… as couples battle cost of living crisis
- Business owners lament harsh operating environment
- Experts proffer solutions to rising inflation
- Nigeria on right path to recovery – Analysts
Nigerians have continued to lament rising prices of food items and other commodities in the country.
According to the recent report by the National Bureau of Statistics, the nation’s headline inflation increased to 29.2 per cent in December, 2023 from the 28.20 per cent it was in November of that year. The figure represents the 12th consecutive time Nigeria’s inflation surged in 2023.
The December 2023 headline inflation rate showed an increase of 0.72 per cent when compared to November 2023 headline inflation rate. Looking at it from a year-to-year basis, the headline inflation rate was 7.58 per cent higher compared to the rate recorded in December, 2022. A look at that comparison showed that it is about 21.1 per cent, which is very high.
This showed that the headline inflation rate increased in December 2023 when compared to the same month in the preceding year, December 2022. It is quite a large margin.
The NBS report also said the food inflation rate in December was 33.93 per cent on a year-on-year basis and that is 10.81 per cent higher compared to the rate that was recorded in December 2022.
The bureau’s report stated that the rise in food inflation was caused by increases in prices of bread, cereals, oil and fat, potatoes, yam and other tubers including fish, meat, fruits, milk, cheese and egg.
Findings by The Point revealed that food price increases have seen the consumer inflation rate in Africa’s largest economy hit its highest level since 1996. The nation’s inflation moved to its highest in more than 27 years.
As the economic crisis is exacerbating the cost of living crisis in the country, it is also piling up pressure on the Central Bank of Nigeria to raise interest rates.
According to NBS, Nigeria’s interest rate rose from 28.20 per cent in November to 28.92 per cent in December, 2023, thus becoming the highest since May 1996.
Married citizens are mostly hit in this frightening level of economic downturn as they have their children and other relations to cater for.
However, couples appear to have been tightening their belts following the decline in birth rate in the country.
Report by Statista, a global data and business intelligence platform, showed that Nigeria ranked 20th on the list of countries with the highest birth rate on the African continent in 2020 with more than 37 births per 1,000 people, which accounted for 1.100 per cent growth rate from 2019.
But, in its recent report, another data gathering agency, Macro Trends, revealed that the birth rate started reducing since former President Muhammadu Buhari was rounding off his administration.
“As a transporter, I used to spend N15, 000 on fuel, from Onitsha in Anambra State to Okigwe in Imo State and the same fuel takes me back to my base, Onitsha. With the removal of fuel subsidy, I now spend N44, 000 worth of fuel on the same journey to and fro.”
“The current birth rate for Nigeria in 2024 is 35.683 births per 1,000 people, a 0.95% decline from 2023. The birth rate for Nigeria in 2023 was 36.026 births per 1,000 people, a 1.14% decline from 2022. The birth rate for Nigeria in 2022 was 36.440 births per 1,000 people, a 1.13% decline from 2021. The birth rate for Nigeria in 2021 was 36.855 births per 1,000 people, a 1.11% decline from 2020,” the report stated.
Small business owners lament low sales
Consequently, Nigerians have cried out to governments at all levels to do something urgently to fix the economy, groaning that life has become unbearable owing to the expensive cost of living.
Small business owners and traders have cried out over low patronage, noting that their situations are becoming more difficult on a daily basis.
A rights activist, Deji Adeyanju said, “As a common trader, I just got this from my partners: Dear Colleagues, Please note that due to high exchange rate, flour mills have stopped the sale of flour effective today (Saturday). The new price will be communicated to you.”
Speaking, an entrepreneur, Juliana Agmada, complained that “things are really becoming difficult daily. I know how much sales I made weekly in the past year, but the situation is worse now. We still keep pushing and hope it will work out some day.”
Another business owner, Awoyemi Opeyemi Eniola, lamented saying, “Small scale businesses are dying. Since I went to my shop last week, there have been no sales.”
