Inflation is increasingly eroding and weakening purchasing power in Nigeria.
Consequently, households and firms are gradually turning to second-hand markets in the country for their shopping needs.
From clothing, cars, electronics to furniture and home decoration, the major second-hand markets in Lagos, Port Harcourt, and Kano, are experiencing a surge in demand.
For the rising demand in second-hand goods, the shift in consumer behaviour reflects a growing awareness of both economic necessity and sustainability, with inflation presently at 32.7 percent.
In Lagos, at the Odo Olowu market at Ijesha; the Westminster market at Apapa, as well as the Yaba market, that are all notably for Tokunbo, shoppers and sellers are lamenting that the weak purchasing power and spike in cost of new goods and electronics were major factors influencing the increased patronage.
The rising patronage of used household items is a reflection of the growing number of people that are entrapped in poverty because people can only buy what they have the capacity to pay for.
It is painful that the Nigerian situation is that demand for very cheap products is increasing while companies that are engaged in premium products are struggling.
So, increasingly more and more people, including those in the middle class, are buying all manners of fairly used items, from cooking utensils to furniture, textiles, under wears, not to talk about cars.
“The harsh economic climate in Nigeria has made consumers to prioritise essential needs over luxury goods, opting for affordable used items.”
It has become the in-thing because of poverty and the issue of high cost of goods due to intense inflationary pressure.
This is because not many incomes are growing enough to match the rate of increases in prices; therefore, the real income has dropped considerably across all the income classes.
Some companies as a matter of business model are devising strategies to reduce quality and quantity just to come down to the level of those whose incomes have dropped considerably.
The surge in patronage of used household items imported from Europe, Asia and America is significantly triggered by weak Naira and low purchasing power of Nigerian consumers.
According to the National Bureau of Statistics monthly inflation report, the average price of commodities moved progressively and astronomically from 22.41 per cent in May to peak at 28.92 per cent in December 2023, while the headline inflation rate climbed to 32.15 per cent in August 2024 up from the 25.80 per cent recorded in August 2023.
Consequently, staple foods are out of the reach of the poor and the middle class. According to the NBS, the average price of 1kg of brown beans increased by 27 per cent on a year-on-year basis from N545.61 in August 2022 to N692.95 in August 2023 and now N2,444.81 in July 2024, representing 262.98 per cent price increase. The commodity now sells for an average of N3, 500, while a bag costs an average of N210, 000.
The data agency said the average price of 1kg of yam tuber rose by 42.80 percent on a year-on-year basis from N403.65 in August 2022 to N576.39 in August 2023, and jumped to N1, 802.84 in July 2024.
NBS also reported that the average price of garri increased by 49.16 percent on a year-on-year-basis, from N305.92 in August 2022 to N456.32 in August 2023, and N1, 151.79 in July 2024.
The current average price of garri is now N1, 200. One kg of cooking gas now goes for N1, 500. Sadly, the current market prices of commodities have made nonsense of the N70, 000 minimum wage as, at an average cost of N210 per bag, the price of beans will pay minimum wage three times over.
The NBS also said the country’s unemployment rate increased to 5.3 percent in Q1 of 2024 from 5.0 percent in Q3 of 2023.
This horrible situation confirms the World Food Programme projection that the 18.6 people suffering from acute hunger in Nigeria at the end of 2023 would increase to 26.5 million in the June-August lean season, and its ranking as the 109th out of 125 countries in the 2023 Global Hunger Index. There can be no better indication that Nigeria is headed for a food crisis if urgent measures are not taken.
The government’s reforms have proved unhelpful as its body language is out of tune with its interventions. For instance, printing money without controlling wasteful spending and cutting excesses has pushed up inflation. This has conspired with other financial missteps to make inflation escalate for 13 consecutive months.
The Naira currently exchanges at an average of N1, 700, down from N460 in May 2023, while the interest rate upped to 26.75 per cent from 11 per cent in the past two years.
Nigerians cannot be punished for this overt recklessness.
These horrifying statistics, despite early warnings and projections, show that the Nigerian government does not have a workable strategy to tame hunger and hardship.
Going forward, the government should dump white elephant projects and concentrate on mitigating hardship by crafting effective strategies to tame inflation and reflate the economy.
Stringent actions must be taken to stimulate creative activities to engage the teeming youth population by fixing the country’s abysmal power situation. The gains of subsidy removal should be transparently injected into productive ventures while cutting wastages and blocking loopholes in governance to ameliorate the dire situation.
The Federal Government should give its reforms a human face.
Nigerians must not all die before the reforms yield the so-called dividends. There must be home-grown solutions to the economic downturn beyond the cut-throat solutions being dictated by international organisations. The government should take urgent steps to avoid another protest by labour and the people.
With a weak Naira, importing new goods becomes very expensive, making used items more affordable in satisfying the same needs.
These used items are cheap alternatives to new ones and their lower prices make them more accessible to Nigerians.
That Nigerians have reduced purchasing power or limited disposable income is attributable to economic challenges occasioned majorly by the twin factors of fuel subsidy removal and floatation of Naira thereby making used items a more viable option.
The harsh economic climate in Nigeria has made consumers to prioritise essential needs over luxury goods, opting for affordable used items.
It is our point that an import-dependent economy with low infrastructural provision for supporting manufacturing (like power) should not adopt an option of floating its currency. Development of local manufacturing base should precede such policy.
To address these issues, the Nigerian government should implement policies to strengthen the Naira, encourage local manufacturing and entrepreneurship, and promote sustainable consumption and waste management practices.