How rising food prices stretch cash-strapped Nigerians’ wallets

Rising food cost is piling pressure on Nigerians whose incomes have contracted since 2015.

The average income in Nigeria is less than $2,000. But even that does not tell the full story in a country where income inequality is rife and the highest number of poor people globally call home.

These factors, coupled with a six-year-high unemployment rate and second economic recession in five years, are the reasons why rising inflation is especially painful for Nigerians.

Buoyed by rising food costs, Nigeria’s inflation rate quickened to an almost three-year high in December, according to data by the National Bureau of Statistics (NBS).

Headline inflation rose 15.75 percent in December 2020, from 14.89 percent in November 2020, with food cost – which accounts for more than half of the inflation basket – accelerating 19.56 percent, the highest since November 2019.

Food prices are surging on the back of lingering security challenges, festive induced demand and an acute dollar squeeze. A controversial border closure, which has been recently lifted, also stoked higher prices.

The persistent rise in food prices is adding more strain on consumers’ already squeezed wallets.

What is worse is that the pandemic coupled with the economic recession will drag an additional 11 million Nigerians into poverty by 2022, according to World Bank estimates, an indication of how much pain lies in wait for many.

Despite this, the prices of key staple food items in Nigeria have continued to rise unabated.

A BusinessDay survey of Nigerian Army Shopping Arena, Mile 12, and Sabo Market (all in Lagos), tells the unblemished story of how Nigerians are feeling the pinch of the increase in food prices.

The least is N1,700

A look at Kingsley tells of a young man in his late twenties, hustling like every other person from Eastern Nigeria.

His shop is located in The Nigerian Army Shopping Arena, a market that is very popular in Oshodi area of Lagos, and also among photographers, and simply called ‘Arena.’

To get to Arena on foot from the BRT complex, one would have to endure the stench of faeces and urine that is glued to the air all through the over 30-minute walk.

It is said that Arena was a product of the Nigerian Army and Woobs Resources Limited, aimed at providing the ideal shopper’s market and a market for the underprivileged and economically disadvantaged citizens of the country.

“This one is N1,800, and the white beans is N1,600. Brown beans sells for N1,700,” he said, as our reporter approached him looking to buy some beans.

“In this market, the least you can get is N1,700,” he quickly chipped in when our reporter lamented the price and offered N1,500.

“Even if you go round the market, that is the last price,” he insisted.

Kingsley has been in Arena for 14 years—since the market was opened. He gets his beans from Agege area of the state and the suppliers in Agege get from Northern Nigeria.

As the haggling protracted a bit longer, a man came to price stocked fish. When he was told that the price for four pieces was N2,500, he could not buy and left feeling upset after inspecting the few pieces dumped in a bowl.

Our reporter ended up buying two dericas of beans from Kingsley with each costing around N350.

Beside Kingsley was another man who looked on in despair. He had just lost a customer who could not afford his white beans. He too sells his white beans for N1,600.

The customer offered to pay N1,200 but left when his budget did not permit a deal.

According to data from the NBS, 1kg of brown beans cost N334.6 in November 2020, 8.9 percent increase compared to November 2019, when it sold for N307.3 on the average.

Elijah’s rice

Elijah was found two sections away from where our reporter bought beans.

Elijah sounded impatient as he asked what our reporter wanted to buy, as he pushed aside a pack of food and sachet water.

Elijah sells a paint of foreign rice for N2,500 and could be given for N2,300, at the least price while Nigerian rice sold for N2,400, the least price was N2,200.

While this reporter was still deciding the trajectory of his bargain, a woman walked in, asking for flour.

She was shocked at the price and eventually left angrily. She had wanted to buy half a paint of flour with a budget of N450. But Elijah insisted it was N500. She was livid.

Returning to me, Elijah said there was no paint of rice for N1,500. “You cannot buy at that price,” he said. “I have even removed N200 for you,” he said, emphasising his generosity.

Though still very impatient, he managed to explain that rice was still expensive and that the local rice could not go below N2,200.

The price of rice seems to be dependent on the market where you buy.

At Mile 12 Market, a paint of local rice goes for N1,700, while foreign rice sells for N1,800 per paint and half a paint is sold at N900.

At Sabo Market, a paint of rice is sold for N1,700, while half a paint is sold N900 and derica is sold N350.

