- Residents pay most for food since 1999
Christians in Nigeria are celebrating this year’s Easter season on a very low key due to the economic hardship in the country that has triggered high cost of foodstuffs and soaring cost of transportation for holiday travellers.
For Christians, two seasons are very important. The first is Christmas while the second one is Easter. The two seasons are very important because of their significance to the Christian faith. Christmas represents the birth of Christ while Easter is a period they mark the death and resurrection of Christ.
The two seasons are marked with fanfare among Christians, and they provide people the opportunity to hold events such as weddings, burials, birthday parties, thanksgivings and other forms of celebrations.
Before now, people fixed many of their programmes to coincide with these periods. For people who fail to travel to their villages/hometowns during Christmas, they endeavour to do so within the Easter holidays.
However, it was discovered that the celebration this year is low-key as the rising cost of living crisis in the country robs households of their purchasing power.
Many families are finding it difficult to have a decent meal these days while those who still feed well spend well over 50 percent of their monthly earnings on feeding, leaving them no room for vacations and getaways.
Foodstuffs such as rice, beans, garri, groundnut oil, yam and proteins such as fish, chicken, meat and eggs are very expensive in the country.
Nigeria’s headline inflation accelerated to 31.70 percent in February while food inflation, which constitutes 50 percent of the inflation rate, rose to 37.92 percent in February from 35.41 percent in January.
“Many families are finding it difficult to have a decent meal these days while those who still feed well spend well over 50 percent of their monthly earnings on feeding, leaving them no room for vacations and getaways.”
“I don’t know how my family will celebrate and have fun this year’s Easter because foodstuffs are very expensive. I went to Oyinbo market on Friday and a kilo of meat was priced at N6, 500 while a sizeable meat that I used to buy for N5, 000 before was priced between N10, 000 and N12, 000,” said Celine Esosa, a mother of four.
She said she was confused as to what to buy because even the fish sellers were worse off in terms of pricing because they were pricing one sizable Titus fish for as much as N3,000.
Nkechi Olisa, a businesswoman lamented that she went to Daleko market to buy foodstuffs to cook soup on Saturday, only for her to realise that a derica of Egusi now goes for N2,000; Ogbono goes for N7,000; a paint bucket of Okro goes for between N4,000 and N5,000.
According to her, she left the market more confused because the prices did not give her room to even breathe.
“My family has not eaten swallow for a long time because of the high cost of foodstuff, especially items for making soup, including meat. I was hoping to make soup for my husband and children this Easter, but the money didn’t add up,” she decried.
An auto mechanic, Bayo Adewale, said that his plans to take his family on a weekend gate-away this Easter did not work out due to lack of money.
“We planned to eat out as a family, go to the beach and take up a weekend package somewhere nice for the family but looking at the money that was involved, we had to cancel because in two or three weeks to come, the school will resume with another set of tuition fees to pay,” Adebowale said.
An accountant, Titilope Wahab said her family of five planned to travel to Abuja to visit her parents-in-law but a bus ticket to secure at least four seats and move five people to and from Abuja will cost nothing less than N360, 000 on N45, 000 per bus ticket.
“Travelling by road is supposed to be a cheaper alternative to flying but it is no longer cheap these days since the removal of petrol subsidy that led to the hike in the pump price of petrol from N195 per litre to between N595 and N630 per litre depending on the location and dealer,” she said.
The price of foodstuffs is skyrocketing daily and is presently going out of the reach of the poor. Households are now spending so much on buying foodstuffs to at least have one or two decent meals daily.
According to 24Hour Market, an online frozen foods store, a kilo of Titus fish now goes for N5,000; a kilo of Kote fish now goes for N3,500; a kilo of Orobo chicken goes for N4,500 while chicken wings go for N6,500 and a kilo of turkey wings goes for N6,500.
The price of rice, Nigeria’s staple food, has become very expensive. For instance, a 50kg bag of rice now ranges between N73,000 and N87,000; 10kg goes for as much as N19,500; 5kg goes for N9,500 while a 4 litres paint bucket of beans goes for as much as N6,500.
A four-litre bucket of yellow garri goes for N2, 500 while Ijebu garri goes for N3, 500.
The high cost of interstate transportation has also spoiled happy moments for many families as Nigerians are now discouraged from embarking on Easter holiday trips outside their bases due to the biting cost of transportation.
“We paid N250, 000 to secure five seats on a night luxurious bus to move my family from Lagos to Nnewi in Anambra State and it was not funny. One of my daughters is getting married this Easter and we travelled to Anambra for her traditional marriage,” said Felix Amauche, a father of three.
According to him, travelling within Nigeria these days when transport costs are high is no longer a tea party because it requires a huge sum especially when you have a large family.
The situation, Amauche said, has strained his pocket coupled with the fact that he had spent all his savings on the preparation of his daughter’s traditional marriage.
“To host people is not easy these days in the face of rising food inflation in Nigeria,” he added.
The cost of transport has also gone up by 30 percent for business-class executive buses and 19 percent on smart couches popularly known as mini luxurious buses compared to the prices charged earlier in February.
A bus ticket from Lagos to Owerri or Aba now goes for between N38, 000 and N39, 000 on business executive class buses; a ticket on a Smart coach bus goes for N25, 000 while Sienna buses cost as much as N48, 000, according to information obtained from the official portal of GUO Transport Company.
Also, a bus ticket on Libra Motors from Lagos to Owerri or Aba costs as high as N39, 000 and N40, 000 respectively.
A bus ticket to Abuja from Lagos goes for as high as N45, 000 per seat this Easter period.
