- Poverty level, crime rate may increase – Analysts
With the yuletide season fast approaching and the economy in a downturn, traders of commodities, especially food items, have warned that prices of such items may rise by 50 per cent before December 25.
The prices of food items, which had gone up by over 100 percent since economic recession hit the nation, are expected to still soar higher, due to the increasing demand for the items, which can be attributed to the end of the year holiday shopping.
Going by a recent market survey by The Point, the cost of food com modities across Nigeria had skyrocketed. For instance, a 50kg bag of rice, which cost N12,000 before the recession had risen to about N28,000, depending on the brand; a bag of beans (oloyin) also increased from N10,000 to about N20,000; a bag of garri also rose from N15,000 to about N30,000.
Compared to what was obtainable in May, the hike in prices of other food items is alarming. For example, in Lagos and its environs, a large basket of tomatoes, which was sold for N2,500 at the popular Agege market before the lull, now sells for between N5,000 and N7,000. The smaller basket, also known as the ‘dustbin’ basket, which was sold for between N400 and N500 now sells for about N900 in some markets.
A tomato seller at the Berger Market, Lagos, Alhaji Seidu Abubakar, lamented that the high cost was as a result of delayed rainfall, stressing that most traders depended on irrigation farmers for the supply of farm produces like tomatoes, pepper and vegetables across the country.
He explained, “Due to Nigeria’s high population, the quantity we had could not meet the demand. “When supply is low, demand will be high and that is what is causing increase in price.” The Point also found out that despite the forthcoming yuletide and New Year celebrations, there had been low patronage for the commodities.
Last month, a 25-litre keg of palm oil was sold for N22,000, and this week it has risen to N25,000. As regards the prices of chicken, an average sized cockerel’s price has increased from N1,200 to N2,500, while a layer has also increased in price from N1,000 to N1,750.
A meat seller, Alhaji Azeez Bako, told The Point, “The price of beef has increased, because before now, we used to by a cow for N200,000, but now it is sold for N300,000 and that is why we now sell a kilo of meat for N1,200, against N800 before now. “You should also know that the population can also determine the level of your business. We sellers can easily identify our major customers.”
Meanwhile, financial analysts have warned that the development is an indication that a crunching inflation is hovering over the country. An economist, Mr. Titus Okurounmu, explained that the implication of the hike in basic food items is that the level of poverty will increase before the end of the year.
“If you earn N20,000 at the moment and spend N4,000 on such commodities, and prices of the commodities further rise, then you cannot buy as much as you used to do before, because it gives you an indifference curve, which will results in a lower level of consumption,” he explained.
He added that if there is a high level inflation and there is no competitive increase in the income of workers, not to talk of unemployed Nigerians, inflation will set in and that will boost poverty level.
Okunrounmu continued, “It inflicts poverty on everybody. The rising cost of food commodities is very unfortunate, especially as the end of the year festivals approach. “What that means is that people may not be able to buy the desired quantity of food, while others might turn to crime and corruption.”
Another economist, Mr. Timothy Olufemi, told The Point that the continuous rise in price of commodities is connected to the hyperinflationary situation, which has been caused by the import-dependent nature of the country.
He said, “If most of these food commodities are produced locally, no matter how bad the economy may be, food would not be a problem for many people to afford. “With the little people earn as income, if all states can emulate Enugu, prices of commodities would not had skyrocketed, irrespective of how hard the recession bites.”
