As the price of items keep making rapid climbs, Nigerians are now cutting back on purchases of non-essential items to survive amid the current economic hardship.
This, according to experts, will add to the gloom that has descended on the country’s retail sector as consumers struggle to cope with high borrowing costs coupled with high food and fuel costs.
Inventory of unsold products in the manufacturing sector rose to N272 billion in the first half of 2023 from N187.1 billion in the same period of last year, the Manufacturer Association of Nigeria’s half-yearly review report shows.
MAN attributed the increase in inventory to weakened consumer purchasing power, brought about by diminishing real household income resulting from the ongoing escalation of inflationary pressures and the aftermath of the subsidy removal.
Also, business activity dropped to the lowest in eight months to 48 points in November, according to the latest monthly PMI report by Stanbic IBTC Bank.
“Companies in Nigeria continued to be negatively impacted by strong inflationary pressures in November, with new orders and output both falling as customers were either reluctant or unable to pay higher charges,” the PMI report said.
BusinessDay conducted a series of interviews with individuals to ascertain how they are surviving and many stated that they are cutting down on purchases to survive the amplifying cost of living crisis.
“I have seriously cut down on non-essentials. I buy only what is essential to me nowadays as prices keep surging. My salary has been the same for the last five years,” said a consumer who simply gave her name as Amaka.
“The economic situation is getting worse and there is no sign things will improve soon. So we have to be wise in our spending and buy only what is needed,” she added.
Food inflation, which makes up the bulk of Nigeria’s inflation basket, has increasingly quickened to 31.5 percent in October from 30.64 percent in September, amplifying the cost of living crisis in the country.
Nigeria currently has 133 million multi-dimensionally poor people, representing 63 percent of the nation’s total population of 211 million individuals, according to the 2022 Multidimensional Poverty Index (MPI) report by the National Bureau of Statistics (NBS).
The World Bank, in its latest Nigeria Development Update report for June 2023, said the loss of purchasing power from high inflation has increased poverty in the short term, pushing an estimated four million Nigerians into poverty between January – May 2023.
The global bank estimates based on the National Bureau of Statistics (NBS) data show that 89.8 million Nigerians fell below the poverty line at the start of 2023, with an additional four million making it 93.8 million in May of 2023.
“Right now, I only purchase essential items. We usually take the children out every weekend to visit parks but we have stopped doing that since April because we cannot afford it any longer and it is not essential,” Olumide Ajayi, a teacher at a top secondary school in Ogba said.