Aside from travelling by road, Easter holidaymakers who intend to travel to visit families and friends are also facing high airfare from Lagos to places like Owerri with airfare that ranges between N117,000 and N158,000 while Abuja to Owerri ranges N153,000 and N158,000 on Dana Airline.
Residents pay most for food since 1999
Investigations by The Point revealed the prices of food and other commodities have refused to react to the positive change recorded in the value of naira to the United States’ dollar in the last few weeks.
Following the recent foreign exchange policy adjustments by the Central Bank of Nigeria, the value of the naira has been steadily increasing. At the time of this report, the US dollar was being traded at N1, 280 on the parallel market.
The naira has shown improvement against the dollar on the parallel market, commonly known as the black market. It has appreciated by 42.58 percent, rising from its lowest point of N1, 825/$ in mid-February.
Following a surge in dollar supply by 69.43 percent last Wednesday, the naira strengthened on the official market, reaching N1, 300.43. This increase occurred a day after the Central Bank raised key interest rates.
Prices of food and other commodities had skyrocketed in February due to the free-fall of the naira.
According to the latest Consumer Price Index report by the National Bureau of Statistics, food inflation, which makes up more than 50 percent of headline inflation, continued its upward trajectory for the 14th consecutive month. In February of this year, it climbed to 37.92 percent from 35.41 percent in January.
Many Nigerians had anticipated a drop in the prices of food and other commodities following the steady appreciation in the value of naira.
However, a market survey revealed prices have remained “adamant” to the rise in the value of naira.
Medium-sized sliced bread priced at N1100 in February now sold at N1, 200. The cost of an egg rose from N150 to N200, and the cost of a crate of eggs rose from N3, 500 to N4000 within the same period.
Also, foreign parboiled rice in a 50 kg bag ranges between N80, 000 and N85, 000, compared to N77, 000 to N80, 000 in February. Local parboiled rice in a 50 kg bag now sells for N65, 000 to N70, 000, up from N60, 000 to N65, 000 in February.
A derica of beans has surged from N1, 100 to N1, 200, and a 25-litre container of vegetable oil is now priced at N45, 000. A paint of garri now priced N2, 500 from N2, 000 in February.
That prices go up and never come down not peculiar to Nigeria – Experts
However, economists have stated that it will take some time for Nigerians to feel the impact of the current strengthening of the naira against the dollar on the prices of commodities in the country.
The Chief Executive Officer of Economic Associates, Ayo Teriba, explained that the impact of the naira on prices exhibited a time lag.
He noted, “Foods that have been bought at the old exchange rate will still be tied to the old exchange rate.
“Whether a month or a quarter, it depends on the duration it takes to order and sell. The effect we should hope to see is that the prices have stopped going up. We call it acceleration.”
Echoing similar sentiments, President of Nigerian Economic Society, Adeola Adenikinju, highlighted the economic rationale behind the delay in price adjustments.
Adenikinju stated, “What people have in stock now was purchased at high prices. If they sell at lower prices, they are going to record losses.
“So until they replace the current one that is when they will reduce their prices.
“But currently, to avoid losses, they will still sell at the rate at which they bought it. We will only start seeing the current prices of things as current stock is sold and new stock is acquired.”
According to Adenikinju, the central bank’s actions in the next few weeks will also reflect what the sellers will do.
“They will be watching the markets to see if CBN will be able to sustain the stability of the naira,” he opined.
Nigeria has been battling soaring inflation, which accelerated to 31.70 per cent in February from 29.90 per cent in the previous month, driven primarily by food inflation, which rose to 37.92 per cent.
“Medium-sized sliced bread priced at N1100 in February now sold at N1, 200. The cost of an egg rose from N150 to N200, and the cost of a crate of eggs rose from N3, 500 to N4000 within the same period.”
To tame the pacing inflation, the CBN raised the benchmark interest rate to 22.75 per cent in February from 18.75 per cent and further reviewed it upward to 24.75 per cent on Tuesday.
According to Professor of Economics, Babcock University, Onakoya Adegbei, the fact that prices go up and never come down is not peculiar to Nigeria.
He said, “Reduction in production usually comes with a lag because of rigidity in production.”
He emphasized that market expectations usually drive the delay.
“There is usually a lag and that is due to the expectation theorem. For example, if you expect the price of rice to increase, you will buy more and keep it in the house, so, it will increase your demand. But if you expect that prices will fall, what you already have you cannot dispose of.
“Reduction in production usually comes with a lag because of rigidity in production. If you already produce a certain product at a certain price and the price in the market is falling, you will then wait to see if the reduction will be sustainable. If you see that it is sustainable, then you can make a move to reduce the prices of your product. It is a lag effect,” Adegbei explained.
Why inflation will persist despite currency appreciation – IMF
The International Monetary Fund said that inflation triggered by currency depreciation in Sub-Saharan African nations is eight times more potent during a depreciation compared to an appreciation.
This implies that inflationary forces might linger longer when local currencies strengthen against hard currencies in SSA countries.
According to a recently released report by the Fund, the extent of the exchange rate pass-through varied depending on factors such as natural resource endowment, domestic market competitiveness, and the effectiveness of monetary policy.
In simpler terms, the report highlighted that a lack of competition in SSA markets heightened inflation rates because pricing was dominated by a limited number of market players.
“The low level of competition in emerging and developing economies meant that firms in these economies generally have greater pricing power; as a result, they can swiftly pass exchange rate depreciations through to domestic prices,” the report stated.
“Lack of competition among firms in these economies has had significant costs, hurting the poor through higher prices of essential items and undermining growth and the ability of the economy to absorb shocks,” it further stated.
