…Parents switch wards to affordable schools
Nigerian households are planning to spend most of their incomes on food, education and household items in the next six months, according to a recent survey by the Central Bank of Nigeria (CBN).
The poll, which was conducted between July 22 and July 26, 2024, had a response rate of 99.7 percent. The sample size was drawn from the National Bureau of Statistics (NBS) master sample list of 1,665 households.
In a ‘Household Expectation Survey’ published on the CBN website, the apex bank said many Nigerians intend to cut down on items that are not essential in the next three to six months.
“Spending outlook for the next six months showed that consumers plan to spend a substantial amount of their income on the following items: food and other household Items (54.9 points), education (35.4 points), transportation (30.2 points), electricity (20.0 points) and medical expenses (12.2 points),” the poll shows.
Read also: Nigerians plan to spend most on food, other basic items for the next 6 months, CBN survey
On the other hand, the respondents do not plan to spend a substantial amount of income on big-ticket items such as purchase of house, car and household appliances.
Also, Nigerians do not intend to spend on investment such as acquiring landed properties or other forms of investments. They equally do not plan to save their incomes.
“This reflects their family financial situation in the current month and reaffirms their stance that they will be drawing down on their savings or getting into debt,” the apex bank survey shows.
Priority influenced by school resumption, economy
Experts say the decision of parents and households to focus on food, education and utensils is predicated upon school resumption and the poor state of the economy.
“I am a parent. My focus at the moment is on school resumption. I need to pay the school fees of two of my children. I am also focused on food and household needs because they are daily needs. Other things can wait,” Ike Ibeabuchi, a commodities analyst, told BusinessDay.
For Maryann Alhasan, A Kubwa, Abuja-based nurse, her major worry is school fees and food for the family.
“Our focus is to buy food in bags and keep it in the next six months due to price uncertainties. Secondly, we have set money aside to pay school fees. These are our priorities now,” she said.
Consumers expect naira to appreciate by January
The CBN survey also revealed that many Nigerian households expect the naira to continue to fall over the next three months but strengthen in the next six months.
“Consumers expect the naira to depreciate in the current month, next month and next three months but appreciate in the next six months,” the report stated.
The naira plunged to N1,598.56/$ on Friday, ending the month of August on a negative footing after losing N28.56.
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The naira made some gains at the beginning of the second quarter of the year but lost its steam thereafter, becoming the world’s worst currency after the Lebanon pound.
The CBN respondents are however optimistic that the bank’s monetary policy decisions will see the battered naira make a turnaround in the beginning of 2025.
Households see inflation, rates to rise
Also, the poll shows that Nigerians expect inflation, borrowing rates and unemployment to keep rising due to the harsh macroeconomic pressures.
Africa’s most populous nation is contending with rising prices which have sparked the worst cost-of-living crisis in decades.
The consumer price, which fell slightly after rising for the 19th consecutive time, stood at 33.40 per cent in July 2024 – a 28-year high.
The incessant rise in prices have led to the CBN’s monetary policy committee jacking up the benchmark interest rates from 18.75 percent in July 2023 to 26.75 percent in July 2024 to rein in inflation.
The hike in monetary policy rate has however begun to yield results as inflation drops to 33.40 percent in July 2024 from 34.2 percent in June. But lending rates are as high as 30-40 percent in deposit money banks.
The survey respondents believed that the economy would end up weaker rather than stronger should prices start to rise faster.
“The survey result showed that 80.9 percent of the respondents believed that the economy would end up weaker, while 3.2 percent opined that it would be stronger,” the CBN survey revealed.
Parents pick affordable schools
Meanwhile, parents are taking decisions regarding their wards in the face of school resumption.
Onyekaonwu Okeke, Onitsha-based trader, said he will switch his wards’ schools on August 15.
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“Schools will resume in Anambra State on August 15. I pay N330, 000 for the school fees of three of my children. But I have seen an affordable option where I have been told to pay N180,000,” he said.
He explained that even though quality of education is paramount in his mind, affordability is the primary reason for his decision.
Opeyemi Kehinde-Brown, a Lagos-based civil servant, said: “My children are definitely changing schools.”
“Right now, I pay N85, 000 for each of my two children, but I am switching to a school where I will pay N45, 000,” he said.
