There has been a longstanding understanding, an unwritten agreement of sorts, that places paramount importance on the essentials of life—food, clothing, and shelter.
However, in recent times, this basic understanding has faced challenges as Nigeria confronts inflation, particularly a notable increase in food prices impacting Nigerians significantly.
In times past, these fundamental needs were seen as essential, forming the foundation of existence. Yet, in today’s Nigeria, these basics are under a unique threat. The very fabric of life is undergoing a test as inflation, especially the continuous rise in food prices, casts a looming shadow over the nation.
Read also: Rising food cost traps Nigerians in cycle of repetitive, affordable meals
Imagine the essentials that once graced our lives with abundance, turning elusive. The vibrant markets, once an embodiment of diversity and choices, are now marred by the looming presence of soaring prices.
This isn’t just inflation; it’s a disturbance to the essence of life itself—the sustenance that fuels dreams propels ambitions, and shapes the narratives of families across the nation.
A report by the Nigeria Bureau of Statistics (NBS) in December 2023 reveals that Nigeria’s annual inflation rate rose to 28.92 percent from 28.20 per cent in November. This shows that the inflation rate has increased by 0.72 percent when compared to the prior month.
The NBS said on a year-on-year basis, the headline inflation rate was 7.58 per cent points higher compared to the rate recorded in December 2022, which was 21.34 per cent.
Comparing this rate to the global inflation rate becomes worrisome to the policymakers, experts and professionals. Despite the economic impact of the coronavirus pandemic, the global inflation rate fell to 3.25 percent in the pandemic’s first year, before rising to 4.7 percent in 2021-Statista.com
This increase came as the impact of supply chain delays began to take more of an effect on consumer prices before the Russia-Ukraine war exacerbated this further.
A series of compounding issues such as rising energy and food prices, fiscal instability in the wake of the pandemic, and consumer insecurity have created a new global recession, and global inflation in 2023 is estimated to have reached 6.88 percent. This is the second-highest annual increase in inflation since 1996. While the first was 8.71 percent in 2022- Statista.com.
A 5-year projection of the global inflation rate shows that the rate will continue to decline; in 2024 (5.79 percent), 2025 (4.62 percent), 2026 (4.23 percent), 2027 (3.94 percent), and 2028 (3.83 percent). Indicating global inflation rate is expected to decrease by 33.8 percent by the year 2028 other things being equal- Statista.com
While the A 5-year projection of Nigeria’s inflation rate shown by the analysis carried out by BusinessDay, using data sources from CBN from 2013 to 2023 to project the next 5 years, revealed the following; 2024 (24.08 percent), 2025 (25.59 percent), 2026 (27.11 percent), 2027 (28.63 percent), and 2028 (30.16 percent).
This indicates that from 2024-2028 inflation rate of Nigeria, other factors being equal, will increase by 25.25 percent. BusinessDay forecast. This trajectory suggests potential challenges such as reduced purchasing power, increased production costs, and potential economic instability. Policymakers may face the task of implementing measures to mitigate these consequences and foster sustainable economic growth amidst rising inflation pressures.
Forecast charts of Global and Nigeria inflation rates.
Chart: BusinessDay
In furtherance, headline inflation has consistently exceeded the upper boundary of the central bank’s target range of 6 percent to 9 percent since 2015, primarily due to the substantial depreciation of the naira.
The depreciation gained momentum following the new government’s decision to eliminate petrol subsidies, coupled with the liberalisation of foreign exchange in June 2023. Prices of food, which is the most relevant in the CPI basket, jumped to 33.93 percent in December, the highest since August 2005, from 32.8 percent in the prior month-Trading economics
The spill-over effect of the President’s decision still continues to germinate hardship as the Nigeria Bureau of Statistics (NBS), further reported that the rise in food inflation was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, meat, fruit, milk, cheese, and egg.
“On a month-on-month basis, the Food inflation rate in December 2023 was 2.72 per cent, this was 0.30 per cent higher compared to the rate recorded in November 2023 (2.42 per cent).” It added.
This makes it a 7-month price surge in staple food due to Mr President’s policy, attached is the chart that depicts the rise and rise in food inflation in the country.
Chart: BusinessDay
BusinessDay earlier report shows that Nigerians were further squeezed as the food prices hit off the top of the roof. Which thereby plunged many Nigerians into financial crisis, increasing their cost of living and worsening their livelihoods.
As we traverse the streets of Lagos- (Yaba-Akoka axis) cum Ogun state (Olambe – Akute axis) Nigeria, the stories echo a common theme. Fatima, a market trader in Akoka, recounts how her customers now buy in smaller quantities, carefully counting every penny.
In the same area Usman Bello, a realtor, laments the dwindling options in his grocery basket as he tries to feed a family of five on a tight budget. “I used to buy a bag of rice and not think twice,” Usman says. “Now, I have to weigh every purchase against income.”
For the Ajayi family in Olambe, Ogun state, the impact of the surge in prices of goods nowadays, goes beyond just the dinner table. Thirteen-year-old Ayomide, a bright-eyed schoolgirl, dreams of becoming a doctor. However, her aspirations are tethered to the family’s financial struggles.
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