Consumers Groan Over Rising Inflation
There is no denying the fact that not a few consumers are groaning under the increasing rate of inflation which has made most essential goods and services to be unaffordable across markets. Ostensibly to buttress the unfavorable market situation, the National Bureau of Statistics (NBS) in its recent Report on inflation says the inflation rate rose to 20.52 percent August 2022.
In its report titled, ‘CPI and Inflation Report August 2022’, the Bureau stated, “In August 2022, on a year–on–year basis, the headline inflation rate was 20.52%.
“This was 3.52% points higher compared to the rate recorded in August 2021, which was (17.01%). This shows that the headline inflation rate increased in the month of August 2022 when compared to the same month in the preceding year (i.e. August 2021).”
“Meaning that in August 2022, the general price level was 3.52% higher relative to August 2021. On a month-on-month basis, the Headline inflation rate in August 2022 was 1.77%, which was 0.05% lower than the rate recorded in July 2022 (1.82%).
“This means that in August 2022 the headline inflation rate (month–on–month basis) declined by 0.05%. The percentage change in the average CPI for the twelve months period ending August 2022 over the average of the CPI for the previous twelve months period was 17.07%, showing a 0.47% increase compared to 16.60% recorded in August 2021.”
The situation, no doubt, has eroded Consumer Confidence in the country as most products and services are by each passing day becoming unaffordable.
The situation has no doubt become glaring so much that it is unarguably challenging for households as prices of major food items increased across major markets in the country, particularly in Lagos State.
A staggered survey carried out shows that prices of foodstuffs in most markets in Lagos in recent times have become unaffordable.
For instance, the average price of 50kg bag of rice in Lagos is between N33, 000 and N36, 000 while 25kg bag of rice costs between N16,000 – N18,000.
At this juncture, it is expedient to say that there are primarily two types of rice in Nigeria: branded rice (popularly known as foreign rice) and local rice.
In the same vein, there is Mama Gold, which is a well-known brand of rice in Nigeria, which is made by a Thai company with a low starch level and is easy to cook (parboiled). Its prices; depending on the size, range from N33,000 to N36,000 for 50kg, N16,000 to N18,000 for 25kg, and N7,500 to N9,000 for 10kg.
The Stallion group of companies produces Royal Stallion, a foreign rice sells it brands at the following rates: N29,000 to N30,000 for 50kg, N15,000 to N20,000 for 25kg, and 10kg Bag of Rice Price of Royal Stallion range from N8,500 to N10,500
As for Ofada rice, which is a local Nigerian rice that derived its name from Ofada Community in Ogun State, its price ranges from N15,500 to N18,500; depending on the kilogram.
Virtually all prices of foodstuffs are soaring beyond the reach of the people as the impact inflationary rate is impacting on virtually every commodity in the market by each passing day becoming unbearable.
However, some of the respondents in an interview were unanimous in their views that this is a time when a market economy should be allowed to come to play, saying that it is the market that adjusts prices, depending upon the principle of supply and demand.
From the standpoint of the economists, they argued that market automatically adjusts prices and government intervention is not needed.
According to those who advocated for the protection of the consumers, when market failure arises, it is normal for governments to intervene.
They also agreed that what is happening now is that so many brands in the consumer good market are being sold at exorbitant prices, irrespective of production costs, and added that the worst scenario can be seen in food items across markets in the country.
Against the foregoing background, our correspondent checks on markets where household items are sold showed that prices of household items as speculated by consumers at different forum last few days, confirmed a rise by the day.
In the same vein, report gathered from Warri in Delta State showed that there was unprecedented price increase across the city as residents went to markets for last-minute shopping ahead of the Yuletide, barely a day to Christmas.
According to the shoppers, business activities across markets in the city were characterised by high cost of goods and services. But in spite of the high prices of foodstuff, some residents in the area still managed to come out to the market to see what they can purchase.
Conversely, most of the traders expressed dissatisfaction over low sales this year, blaming it on the economic situation, and were unanimous in their views that the situation had negatively affected the sales of goods and services as sales were drastically slow for virtually every foodstuff across the markets.
Mr. George Onwuka, a consumer activist said: “The goal of the CPI is to measure the cost of living and show the effects of inflation on individual consumers”.
He opined that the rate as recently released by NBS was not spurious as its accuracy currently reflects across Nigerian markets, saying that the prevailing inflationary rate in the country goes beyond household items.
He nostalgically recalled, “The amount of money needed today to buy any given household item would have in the past been used to buy more than two items.”
Ralph Imagbon, a civil servant in his own opinion said, “As the CPI released by the NBS indicates, it is very glaring that the chances of the consumers in all sectors of the economy making a fair bargain in markets would be dicey”.
Our correspondent reports that there is hope for consumers as many experts in their reactions were undivided as they proffered solutions and urged Nigerians to develop an appetite for locally-made products as it remains the only measure to adopt by everyone towards the curbing of the rate of inflation in the country.
Wilson Igbinoba, a consumer in his reaction to the latest CPI recently published by the NBS said: “There is hope for consumers across the country only if they start buying locally-made products.”
He concurred that the patronage of locally made goods would no doubt curtail the high demand for foreign currencies and reversed the high inflation trend.
Speaking further, he also urged the federal government to stop the importation of fuel to curtail the rising inflation rate, adding that the government should encourage exportation to some extent in order to boost its foreign exchange portfolio.
“I understand that a huge percentage of foreign exchange might have been going into the importation of various products instead of the other way round.”
Against the foregoing background, he explained that other options abound to re-engineer the economy in this regard, explaining that since Nigeria is an import-dependent and monolithic economy, it was not surprising that the CPI has kept increasing steadily by each passing month in recent years.
However, he stressed that the high exchange rate of the Dollar to Naira has for so long remained high to the Dollar in the parallel market, saying that it was one of the reasons that the rate of inflation as measured by the CPI has over the years remained high.
He added that the crisis in the North- East had also drastically affected agriculture, which used to be the mainstay of the economy in the zone, with multiplier effects on the other zones.
Igbinoba said: “Those that were trading in cattle, fish, beans and other produce are no longer doing that because of a lot of people are displaced. In addition, there has been so much reckless spending by among the politicians.”
He noted that whenever the interplays are reversed that the consumers would no doubt exude confidence.
Professor Stephen Onyeiwu, Don and Chair of the Economics Department, Allegheny College based in Meadville, Pennsylvania, the USA in a presentation some time ago opined that “Nigeria urgently needs a massive economic stimulus programme. If he can summon the energy, Buhari should significantly increase spending in sectors, projects and programmes that boost the economy generate employment and promote inclusive growth.
He advised the government to prioritise infrastructure, labour-intensive manufacturing such as textiles and footwear, agro-processing, youth entrepreneurship projects, health and education.
Other stakeholders who took the same position were unanimous in their views that “fixing” the economy would no doubt ameliorate the receding inflation and have consumer confidence restored.
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