According to data from the NBS, the average price of 1kg of local rice rose 17.6 percent year-on-year (y/y) in November 2020 to N404.6 compared to N344 in November 2019, the highest in five years.

“Check another place”

Funke (not real name) was sitting very close to her big bowl of oil—palm and vegetable oil, displayed in 75cl pet bottles. On enquiry about the price for each, she replied “N600.”

“Won’t you take N400?” our reporter asked. She refused and reeled out the options as if she was used to dealing with buyers who could not afford the initial price. “You can buy half a bottle for N300 or a sachet for N70.”

Our reporter later offered Funke N500 for the bottle of oil, but that was enough to get her provoked. “Check another place,” she said trenchantly.

In Sabo Market, all the groundnut oil sellers all insisted a bottle was N600 or they were not willing to sell.

According to data from the NBS, a bottle of groundnut oil rose 13.23 percent to N656.7 in November 2020 from N580 in November 2019.

“Yam is expensive”

At the Nigerian Army Shopping Arena in Oshodi, one of the yam sellers barked the following words to our reporter – “The least price for yam is N800. The rest are N1,700 and N1,200,” she said.

She would explain why the price was rather high from her experience.

“Yam is expensive,” she began, “where they produce yam, Boko Haram is killing them, who would go to the farm? The yams you’re seeing here are the ones brought from Benue. If they were bringing yams from many places, there would be a lot of yam in the market and it would be cheap too.”

At Mile 12 Market, the seller also explained that sweet potatoes had become really expensive such that a bag now sold for N12,000, instead of the previous N6,000.

“Before it was between N6,000 and N7,000, but it rose to N8,000,” she added.

At Mile 12 Market, our reporter found Sanni at the market’s car park after seeking directions to where yams are sold.

Sanni had no buyer at the moment, so he was quick to pull our reporter to his goods under a tattered covering.

“Show me the one you like,” he said gleefully.

Our reporter pointed at one, asked how much, and offered to pay N500.

“Pay N1,000, because yam is expensive,” Sanni said, but he would eventually bring it down to N750.

But the reporter said the price was still too much, insisting that he budgeted N500. Sanni then explained that N500 cannot get a tuber of yam—not even the big ones that turn black when peeled.

After five minutes of going back and forth, he brought out a dwarf-looking tuber of yam, described as ‘Abuja Pampers’ and offered it for N650.

“What kind of yam is this,” our reporter screamed at the sight of its size. “Who would buy this?”

Sanni began another round of explanation stating that yam is becoming scarce due to insecurity in the North.

According to the NBS, the average price of a tuber of yam across the country rose 16.26 percent to N236.2 in November 2020, compared to N203.2 recorded in the same period in 2019.

“N100 a few months ago”

A costermonger, named Abbu, a very dark Northern youth, was manning his wheelbarrow filled with watermelons. Where he stands has no shade. Behind him is an abattoir.

“N700,” he said, when asked the price of one of the watermelons he had for sale. “This one is N200, last”, pointing to an even smaller one.

“Let me give you N150,” the reporter haggles. But Abbu returned with a flaming look and said the least he could do was N150. A few months ago, N100 would have been possible.

After much haggling, the reporter made to leave but he was called back to pay N150 for the smallest size. He bought it.

“There’s no more meat of N200”

Along the same line of unshaded shops, Segun (not real name) stood with his tray of meat. He is nearly six feet tall. His eyes were red and fiendish.

Despite the presence of a slaughterhouse behind him, the least amount he sells is N500. Not too long ago, people got beef for N200.

“There is no more meat for N200,” he yelled.

While our reporter did not buy Segun’s meat, he was able to buy 15 small fingers of plantain from a seller known as Dami, who was among a group of over 10 women shouting “buy plantain one (a bunch) for N250 and two for N500.” Only Dami sold for N200.

Sweet potato prices have doubled

Every morning, fresh sweet potatoes arrive at Mile 12 Market where they are put in bags and sold to retailers in the market. Faridat, a potato seller, told our reporter that sweet potatoes have become really expensive such that a bag now sells for N12,000, instead of the previous N6,000. That’s a 100 percent increase.

The woman sells a group of potatoes for N200, with nine tubers making up each group. To buy three sets, a customer has to pay at least N500.

In a country where some 89 million people live on about a dollar a day, which is equivalent to N400, that’s a steep price to pay for only three sets of potatoes.