Nigerians’ cost of living has intensified as food prices surged to the highest in eight months, a BusinessDay analysis shows.
According to the recent Consumer Price Index report by the National Bureau of Statistics (NBS), food inflation also known as food prices increased month-on-month by 2.01 percent to 19.50 percent in May 2022, the highest in eight months from 18.37 percent in the previous month.
The rise in the food index was caused by increases in prices of Bread and cereals, Food products, Potatoes, yam, and other tubers, Wine, Fish, Meat, and Oils.
Experts say that the surge in food prices which can be attributed to the Russian-Ukraine war is eroding consumers’ purchasing power, worsening diet requirements thereby leading to a rise in poverty levels.
“In 2021, Nigerian consumers spent 59 percent of their total expenditure on food and non-alcoholic beverages, making them highly vulnerable to rise in food prices,” Lan Ha, economy, finance and trade manager at Euromonitor International said
She added that high inflation and subdued economic growth will overall hurt consumer spending power in Nigeria, with total consumer expenditure being forecast to contract by 1.3 percent in 2022 and 0.3 percent in 2023 in real terms.
Damilola Adewale, a Lagos-based economic analyst also said that spending more on consumption activities means fewer resources for savings and investments. “The funds will be devoted more to basic food, transport which will be even worse for people who don’t have sustainable incomes.”
The NBS report also highlighted that on a month-on-month basis, Rivers (3.65 percent), Abia (3.31 percent), and Ogun (3.23 percent) had the highest food inflation rate, while Yobe (0.01 percent), Osun (0.76 percent), and Jigawa (0.81 percent) recorded the slowest rise.
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On a year-on-year basis, the highest were Kogi (22.79 percent), Akwa Ibom (22.47 percent), and Kwara (22.21 percent), while Kaduna (16.46 percent), Anambra (16.54 percent), and Jigawa (16.91 percent) recorded the slowest rise
Food takes up to almost 60percent of the household expenditure. In 2019, total household expenditure in Nigeria stood at N40 trillion out of which N22. 7 trillion is spent on food alone, data from the NBS survey shows.
In a recent tweet, Financial Derivatives Company Limited explained that a noticeable trend from their market survey showed that commodity prices are increasing at a faster pace for food items than in non-food baskets.
“The increase in food prices reflects the effect of the Russia-Ukraine war induced supply chain disruption, rising energy cost, seasonality, and global inflation,” the company tweeted.
A university student who only wants to be known as Folake told BusinessDay in an interview that the rising food has forced her to forgo some food items and move on with her life.
I haven’t bought turkey since it cost N3, 200 per Kilo. I stopped buying sardine when it became N380.”
Apart from the rise in food inflation, the general headline inflation also increased by 1.78 percent to 17.71 percent in May, the highest in 11 months (July 2021) from 16.82 percent in April.
Ayodeji Ebo, the managing director/chief business officer at Optimus by Afrinvest limited noted that it is not an interesting time for Nigerians as they are struggling to survive. “The cost of living is going up which is impacting on their standard of living.”
Before inflation started rising steadily, there were 82.9 million poor Nigerians but the number has risen to 90.1 million in 2021 and is projected to hit 95.1 million in 2022, a recent World Bank report shows.
