Update 2: Household incomes under pressure despite declining inflation  

The continuous rise in the prices of essential family needs is putting the incomes of many households under pressure despite the decline in headline inflation.

The National Bureau of Statistics (NBS) released its inflation figures for March, showing a slowdown in headline inflation.

March headline inflation, which measures the average change in the prices of goods and services, was 17.26 percent as at March ending, down from 17.44 percent in February, indicating that the prices of goods and services are no longer rising as fast as they were in the same period of 2016.

The NBS linked the lower inflation figure to the fact that food prices are already high and therefore have less headroom for upward movement and also to the early effect of the Central Bank of Nigeria’s decision to flood the interbank foreign exchange market with dollars, which has resulted in a significant appreciation in the exchange rate of the naira in the black market.

But while food inflation declined to 18.44 percent in March, compared to 18.53 percent in February, the monthly average change in inflation, indicated an upward trend, rising by 2.21 percent in March. This indicates that upward pressure on food prices continues to persist, despite the government’s efforts to boost food production in the country.

The NBS data shows that the non-food items displaying the steepest rise in prices are the items that households have no choice but to spend money on.  These include; housing, water, electricity, cooking gas and petrol and diesel, education, food and alcoholic beverages, and footwear.

Similarly, food inflation is also being driven up by rising prices of bread, cereals, milk, meat, potatoes and yam tubers, as well as cheese and eggs, which make up the food basket of many families across the country,  putting further pressure on house incomes.

BusinessDay checks show that the prices of most household perishable goods and consumer goods have continued to rise in the past one month, putting further pressure on household incomes.

As at yesterday (Thursday) a basket of fresh tomatoes was sold for between N10,000 and N12,000, as against N4, 000 in March. A 50kg bag of rodo pepper increased to N15,000 from N6,000, within the same period.

Also, the price of a 50kg bag of Oloyin beans rose from N16,000 to N18,000 while 25 litres of vegetable oil rose from N13,000 to N13,500 and 25 litres of palm oil rose from N13,500 to N14,000 within the same period.

A carton of Titus iced fish which previously sold for N18, 500 is now N19,400, and a bag of onions is now sold for between N14,000 and N14,500 instead of N12,000 within the same period.

Prices of other food items and condiments, such as Ogbono (a major soup thickener), salt, dried pepper, tomato paste, noodles, seasoning (Knorr, Maggi, Royco, etc), maize, baking flour, among others, have also risen significantly in the last one month.

Beyond food, prices of other items, including toiletries, have also been on the upward swing.

‘‘Much of the increases have been caused by supply chokes due to FX scarcity. The irony is that as the purchasing power of Nigerians decreases, the price of the very items they seek to purchase will continue to increase rapidly, creating a double jeopardy situation”said Cheta Nwanze, head of research for SBM Intelligence, in an earlier interview with BusinessDay.

However, some food items witnessed a slight decline in price over the last one month.

A 70gram carton of indomie noodles dropped from N20, 000 to N18,000, a bag of 50kg rice now goes for between N15,500 and N16,000 instead of between N17,500 and N18,500, depending on the brand.

‘‘The market was dull but since yesterday, customers have been buying in bulk in preparation for the Easter celebration. This is responsible for the marked increase in the price of some food items such as fresh tomatoes and pepper,’’ said Biliya Lawal Adam, secretary of  the perishable goods section, Mile 12 Market, Lagos.

 

CHINWE AGBEZE