How economic adversity contributes to crises in Nigerian homes
Investigations by The Point also revealed that many families are currently frustrated and heart-broken, as the current economic situation has strained the relationship between many wives and their husbands.
Narrating her experience in Asaba, Delta State, a wife and mother of three by name, Nkechi, said that the family was living well before the economic adversity set in, causing a serious dislocation in their lifestyle.
“We used to live in a two-bedroom flat that afforded us space to pack our household things. It also perfectly accommodated us. Ours is a family of five. So, it happened that my husband lost his job last year and we could no longer afford the rent. Early last year, our landlord gave us a quit notice when we could not raise the money to pay. He eventually threw us out of his house,” she said.
She said that her husband, Moses, decided to rent just a self-contained room. Now, there appears to be a misunderstanding between the couple as the husband has refused to allow Nkechi bring into the new place some of their property scattered outside in their former compound.
“I know that the one-room apartment is too small to accommodate all our property, but there are very important things that are very dear to me, and when I see them rot away, my heart bleeds. But my husband has insisted it is only our bed, radio and television set that must be in the room. He has even said that I should go back to the village until things normalise. You cannot believe it, anytime we want to dress up to go anywhere, we run to the place where we packed our clothes in our former compound to pick such cloth to wear. Such a lifestyle is eating me up,” she lamented.
According to her, all entreaties from friends and close family members to allow the wife and the children bring in the boxes containing their clothes and personal effects have failed to move him to change his mind.
Nkechi, a nursing mother, said that the situation has caused a serious crack on the wall of their marriage.
Another woman, Elizabeth, said that problem started in her family when her husband lost his job early last year and took to hanging out with some jobless young men with questionable character and has since taken to excessive drinking of alcohol that is always available in those circles.
“I am a petty trader; I sell those small daily needs just to augment my husband’s earnings. But early last year, things became so tough with his company that they retrenched over 50 percent of the workforce and he was affected. They promised to get back to them with whatever they are entitled to, but that has not happened. The sudden loss of a job without money so affected my husband that he has turned into another thing. The once-loving husband and father suddenly withdrew to his shell. He hardly smiles and laughs. He screams at everything at home as a result of frustration. The rosy relationship we once enjoyed has disappeared,” Elizabeth cried.
She blamed the husband’s woes on bad government and governance in Nigeria.
“This is what bad government has done to my family. I said bad government because for over eight years now, Nigeria has moved from bad to worse. The last administration wrecked the country. It was the effect of the bad governance that affected the company where my husband used to work. I do not blame the company because we could see that things were no longer going on fine because of the government’s policies. The Covid-19 also played a role; it affected everything, but bad government and governance killed good dreams,” she said.
Andrew, a father of two, who resides in Warri, Delta State, told The Point that his wife of seven years, decided to move out of her matrimonial home, because he failed to yield to her pressure to move abroad.
“I work with an oil servicing firm in Warri, though on a contract basis. But we lived averagely fine, until my wife began to mount pressure on me to consider relocating abroad. She would come and say to me, ‘you are too slow; I don’t know why I married you in the first place. Your mates are relocating abroad and you are not doing anything.’ She would say a lot of things, but I always told her that I was not in a hurry to leave my fatherland to permanently go live abroad. I came back home one day to see a note by my wife that she has moved out, and that until I change my mind, she would not come back,” Andrew lamented.
A transporter with a state-owned transport company in the South-East, Kingsley Ogbonna also narrated his own experience.
“Yes, the painful economic situation is largely contributing to crises in Nigerian homes, leading to an increase in marriage crashes being witnessed these days,” Ogbonna said.
“As a transporter, I used to spend N15, 000 on fuel, from Onitsha in Anambra State to Okigwe in Imo State and the same fuel takes me back to my base, Onitsha. With the removal of fuel subsidy, I now spend N44, 000 worth of fuel on the same journey to and fro.
“Fuel consumption takes almost all the profits accruable from the journey. The scarcity of passengers has also worsened the matter as people now prefer not to embark on trips but do their businesses through waybills to save cost. As a result of scarcity of passengers, the 18-seater bus that was fully loaded to Okigwe would come back to Onitsha empty. That is how a driver and vehicle owner end up having less than N10, 000 after working for a whole day as the company would have taken its own percentage.
