Nigerians were already struggling with surging prices of goods and services before the Russian-Ukraine war. The ripple effect of the conflict has intensified the hardship many people are facing in Nigeria, with prices increasing further in the weeks since the war started.
Already, the World Bank, in its Commodity Markets Outlook, forecasts that energy and non-energy-based commodity prices will be up by about 50 percent and 20 percent respectively in 2022.
A major area of impact in Nigeria has been food prices, since both countries at war are major producers and exporters of agricultural commodities, particularly grains, and countries like Nigeria depend heavily on them for inputs in direct human consumption and industrial processing.
“The development has added more strain on consumers’ finances, with their purchasing power becoming weaker,” Damilola Adewale, a Lagos-based economic analyst, said.
Ayodeji Ebo, 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.”
Nigeria’s exit from recession in 2017 and 2020 has failed to lead to improvement in the living condition of Nigerians as rising prices and low incomes continue to impact their purchasing power, making them poorer.
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.
In Nigeria, here are six commodities people now pay more for on account of the war.
Wheat: bread, noodles, pasta, pastries and others items derived from it
Nigeria depends largely on imported wheat for the production of its highly consumed products such as noodles, pasta, cakes and other confectioneries.
According to the National Bureau of Statistics, the country imported N124 billion worth of wheat from Russia in the first nine months of 2021.
Since the conflict, prices of these commodities have increased. For example, the price of a 70g noodles rose to N100 from N70, the price of a 500g sliced bread rose to N500 from N400 and a 500g Golden penny now costs N400 from N320.
Fertiliser: The less farmers produce, the more food costs
Fertiliser prices have surged further since the outbreak of the war as Russia is a major exporter of the product to other countries.
The average price of a 50kg bag of NPK – a critical type of fertiliser mainly used by smallholder farmers – has surged by 181.3 percent to N22,500 from N8,000 last year.
While the price of a 50kg bag of urea fertiliser has also jumped by as much as 183 percent to an average of N17,000 from N6,000 last year.
Fertiliser, an essential input, accounts for 50 percent of food production. And because of this, experts say the high prices could translate into higher production costs and eventually into higher food prices, making more people poorer especially in Nigeria.
“With prices of fertilisers and other energy-intensive products rising as a consequence of the conflict, overall input prices are expected to experience a considerable boost, depressing yields and outputs in the 2022/23 crop season,” a recent document by Food and Agriculture Organisation (FAO) of the United Nations says.
Read also: Nigerian farmers warn as fertiliser, diesel price hikes bite
Diesel
Diesel has a stronghold on the Nigerian economy as it powers a large part of the industrial and commercial activities in the economy, from the trucks used for long-distance haulage of both industrial and finished goods, to small machines used by small-scale enterprises.
Since the war, its price has risen from about N288 per litre in January to over N700 in March. The spike in diesel prices is affecting businesses in terms of operations and sales, especially for manufacturers.
Many of them have resorted to cheaper alternatives like petrol generators to keep their operations running.
Frozen foods
Coldrooms, used to preserve frozen food like chicken, turkey, and beef, run on diesel. And as a result of the increase in diesel, retailers had to pass the cost to their customers.
A BusinessDay survey across some markets shows that over the past four weeks, the price for a kilo of turkey rose to N3,200 from N2,700, a kilo of chicken increased to N2,000 from N1,500 and a kilo of Titus fish rose to N2,000 from N1,700.
According to a report by SBM intelligence, protein sources like turkey and beef accounted for the increase in most of the states in February and March, thus making it difficult for many families to afford protein in their meals as they are now more concerned about food quantity other than food quality or dietary requirements.
“Beef, chicken, and fish have become so costly these days. I am not even talking about turkey, I removed that one from my menu a long time ago, and now that everybody wants to add egg, it has gone up too,” one of the respondents interviewed by SBM said.
Cooking gas
Before the conflict, the price of refilling a 12.5kg cylinder for Liquefied Petroleum Gas (cooking gas) was trending down as it reduced to N7,700 in January from N8,500 last year.
This was a sign of relief as it eased the burden of cash-strapped households who have been dealing with a hike in price since the beginning of last year. But the price has spiked up again to about N8,500-N10,000.
Flight tickets
The price of aviation turbine kerosene, also known as Jet A1 fuel, which ranged from N230 to N250 per litre across different states in the country last year, rose in March to N590 in Lagos, N599 in Abuja and Port Harcourt, and N625 in Kano.
Local airlines responded to this by hiking their airfare tickets in any state in the country to N50,000 from N30,000, in order to cope with the rising costs.
