" /> > Nigerians lament economic hardship, high cost of living | Hallmarknews
Published On: Tue, Sep 6th, 2016

Nigerians lament economic hardship, high cost of living

These are not the best of times for Nigerians especially those whose incomes are fixed. Their N18, 000 minimum wage can barely buy much in the market as prices of almost all the items have gone up by at least 70% from what they were as at late last year.

The fact that this spike is coming at a time when the salaries of both public and private sector workers are no longer paid as at when due, also makes it even more excruciating to the extent that virtually everyone is lamenting.

This is also a time when mass retrenchment and pay-cut have become the order of the day for organisations struggling to remain in business.

A crash in the price of oil, the mainstay of the Nigerian economy and a resultant fall in the value of naira had fueled inflation from 8.2 percent in July 2015 to 17.2 percent in August 2016. More worrisome is that the country has slipped into a recession as GDP fell to -2% in the second quarter 2016.

Over two million Nigerians have lost their jobs since the inception of the Buhari administration. Many of those who still work have either had their salaries slashed or hardly get them regularly.

The situation is an unfortunate result of businesses, especially those who depend on imported raw materials, trying to cut costs in order to remain alive. With smaller federal allocations, state governments are not left out in the survival strategies.

Only recently Governor Rochas Okorocha of Imo State came up with a policy of civil servants working only 3 days and spending the remaining 2 days in the farm.  Governor Samuel Ortom of Benue State similarly asked the state workers to work from Monday to Thursday and go to their farms on Fridays.

By their actions, commentators wager that the two governors are only seeking justification to slash salaries to a level they feel the dwindling fortunes of their states can accommodate. The Nigeria Labour Congress (NLC) is vehemently kicking against the moves, even as the Minister of Labour, Dr. Chris Ngige has also called the move unconstitutional.

All of these however translate to hardship for the workers and their dependants at a time living gets more expensive by the day.

Market surveys conducted across Lagos State and some other parts of the country confirmed that prices of commodities have actually increased by over 70 percent.

At the Mushin Market, it was discovered that the prices of imported food items, cosmetics and beverages, among others, witnessed over 60 percent hike from November last year. This has automatically provoked a price hike by retailers.

At Idumota and Balogun markets, Business Hallmark learnt that importers and retailers of fashion wares and textile materials have increased the prices of their wares as a result of the unstable exchange rate.  The prices witnessed over 50 percent rise as a result, leading to low sales.

A businessman who imports fashion wears from China, Hong Kong and India, Mr. Chidebere Onyeachonam, told Business Hallmark: ”The prices of our goods have gone up by nearly 70 percent of what it used to be late last year. It is only a few people who can afford to travel, and they are the ones fixing the current prices.  Majority of us don’t travel anymore. In fact, a lot of the products that are in the market today were bought in at exorbitant prices.”

Findings at Oyingbo, Iyana Iba and Ikotun markets revealed that prices of food items have gone up astronomically. Specifically, prices of commodities like rice, garri, beans, yam, wheat and semovita, among other basic items, have soared beyond the reach of many families.

A 50 kilogram bag of lower grades of rice which sold for N9000 in December, now sells for N18 000, while the high quality grades now sell for between N20, 000 and N22, 000. Also a big basin of gari which sold for N1, 500 now sells for N3, 000 while one paint bucket of it which was selling for N200 now sells for N700.

As for the five kilogram  and 10-kilogram sachets of semovita which were selling for N1,100 and N2, 200 before, they now sell for N1,500 and N3,000, respectively, even as the price of a five kilogram of wheat which previously sold for N900 now goes for N1,500.

A five-litre keg of groundnut oil which was selling for N1, 700 before, is now selling for N2, 500, while its 3.8ltrs counterpart now sells for N2, 200, as against former price of N1,600. A bottle of groundnut oil previously sold for N220, now goes for N350, just as a big keg which formerly sold for N6, 500, now goes for N12, 000.

A 20- litre keg of palm oil that sold for N6, 000 is now selling for N11, 500, while a bottle which was selling for N200 before, now sells for N400. Also, a three-litre keg of red oil which then sold for N1000 at Ore, Benin and other points along Benin/Ore Expressway, now goes for N1900.

Similarly, a carton of turkey which sold for N7000 in December now sells for N12, 000 while a kilogram previously sold for N800 now goes for N1300. A bag of sachet water popularly known as pure water which used to sell for between N70 and N80 now sells for between N120 and N150 depending on the area. A 12.5 kilogram cooking gas which sold for N2, 500 now sells for N, 4000.

Perishable food items

Even as yam is not expected to be expensive at this time due to excess supply in various markets, five tubers which sold for between N1,500 and N2,000, depending on the size, by this time last year now sell for between N3,000 and N4,000.

The survey also showed that the price hike affected the price of beef, as one goat leg which formerly sold for N1,500 now goes for N2,500 while the neck now sells for N1,500 against the former rate of N1000. However, perishable items like tomato, pepper and pumpkin leaves still sell at normal prices but are likely to get more expensive once their seasons are over.

While the volatility in the exchange rate is primarily responsible for the soaring prices of imported items, the increase in the prices of other (locally) produced items seems to be a puzzle to many.

Reacting to the situation, a trader at Ojodu Retail Market, Mrs Ogechi Okoro, said: ”I have to be truthful to you; what we have now is a situation whereby people increase prices because prices of imported items have increased. Yes, I can say that most things I sell are not imported because some are produced in Lagos, Agbara, Kano and Aba but this is an opportunity to make money.

“In any case, the raw materials of some of the things sold in Nigeria are sourced outside the country. So looking at the big picture, the exchange rate is responsible. The government needs to act now because things are getting out of hand; it may get to a level where it would become uncontrollable.

