Prices of various laptop brands in Lagos and Abuja have skyrocketed as firms allow their employees work from home, as Nigerians take to online studies due to Covid-19 concerns.
According to a BusinessDay survey of some laptop brands sold across Computer Village, Ikeja, Lagos, and many shops in Abuja, prices of new laptops rose from 30 percent to up to 138 percent between the time Covid-19 cases were reported in March and October. While devaluation of the naira had some impact on the prices, laptop sellers were also driven by demand.
Naira exchanged for dollar at N360/$ before the pandemic, but this has risen up to N470/$ at the parallel market due to crude oil market lows, representing 30.5 percent point increase. However, laptop prices have risen higher than 30.5 percent due to a combination of depreciation and higher demand fuelled by work-from-home strategy of firms and online studies, experts say.
The market survey shows that the price of a HP250G7 Intel Celeron laptop increased by 40 percent to N105,000 on October 8, from N75,000 as of March ending. Similarly, the price of a laptop known as Intel Core I3,8GB increased by 10.4 percent to N530,000 from N480,000 within the same time.
Also, the price of a HP Notebook – 15- (Intel Pentium Gold 4417U) increased by 47 percent to N133,000 from N90,000, while the price of a normal HP Standard laptop rose by 18.2 percent to N65,000 from N55,000. More so, the price of a laptop brand known as Lenovo Idealpal rose by 113.3 percent from N75,000 to N160,000. The prices were also the same in Abuja.
“Because of the lockdown and the fact that people had to work from home, companies that didn’t provide staff with laptops before the pandemic had to make arrangements. This drove up demand for laptops,” Omobola Adu, research analyst, Growth and Development Asset Management Limited, told BusinessDay.
“Also, gadget providers could not bring in new products, and there was demand for laptops. This led to price increase,” Adu said.
He does not expect the price of laptops to go south soon because, for him, they do not adjust downwards quickly.
BusinessDay found the average increase of laptop brands surveyed at 138.8 percent. Laptops are preferred over desktops due to their mobility and flexibility. When the pandemic first hit, offices and schools around the world were closed, forcing millions of people to work from home and complete classes online, and Nigeria was no exception.
uLesson, an edtech start-up, launched in February, got nearly 250,000 downloads in its first three months as a result of huge demand occasioned by lockdowns.
“I undertook a class during this period and I had to get a new laptop with modern features,” Odubola Adelana, who completed a three-month course in July, said.
Anita Edoma, a sales executive at Digital Solutions Network, saw close to over a 55-percent increase in sales for new laptops.
“The new ones were selling more because offices were buying them for their staff to work from home, while the fairly used ones were bought by individuals for their own personal businesses. And also, schools were buying for their teachers to conduct online classes,” she said.
But Elijah Bello, a tech expert, noted that devaluation of the naira played a major part in the price increase, saying, “There was high demand for laptops because of the need to work from home and nobody was sure when the pandemic was going to be over so the prices of goods in stock were increased because no laptops were being shipped into the country.”
Damilola Adewale, a Lagos-based economic analyst, supported the position, saying this was bound to happen as long as electronic products and accessories were not being produced in Nigeria.
“They are actually imported and, as such, exchange rate volatility or movement will surely affect the cost of these pieces of equipment.
“So, logically once your exchange rate depreciates, it tells you that the cost of importing any product will automatically increase.
“And going forward, the price could still increase because there is still uncertainty about FX stability and the current exchange rate is not trading at its fair value,” Adewale further said.
Computer makers were caught off guard by the huge surge in demand for laptops, with many retailers and distributors struggling to keep up during the early period of the pandemic. Coronavirus also affected laptops imports from the world’s manufacturing country, China.
As part of measures to unify the nation’s multiple exchange rates and ensure stability, the Central Bank of Nigeria, twice this year, devalued the naira. In July, it adjusted the value of the naira to exchange to the dollar at N381. In March, the bank adjusted the rate to N360/$ from N307/$ and abolished the N325 and N330 concessionary rates. But it trades at N460/$-N470$ at the parallel market.
For fairly used laptops, Bilamin Tunde of Mikky World Integrated System said there was about a 20-percent increase in sales for him.
According to a report by Euromonitor International, laptops saw a relatively healthy performance in 2020 as the portability of laptops appealed to an increasing number of consumers, particularly given the increased number of people working from home as a result of the pandemic.
Globally, computer sales shot up by 11 percent to 72.3 million units in the second quarter compared with the same quarter last year, according to preliminary estimates from IDC, a global market research company.
There are expectations that the prices could reduce to new stocks coming in December. “The increase has stopped. We should see decrease soon as traders will start clearing stock for December home-coming,” Bello further said.
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