“The disturbing aspect is that from that N10, 000, I am expected to maintain the vehicle and also provide for the family even when prices of motor parts and food items have skyrocketed. The children’s school fees are there. Yet, for the next two weeks, it could not be my turn to load and go to work, thus I’ll still borrow to repair the vehicle. Except for a good wife that understands these changes and pressures, there is the likelihood of quarrels and misunderstandings every day,” he said.
Ogbonna further said, “Bad leadership at state level is killing the company while bad leadership at the national level is choking us as the policies are totally unfriendly and have no human face.”
He recalled how his colleagues had lost their lives due to unfriendly policies of both state and federal governments.
“Due to these unfriendly policies, some of our colleagues have lost their lives because they were unable to meet up with their family obligations. A lot of fights ensue between husbands and wives to the extent that the men who can’t cope end up developing high blood pressure and because most times, there is no money for medical treatment, sudden death claims such lives. On the part of the women, sometimes, they decide to pack out of their matrimonial homes because they believe the marriage is simply not working.
“A colleague of mine a few months ago mixed cement with water and drank it, sat down and was waiting for death before one of his daughters came in and saw what was happening. With the wisdom of God, the girl rushed to the kitchen, took some spoonfuls of palm oil and gave it to the dad to drink. The oil neutralised the power of the cement and that was how the man survived.
“Following that, help started coming from that moment as he was supported with some cash to solve some pressing needs, including repairing his vehicle. That was how he changed his mindset from dying to living. Our political leaders should do things that would better the lives of the citizens of the country, especially the poor masses,” he advised.
Pointing out some negative effects of the challenging economy, Ogbonna said, “Even if families were having problems before, the current economic situation has worsened families’ ugly situations. Hikes in fuel price and inflation are forcing families to breakdown. It takes the grace of God to live together as a couple.
“Even the offspring of families are not spared. Some girls now go into prostitution and the boys take to robbery, yahoo-yahoo and yahoo-plus as well as all manner of crimes. The parents at this point may not have a say because they believe their inability to provide for their children pushed them into the crimes. This is the reason the crime rate continues to soar in our society.”
A police officer in Lagos State, Sarah Ogabi, affirmed that from the cases she handles on a daily basis, it is clear that a bad economy is seriously hampering healthy living and relationships in families.
She called on the government to support families with cash to support their businesses, material items as well as empowering the spouses with skills to help them cope and survive as a family.
On the other hand, Ogabi advised that couples who are not able to adjust and tolerate their partners should decide to separate.
“It is better to leave the marriage with your life than to die there. You need to live to take care of the children that God has given you,” she added.
Economists highlight causes of inflation, proffer solutions
While reacting to Nigeria’s dwindling Gross Domestic Products and inability of Nigerian governments to walk the talk on economic diversification as means of desisting from depending solely on oil and repositioning the battered economy, an economic historian, Dr. Adetunji Ogunyemi, called on the government to be honest about diversification.
Identifying the causes of worsening inflation and what led to the frustrating economic conditions of the country, Ogunyemi said lack of stable electricity, poor transportation system, bad road network among other infrastructural deficits were contributing significantly to the problems facing the nation.
“It is not good to continue the route of negative GDP growth, what is good to continue is to encourage production and see that our GDP growth is significant enough and to overtake the rate of growth in population. We can at least have a reasonable level of that balance, between population growth and GDP growth,” the lecturer at the Obafemi Awolowo University, Ile-Ife said
In his own submission, another economist, Ademuyiwa Adeyemi urged governments to block leakages and shore up Internally Generated Revenue.
Among other solutions according to him is that “the government should look into some untapped resources” and that state governments should strive to be independent on their own in terms of finance.
He said, “Inflation rate didn’t just increase year-on-year, it also increased on a month-on-month basis. So, that tells you that the pressure is quite on.
