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Rising food prices signal bleak Christmas for Nigerians

…inflationary pressure takes toll on consumer spending …traders lament low sales

From vegetables to rice and other key staple foods, rising prices across major cities in Nigeria are choking consumers, signalling what may be one of the bleakest Christmas celebrations in recent years.

Prices of all food items have soared by more than 20 percent in recent months, and consumer goods analysts blame this on the controversial border closure and rising consumer demand during festive periods. Inflationary pressure has shrunk the value of consumers’ disposable income, making basic needs unaffordable to Nigerians.

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“We cannot afford to buy the things we used to buy before because prices of everything have gone up,” Blessing Orizu, a mother of three who was at Mile 12 market to make purchases, told BusinessDay.

Since the Nigerian government shut the country’s borders in August, prices of all food items have surged as supply is unable to meet demand.

BusinessDay survey at some markets in Lagos shows that a 50kg bag of local parboiled rice now sells for an average of N22,500, from an average of N17,000 a year ago, indicating a 32.4 percent increase in price.

Similarly, a 50kg bag of foreign rice sells for N27,500, up from N14,500 last December, indicating a 90 percent rise in price.

The price of a 10kg carton of frozen chicken increased by 35 percent to N13,000-N13,500 as against N9,500-N10,000 sold in December 2018.

Further checks show that a 10kg carton of frozen turkey now sells for N15,000 as against N12,500 sold a year ago, showing a 20 percent rise in price.

A big basket of fresh tomatoes now sells for N17,500 as against N17,000 sold last year December, while a small basket sells for N9,000 as against N8,500 last year.

Also, a 25-litre keg of vegetable oil now goes for N11,500 as against N10,500 last year December.

“It has been really difficult for my family. We now buy little of what we feel is important. The painful thing is that my salary is still the same despite high rate of inflation in the economy,” Orizu said.

Inflation in Africa’s most populous country accelerated to 11.85 percent in November 2019, fundamentally driven by food inflation, according to figures from the National Bureau of Statistics (NBS).

This figure surpasses the Central Bank of Nigeria’s 11.7 percent projection for headline inflation for the year end.

“My disposable income now is smaller than it was last year as I have to get little for the same amount I spent before,” Ronke Suwara, a banker, told BusinessDay.

“Every Christmas, I usually cook and share with my neighbours, but I will not be doing that this year; I cannot afford to do so because of the high cost of food items,” Suwara told BusinessDay at Iddo Market in Lagos.

“I couldn’t buy anything for my parents this festive period as I cannot afford to; prices are higher and it’s making it difficult for me,” she said.

Ayorinde Akinloye, a consumer goods analyst, told BusinessDay earlier that prices would continue to trend higher towards the end of the year which will mar Christmas cheer.

“I anticipate a bitter Christmas this year,” Akinloye said.

Nigeria still has huge demand-supply gap in most of its food crops. The country imports from neighbouring West African countries to cover the shortfall as population continues to grow faster than food production.

Traders have been hard hit as low purchasing power is dampening trading activities in the country.

“Sales have been very slow unlike last year because there is no money in the economy. Prices are higher now and people do not have the money to buy,” Bimpe Alabi, a frozen food seller, said.

“Most of my customers are complaining of no money.”

Nigeria’s recent GDP report shows the trade sector (wholesale and retail) contracted quarter-on-quarter by -1.45 percent in the third quarter of 2019, thereby recording a consecutive quarterly decline in sector growth after Q2 trade growth was reported as -0.25 percent.

The report said the trade sector had been predicted to contract as border closure, poor government policies and weaker consumer spending continue to subdue growth.



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