• Wednesday, June 12, 2024
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Nigerians tighten belts for Christmas as inflation bites

Nigerians tighten belts for Christmas as inflation bites

Chinyere Chukwu has visited two markets in Lagos in search of a bag of rice and a carton of vegetable oil she can afford, but with food prices surging daily, she fears her family would have to do without sharing it with families and friends this festive season.

“Every Christmas, I usually buy a bag of rice and a carton of vegetable oil to share with family members and friends. But the prices are way too high now, so I won’t be doing that this year,” the 50-year-old teacher and a mother of five who was at Mile 12 Market to make purchases, told BusinessDay.

“You can imagine buying a five-litre carton of vegetable oil I bought for N19,000 last year now N38,000,” she asked, “I have decided to buy a smaller quantity for just my immediate family.”

For the first time in 31 years, Chisom Onyebuchi, an accountant with a consultancy agency in Ikeja, will be celebrating Christmas in Lagos.

She has been in search of a cheap transportation fare to Aba, Abia State, since last Friday when her office closed for the season and she is still unable to find any within her budget.

She has decided to cancel her plans of travelling to the village for Christmas.

“I usually travel to spend Christmas with my parents but I can’t anymore as I couldn’t get a price within my budget to make the trip,” she said, saying, “My organisation has refused to review our salaries to present-day reality. If I don’t manage what I have for this festive season, I might run into debt next year.”

Like millions of Nigerians, Chukwu and Onyebuchi are feeling the pinch of inflation, a consequence of pandemic-induced global supply-chain disruptions, weakening naira and escalating insecurity.

Inflationary pressure is changing shopping habits and spoiling traditions for many Nigerians. For lower-income households with little or no cash cushions, they are making harder choices such as whether to celebrate Christmas or not, and what should and not be on their menu for the season.

“Bigger and more expensive import demand brands are not going to sell much this Christmas owing to inflation, as people will go more for the locally produced and affordable variants,” Uchenna Uzo, consumer expert and faculty director at the Lagos Business School, noted.

“People are going to just make do with what they can afford. Gifting is also going to be there but not at a large scale this Christmas period.”

Read also: Diva rice accuses distributors of price inflation, threatens to cancel contracts

Nigeria’s naira has lost about 8.4 percent of its value in 2021, owing to a controlled exchange-rate management, bleak oil future and the pandemic impact.

The country’s foreign exchange management has attracted criticism from the World Bank and different quarters.

The World Bank had in November urged the central bank to improve its exchange-rate management in order to speed up other reforms, adding that the naira’s black market premium was fuelling inflation.

With oil price fluctuations, foreign exchange inflows have declined by over 40 percent in the last two years, resulting in acute dollar scarcity in the economy.

However, the government has focused on the demand side, which has led to worsening scarcity that has further widened inflation and inequality.

“It has been difficult for Nigerians and purchasing power keeps eroding. People can hardly feed properly owing to the current economic situation we are experiencing,” Abiodun Olorundenro, manager, Aquashoots, said.

Also, food production has been greatly impacted in 2021 as farmers in the country have had to abandon their farmlands owing to escalating issues of kidnapping, banditry and terrorism in major crops-producing states, leading to production shortfall.

However, the country’s inflation has slowed for eight straight months to 15.40 percent in November 2021, but still surpasses the central bank’s single-digit target.

Ayodele Akinwunmi, senior relationship manager, corporate banking group, FSDH Merchant Bank, said he was not sure consumers had a good year, noting, “Incomes did not grow, inflation was high and as such what consumers could afford last year or two years ago, they are not able to afford again.”