• Tuesday, May 21, 2024
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BusinessDay

Inflation in Nigeria: Beyond the Numbers

Why cost of essential commodities must decrease alongside fall in dollar price – Adeoye

I was in Ikotun Market last weekend shopping for groceries with Madam. While it was coated in romantic garbs, that is, ‘continuation of valentine’, the aim was surreptitiously to see where one’s money was entering in these times. A lady buying tomatoes just ahead of us priced (haggled) up and down and finally exclaimed, “We no kuku fit chop the money.”.

This is precisely the stark reality in the face of soaring inflation rates: “We can’t eat currency.” Currency is meant to be spent even though its value has depreciated. The sad thing is that inflation isn’t just a number on a report; it’s a tangible force that impacts the lives of millions, particularly in a country like Nigeria where food prices are surging at an alarming rate.

Consider this sampling of basic food prices: a paint bucket of garri went from N1,600 to N2,00; spaghetti jumped to N950 from N600; a crate of eggs is now N3,600 from N2,800; and a 50-kg bag of rice now sells for N77,000. The persistent rise in food prices hits the pocket hard.

Unpacking the Numbers from NBS

The National Bureau of Statistics (NBS) latest report reveals that Nigeria’s inflation rate has climbed to a staggering 29.90 percent in January 2024, up from 28.92 percent the previous month. This relentless upward trajectory underscores the urgent need for proactive measures to mitigate the adverse effects of inflation on the populace.

The NBS report paints a grim picture of Nigeria’s economic landscape, with inflation showing no signs of abating. The 0.98 percent increase in January signifies that inflationary pressures continue to deepen, intensifying the challenges faced by both policymakers and ordinary citizens.

Year-on-year comparisons further underscore the severity of the situation, with the January 2024 inflation rate a staggering 8.08 percent higher than the same period in 2023. Moreover, on a month-on-month basis, the inflation rate surged to 2.64 percent in January, indicating a rapid acceleration in price levels that outpaced the previous month’s rate. It is not a pretty picture.

The Food Inflation Conundrum

Food inflation in Nigeria is a significant concern due to a combination of domestic and global factors. The vulnerability of Nigeria’s food supply chain, characterised by inadequate infrastructure and logistical bottlenecks, hinders efficient production and distribution, leading to price hikes and volatility. This complex economic challenge is exacerbated by the country’s vulnerability to food inflation.

Nigeria’s agricultural sector faces productivity issues like limited mechanisation, outdated farming methods, land tenure disputes, and insecurity. These constraints hinder domestic demand, leading to heavy reliance on food imports. Global commodity price fluctuations, geopolitical tensions, and weather events also impact food prices.

The depreciation of the naira has increased the cost of imported goods, including agricultural inputs, and exacerbated inflationary pressures. This has led to increased production costs and consumer prices, causing food insecurity and rising living costs. The president has ordered the release of 42,000 MT of grains to alleviate the situation.

Echoes of Discontent

Nigerians are increasingly discontented with rising food prices, expressing frustration and concern in markets and remote villages. Protests in states like Niger, Kano, Kogi, and Ondo are sparked by growing voices demanding solutions to the economic crisis.

Traditional rulers in the North, custodians of centuries-old wisdom and guardians of community welfare, are adding their weight to the chorus of discontent. Their calls for action reflect the palpable hardship faced by their people, worsened by policy decisions such as the removal of fuel subsidies. The Nigerian Bar Association, representing legal professionals nationwide, amplifies these concerns, highlighting the broader societal implications of inflation and its impact on access to justice and livelihoods.

The echoes of discontent serve as a glaring reminder of the urgent need for action.

Charting a Path Through the Inflationary Storm

In the face of mounting challenges, navigating Nigeria’s inflationary storm requires a multi-sided approach that combines short-term relief measures with long-term structural reforms.

The government should implement targeted subsidies and social safety nets to help vulnerable populations affected by inflation. Addressing structural constraints like agricultural productivity and supply chain strengthening is crucial. Creating an investment-friendly environment can stimulate economic growth and promote a more resilient future.

Additionally, initiatives aimed at enhancing financial literacy and promoting savings can empower individuals to weather economic shocks more effectively.

Addressing inflation’s structural constraints is crucial. Prioritising security, investing in modern farming techniques, improving credit access for smallholder farmers, and strengthening agricultural value chains is essential. Declaring an emergency on security is necessary to ensure farmer safety and stop ransom-holding bands, unlocking the sector’s potential and fostering food security.

Beyond Statistics, Towards Solutions

As Nigeria grapples with galloping inflation rates, the imperative to act decisively has never been more pressing. Beyond the statistics lies a stark reality where the rising cost of living threatens the very fabric of society.

In the pursuit of solutions, policymakers must heed the voices of the people and prioritise measures that alleviate the burdens imposed by inflation. Only through concerted efforts to address both immediate challenges and underlying structural constraints can Nigeria chart a path towards economic stability and prosperity for all of its citizens.

In a nation where the struggle to put food on the table transcends mere numbers, the time for action is now.

Eromosele, a corporate communication professional and public affairs analyst, wrote via: [email protected]