“Increasing use of Ways and Means has caused negative impacts on inflation despite the expansionary tightening we saw in 2022 and 2023. The Central Bank of Nigeria on the one hand will be tightening rates to bring down inflation and on the other hand, will also be printing naira notes. This is like an oxymoron through Ways and Means advances to the government. That is more like a zero sum game.
“Different times, we have had increases with FAAC allocation and these days, we hear FAAC share amounts in excess of one trillion Naira. There is also the issue of government borrowing to finance, particularly, consumption. Why does the government borrow to finance consumption, when there is an increase in FAAC that is not applied to productive activity, the result is what we have seen over the years in inflation.”
For Prof. Uche Uwaleke, Director, Institute of Capital Market Studies, Nasarawa State University, “There is a need for the Central Bank of Nigeria to be independent.”
“Not only instrument independence but operational independence. They should not allow politicians to intervene. The CBN is trying to tighten monetary policy and how to ensure that Ways and Means are not abused.
“Another problem is that a lot of currency is still in circulation and it is outside the bank. I will advise the CBN to focus on MPR to keep tracking rate going by previous experience. Given the major drivers of inflation, continuous rate hikes will not bring desired results.
“If we can have earnings from multiple sources, that would improve the supply of dollars and once the supply is improved, it means that the value of the dollars will start crashing naturally.”
“Insecurity is contributing to inflationary pressure. We need to walk the talk. The government has a lot of roles to play. More refineries should be built.
Until we see a reduction in the price of petroleum products, the inflation will still remain. Other refineries need to work and there should be improvement in power supply,” he advocated.
A Port Harcourt-based economist, Umar Ndagi, said that in order to determine the way forward, Nigerians need to know “the root causes” of the current inflation being witnessed in the country.
Ndagi noted that two government decisions were responsible for the inflation.
He said one was “the total removal of subsidy on PMS or petrol while the other was the floating of the naira.”
On the floating of the naira, the former banker said that when the government decided to allow the naira to determine its value based on the forces of demand and supply, “I knew that we were in for a very tough time.”
Adducing reason for his worries, he said that prices of goods and services would go up because the demand for dollars was usually greater than the supply of it in Nigeria.
“We do not have enough supply of dollars so the little dollars that will be available in the market, their price will be fixed by the forces of demand and supply and where you have more demand than supply, then you should expect the price of forex to go up.
“So, for every item that you are going to import, you are going to do so based on the present value of the dollar and you will have no option than to push the burden for the high value of the dollar to the end users which is the general market where people like me frequent to purchase what we want,” he observed.
Ndagi said the only way out was “to have a handle on the dollar” by addressing either the supply side of the dollar or the demand side of it.
On the supply side, he said it had to do with every source of dollars the country earns, like the sale of crude oil, manufacturing for export and agriculture.
Ndagi also stated that apart from the sale of crude oil which contributes almost 90 percent of forex requirements, the country’s manufacturing abilities could be jump started and our agricultural sector revolutionized and re-galvanized to start contributing to forex earnings.
“So, if we can have earnings from multiple sources, that would improve the supply of dollars and once the supply is improved, it means that the value of the dollars will start crashing naturally,” he said.
On the demand side, Ndagi said that Nigerians practically need dollars “for everything,especially to spend on PMS, AGO and aviation fuel.
According to him, this puts a lot of pressure on the demand for dollars.
However, he said a local refinery, like the one operated by Dangote Refinery, could be the game changer.
“Now, with Dangote Refinery about to fully commence production and distribution, that could be the game changer.
“If that happens within the shortest possible time and the government stops importing PMS, AGO and aviation fuel, the pressure on the dollar for the importation of these items I mentioned will not be there again because they will be produced and delivered locally.
“That way, once the pressure is taken off, it means there will be massive availability of dollars we will be making from the sale of our crude abroad.
“And when this happens, the value of the dollar will start crashing and once it starts, it means that the prices of goods and services that are mainly imported will start crashing,” he concluded.
