economy, a consequence of the COVID-19 pandemic, the global supply-chain disruptions caused by Russian-Ukraine war, weak naira, and escalating insecurity that has put a strain on the country’s agricultural output, have forced many Nigerians to change their consumption patterns.
The situation is worse for most Nigerians living from hand to mouth, which means they spend virtually everything they earn to sustain themselves daily, and there’s little or no spare cash to tuck away in a savings account.
What’s worse is that some Nigerians are facing their inflation struggles without jobs.
The unemployment rate surged to a record 33.3 percent in the fourth quarter (Q4) of 2021 from 27.1 percent in Q2 2020, according to the National Bureau of Statistics (NBS). That number may have grown worse on account of the forced closure of some companies that were driven out of business by rising costs of operation.
Lamidi Habeeb, who was laid off in December 2021 after his employers shut down their poultry farm, has struggled on all fronts since then, whether to feed his family or for daily expenses.
“My priority is ensuring we eat and the rising cost of everything is driving me crazy,” he said. In April, the NBS reported that inflation hit 16.82 percent in April 2022, with core inflation accelerating at the fastest pace in four years.
The situation is the same for small businesses. Despite the compelling potential of SMEs, running small businesses in Nigeria is tough. Energy and bad road networks remain big infrastructural challenges in Nigeria, coupled with increasing operational costs for small businesses, especially with the hike in electricity tariffs and diesel.
Foreign exchange volatility has also played a major role in hampering the growth of small businesses as the country remains import-dependent.
Read also: Nigeria’s rising inflation poses threat to consumer spending – Fitch
“The constant rise in our cost of production has been super draining mentally as we constantly develop means to cut costs,” said Arinola Okeowo, chief executive of Ultra Farms.
BusinessDay interviewed dozens of businesses across the country in various sectors and the pain and frustration are the same. Sales have dropped significantly, with many entrepreneurs seeing over 50 percent drop in their margins.
Omowumi Afolashade, head baker at The Sweet Treat Paradise, which makes cakes, said her production had dropped by 55 percent due to low demand occasioned by the worsening economy.
“The recent surge in the prices of key inputs such as sugar and flour has shot up our production cost, thus making it more difficult to make profit. The purchasing power is still low as sales have not picked up like before,” Afolashade said.
For Ijeom Ezikpe, creative director of Chez-Ijay, her revenue has dropped by 50 percent because of low patronage.
“Inflation is affecting our revenue and creating business uncertainty,” she said. “Due to the rising cost of production, we have increased prices of all our products and it has resulted in a decline in our sales,” she added.
For Agoro Olajumoke Adunni, chief executive of Dunnispot Catering Services, the business revenue has dropped despite operating in an essential service industry.
“Our sales have not improved because the standard of living for an average Nigerian is high and people are working with budgets,” she said.
With the recent hike of the Monetary Policy Rate to 13 percent from 11.5 percent, with deposit money banks charging 20-30 percent interest rate per annum, the woes of small businesses will be further compounded, stakeholders including the Lagos Chamber of Commerce and Industry has said.