Do you know that some customers who hardly buy on credit, now sometimes buy to pay at a later date? ”

A house wife, Mrs Joy Inegbedion, corroborated Okonkwo’s revelations, adding that ”the situation is frightening.” Continuing, she said: ”I had most things at home and only went to the market to buy meat and a few things with N10,000 only to discover that I could hardly buy much things. The prices of most food items have tripled, thereby affecting the purchasing power of most homes like mine.  My husband earns about N160,000 monthly while my take home where I work at the airport is N45,000. How do we cope when our children are all in school?  It is hell living in Nigeria now.”

An ND 2 Mass Communication student of Yaba College of Technology, who simply identified herself as Mary, observed that prices of food and transport have gone up, making the money given to “you by your parents insufficient to transport and feed yourself well.”

“Transport and food, in fact, everything now is costly and your parents can’t even increase the money they give you because it is not even easy for them,” Mary noted.

“So it’s left for you. Sometimes you discover that after transporting yourself you’re left with nothing and you just have to starve.”

A businessman in Enugu Mr. Ikechukwu Asiegbulem, lamented: “What is happening in the country does not make economic sense. You buy things costly, you increase the price a bit in order to make some profit and you can’t even sell much because people don’t have money. Yet you have to increase your wife’s upkeep allowance due to inflation.”

Mr. Takon Okongor is a federal civil servant in Calabar. He said he now uses his private car for taxi at the close of work as a way of making extra income to make ends meet. “My salary cannot take my family anywhere due high cost of living in the country today,” Okongor noted.

Desperate measures

Speaking on the matter, an economist and Managing Director of Brokers Assets, Dr Tayo Moyegun, expressed sadness over the general soaring prices, noting that the situation demands desperate measures. ” It is a terrible situation. Daily, it is getting out of hand. I don’t think the response to this by concerned authorities is satisfactory. From experience, it could be said to be understandable that the scarcity of dollars has affected the propensity to import. That, by extension, has affected the prices of imported items because people can fund imports,” he noted.

However, he said: ”What baffles the market now is that other products that could be sourced locally without foreign exchange have also witnessed a sharp rise in the prices. What is the justification for that? What concerns the fisherman and yam farmer at Ilussi in Edo State with exchange rate? ”You may be shocked to know that people have capitalised on the dollar issue to inflate prices of items that ought not to have gone up.”

On his part, a member of Abia State Chamber of Commerce, Chief Marcilunus Chilaka, said since Nigeria is a mono-product economy, the current hard times should not be surprising to anyone. He, however, suggested government should urgently look into the artificial price hike with a view to sanctioning those exploiting the masses.

”The very poor are the most affected because the rich have enough; the poor whose income have remained stagnant are paying out of nothing. That is why the situation is pathetic and calls for government intervention,” Chilaka said.

In addition, he said: ”The authorities should not look the other way and pretend as if people are not suffering; Nigerians are suffering. How can civil servants, whose pay are lean and irregular, cope at a time like this? Some have suggested price control board, but while I am not calling for it, I think it is not a suggestion that should be discarded. Though it was not much of a success when we had it in the past but who knows if it could make the needed difference now?”

”Commodity price control board can save the masses from the current hardship where a woman who sells fish and pumpkin leaves would tell you that dollar is high and for that reason, the price of what she sells has to go up,”  Mr.Gbenga Oluwabamise, a banker with one of the old generation banks  said.

Continuing, he said: ”Government needs to do more to protect us from exploitation by the suppliers. By doing this, basic goods will become affordable to all the citizens. Irrespective of the arguments against it, I strongly think when that is done, the rate of inflation will be controlled. They can do this by ensuring that all the producers in the market has a minimum income for their producers.”

But how did Nigeria get here?

Mr. Emmanuel Nwachukwu, a policy specialist and international business consultant speaks: “At the height of the oil boom when oil was trading at over $100 a barrel, Gulf states like the United Arab Emirates, of which Dubai is part, invested their oil wealth in public infrastructure.  They built roads, modern railways, power stations, world class health facilities and one of the world’s largest airlines.  In Nigeria, the opposite was the case; the establishment literally “shared the money”.  What they could not steal, they paid themselves in outrageous salaries.  A minister in the last administration was reportedly earning as much as N15m a month, more than the combined salaries of the US president, the British prime minister, the French president and the German Chancellor.  Like scoundrels, the treasury was looted with reckless abandon.”

Way forward

On how to get out of the economic quagmire, Nwachukwu advises:  “First, the government must listen and learn. President Muhammadu Buhari, desperately needs good seasoned economic advisers, wherever he can find them.  The current Governor of the Bank of England was recruited from Canada.  We need a think tank of very smart people to advise government on economic direction.

“We must improve our budgeting process and implementation system at both the federal and state tiers of government to make budgeting smarter and more accountable.  Government must “follow the money” and ensure that budgets deliver the right choices.  It is puzzling, as someone who has led the budgeting process in public sector institutions, why Nigerian governments think it is acceptable to start the implementation of the budget half-way through the fiscal year.

Challenging the government on the promise that normalcy would soon return Nwachukwu said: “It is not enough for ministers to just tell Nigerians that things will turn around at the end of the year. Where is the plan? Where is the strategy? Where are the timelines setting out government proposals for addressing our power issues and other deep challenges?

“What is the strategy for creating jobs and growing the economy? What is the strategy for improving the current tax system to increase revenue generation and collection? The government must articulate its plans, with deliverables and timelines. It is scandalous that rich people pay little or no taxes in Nigeria.”

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