With food inflation now at 33.98 per cent, food prices have escalated in recent months as most food items have soared between 70 percent and N80 percent in the last six months, LEADERSHIP learnt.
This increase, coupled with low disposable income of the people, findings show, have pushed some food items out of the reach of poor and average Nigerians, with most people rationing food and cutting down on essentials.
For instance, LEADERSHIP investigation revealed that a bag of foreign rice which sold at N45,000 six months ago now sells for N73,000, with the local rice now selling at N63,000 from N40,000 earlier.
A crate of eggs which sold for N2,300 six months ago now goes for N3,000 and N3,500 depending on the location.
A small tuber of yam which cost N1,000 is being sold between N1,500 and N2,000, while a bag of beans was N100,000 before and now is N150,000. A Derica of Oloyin (sweet) beans was N500 a measure in July but is currently N900. A carton Indomie pasta which was N4,000 six months ago but now goes for N7,400, while a Spaghetti pack that sold N500 is now N800.
At Ipodo market in Ikeja, Lagos State, a paint bucket-sized portion of coloured garri and white garri which were formerly priced at N1,500 and N1,200 respectively are both presently being sold at an equal rate of N2,000 each. 10kg of Semovita was about N8000 six months ago but now sells at 12,000.
Both sellers and buyers are lamenting non-affordability of food stuff and other staple products because of high prices. For instance, bottled water has gone up from N100 per bottle to N150 while the price for a bottle of sweet beverage rose from N200 to N250 and now N300 per bottle.
When questioned about the demand for this product, a vendor replied with a casual dismissal: “Nigeria no get anybody’s time. If you like, buy, if you don’t like, shift.”
At the Morenike Oil store, proprietor Morenike Owolabi reported that the price of a 5-litre container of Kings brand of groundnut oil has risen from N8,500 to N11,500. Similarly, the cost of a 3-litre container has increased from N4,500 to N7,000. The price for a 2-litre container has doubled from N2,500 to N5,000 and even the smallest size – a single litre – now costs N2,000 instead of its previous price tag of just N1,750. Even individual sachets have seen an uptick in pricing with current rates at approximately double what they were last year.
At Ipodo market, Ikeja, a rice seller said that there is currently no set price for rice. “One must remain vigilant and receive updates on pricing. Even Nigerian rice is competing with foreign rice in terms of how the price is rising,” she said.Conversely, however, is the news that palm oil prices have decreased noticeably: last year, a 5-litre gallon was sold for N6,000 but is now N5,000.
When inquired about her ability to manage the constant fluctuations in pricing, Owolabi responded with resilience and determination: “We must persevere. It is said that if you cannot beat them, join them. Therefore, we must engage in legitimate activities lest we succumb to hunger’s grasp. I have dependents at home – my children and husband – so idleness is not an option for me.
“However, consumers are gravitating towards unbranded groundnut oil due to its affordability; even then, it remains relatively expensive. In my opinion, this predicament has spiralled out of control and will inevitably lead to conflict.”
A carbonated beverage vendor, known as Iya Newthing, disclosed that she had temporarily ceased her trade due to the frequent fluctuations in prices. However, she resumed her trade because of customers’ persistent demand. Her apprehension lies in the fact that she is unable to pinpoint a definite reason for the incessant price hikes.
A pack of Coca-Cola PET bottles currently retails at N2,500, from the previous price of N2,350. The cost of an individual Coca-Cola PET bottle has also risen to N300, compared to its previous price of approximately N150 one year ago.
A vendor of yams expressed her concern regarding the ongoing issue of rising food prices. She questioned whether or not the government is taking any measures to address this matter.
“The current state of affairs has led to a level of hardship that people have adapted to over time. Last year, the same quantity of yam was sold for N1,000; however, it now costs N1,500.”
Most of the sellers, in a chat with LEADERSHIP, say that they are not selfish with prices but have to sell at a fair price. One linked the hike in plantain price to the cost of transportation which is eating deep into profit.
