In Nigeria, the minimum cost of living is above the minimum wage due to high inflation rates. Nigeria’s minimum wage was set at N30,000.00 in April 2019 by the Federal Government, and it has remained the same over the years.
The minimum cost of healthy living for an adult per month at the beginning of 2022 stood at N40, 980.00 in Nigeria, Picodi.com reported. The reports showed that Nigeria’s minimum wage is less than the minimum cost of healthy living by 36.60 percent. The difference indicates that many Nigerians are malnourished and poor.
Life has become unbearable for many individuals and families because they can no longer feed themselves due to the high prices of foodstuff in the market. Prices increase every other market day. Many Nigerians go to the market with sizable wallets and return home with near-empty bags. High food prices have been a problem in Nigeria, but the current situation is biting hard on the nerves of many Nigerians.
Many Nigerians are poorer than in 2019; N90,000.00 cannot buy the same quantity of foodstuff they got at N30,000.00 in 2019. Many Nigerians have intensified their groaning following the daily pressure of the high cost of living.
In Nigeria, the high prices of food items have eroded the income of the people. The salaries of many workers have not increased to match increases in prices. Many individuals and families need financial help to augment their meagre income.
Many Nigerians are passing through pain as they can no longer eat twice a day. Many Nigerians now buy fewer consumables due to the prevailing high prices in the market. Macroeconomic studies have shown that consumption expenditure is one of the main drivers of economic growth. A reduction in private consumption in Nigeria may affect the GDP growth forecast for 2022.
The current high food prices in Nigeria correlate with high fuel prices. The current fuel price is a driving force of food prices because of the multiple uses of fuel. The Federal Government must address the prevailing fuel crisis in the country in the interest of the vulnerable.
Manufacturers are complaining about the high cost of diesel. Some filling stations are selling a litre of diesel at N1,000. The high cost of diesel has compelled many manufacturers to cut short output and labour force. The cut in output and labour force in the manufacturing sector has the full potential of aggravating the problem of unemployment and GDP growth rate in Nigeria.
High inflation in Nigeria is associated with a drop in the supply of agricultural produce to the markets. Many Nigerians in the middle-belt and northeast states have not returned to farming due to the fear of bandits. Many other farmers are still practicing small-scale farming methods. Nigeria’s population requires mechanised farming to produce large quantities and several agricultural products for consumption.
Also contributing to high food prices in Nigeria is the high exchange rate. According to Tony Anakebe, the managing director of Gold-Link Investment Limited, about 80 percent of importers source forex from the parallel market due to their inability to source forex from the official market. High prices of imported food items are exacerbating food prices in Nigeria.
The inability of the Nigerian government to use direct control over rising food prices is a significant concern. The wholesalers and retailers are the major drivers of high prices in the market. Many wholesalers and retailers are making abnormal profits; they sell their products at much higher prices.
The inability of the Central Bank of Nigeria (CBN) to effectively regulate prices is one of the factors driving food prices in Nigeria. The CBN either does not have the required competence to control prices or it does not have the required independence to act effectively.
The prevailing high food prices in Nigeria call for the urgent attention of the Federal Government. The government needs to intervene by using relevant economic policies to bring down food prices in the market. The CBN must be strengthened to implement monetary policy effectively in Nigeria.
The government should restore security in the country and grant low-interest loans to farmers to enable them to expand production. Low prices and sustainable growth are crucial macroeconomic goals of every developing country. The prevailing high food prices in Nigeria hurt economic growth and development.
Nigeria’s government must rise to the challenge of high food prices facing many people. Low food prices can enhance consumption, production, employment, growth, and stability in every economy.
Felix Ashakah is economics lecturer at Western Delta University, Oghara