For Dada Atinuke, an egg seller in Ifo, Ogun state, the price hike of egg to poultry feeds whose prices have gone up seriously in the last few months as well as transport logistics.
Moreover, Nigerians are seriously groaning over the rapid increase in cost of living, a development, they said, may push some to the wall.
One Mr. John Nweke said the country is very tough to live in.
“All that the holy book said is happening and it is not new. The word of God is powerful and the government cannot do anything about the increasing cost of food, although we are suffering and we call on God to intervene because I believe the government too can’t find a lasting solution to these challenges.
Another Nigerian who wants to be anonymous said: “I cannot say this is what is making the price go up. At one point, I stopped selling PET carbonated beverages because of the price increase but because people kept coming to ask for it, I had to restart.”
The price increase, according to market observers, was chiefly inflation, followed by insecurity, forex volatility, transportation and production logistics, infrastructure breakdown, epileptic power supply, and bad road network, amidst a tough business operating environment, among others.
The rising prices in the country is evident in the inflation rate even as some analysts believe that the rate reported by the National Bureau of Statistics (NBS) is much lower than the actual figure.
According to the December figures released by the NBS, inflation stood at 28.92 per cent, with food inflation which is a major component of the basket at 33.98 per cent.
From 24.32 per cent food inflation in January last year, it has continued on a steady climb, same as headline inflation which rose from 21.82 per cent in January last year. Headline inflation had seen a hug spike in July last year having risen from 22.79 per cent in June to 24.08 percent while food inflation spiked most in August when it rose from 26.98 per cent in July to 29.34 per cent.
Whilst the rate at which inflation rose in the early part of last year was slow, it had picked up pace by mid-year. Although analysts foresee a further rising inflation occasioned by the increasing food prices, insecurity and a weakening currency, the CBN governor seems optimistic that inflation will fall to around 21 per cent this year. The tactic to achieve this, according to him, is price stability and effective monetary policy.
Central banks implement monetary policies to control inflation and deflation, ensuring that the purchasing power of a nation’s currency remains steady.
However, the International Monetary Fund (IMF) in its recent staff assessment of the country noted that fuel subsidy removal, exchange rate depreciation, and poor agricultural production are major contributors to the spiking inflation in the country.
The IMF called for temporary and targeted support to the most vulnerable in the form of social transfers, given the ongoing cost-of-living crisis.
On his part, Chief Executive of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf noted that key inflation drivers are not receding.
“If anything, they have become even more intense. These factors include the depreciating exchange rate, surging transportation costs, logistics challenges, forex market illiquidity, astronomical hike in diesel cost, climate change, insecurity in farming communities and structural bottlenecks to production.
“These are largely supply side issues. Elevated inflationary pressures also aggravate pressure on production costs, weakens profitability, erodes shareholders value and dampens investors’ confidence.”
According to him, it will be very difficult to tame inflation if the country does not fix power, logistics and forex.
Meanwhile, manufacturers said there is urgent need to tackle underlying causes of inflation as this will worsen constraints on economic expansion and elevate unemployment rate within the country.
The director-general, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir stated this in a report entitled ‘Increasing Inflation Rate and Its Impact on the Manufacturing Sector.’
According to Ajayi-Kadir, ‘the rise in inflation was majorly driven by higher prices of food items.’
He noted that the continued surge in sub-indices of inflation show that Nigeria’s inflation is structural in nature, not transient.
He explained that the continuing inflationary pressure experienced in the country is attributable to the fallout of government policies and measures, including removal of fuel subsidy and the unification of exchange rates, saying concerns about increasing energy costs and widespread insecurity in food-producing regions are exacerbating the inflationary pressures.
For the country to witness sustained economic growth, MAN recommends a stable exchange rate, which is crucial to controlling inflation, saying the CBN should implement effective exchange rate policies that prevent sharp depreciation of the currency, which has continued to lead to imported inflation.
