How Nigerian Households Are Combating Economic Crisis
Some days back, the National Bureau of Statistics (NBS) disclosed that Nigeria’s headline inflation jumped from 22.79 per cent to 24.08 per cent in July 2023.
The report led to an array of feelings comprising of worry, frustration and even disbelief.
The disbelief was far from whether the over 100 basis point rise was real. Instead, the citizenry complained that the report did not reflect the market reality.
The report read, “In July 2023, the headline inflation rate rose to 24.08 per cent relative to June 2023 headline inflation rate, which was 22.79 per cent.
“Looking at the movement, the July 2023 headline inflation rate showed an increase of 1.29 per cent points when compared to June 2023 headline inflation rate.
“On a year-on-year basis, the headline inflation rate was 4.44 per cent points higher compared to the rate recorded in July 2022, which was 19.64 per cent. This shows that the headline inflation rate (year-on-year basis) increased in July 2023 when compared to the same month in the preceding year (i.e., July 2022).”
The last time Nigeria’s inflation reached the 24 per cent level was in September 2005, when the rate was 24.3 per cent.
This is the seventh time there has been a rise in the country’s inflation this year.
The consumer price index (CPI), which measures the rate of change in prices of goods and services, rose to 24.08 per cent in July 2023, up from 22.79 per cent in the previous month.
On a month-on-month basis, NBS said the headline inflation rate in July 2023 was 2.89 per cent, 0.76 per cent higher than the rate recorded in June (2.13 per cent).
This translates to the fact that in July 2023, on average, the general price level was 0.76 per cent higher relative to June 2023.
It is no secret that inflation is the resultant effect of the removal of the fuel subsidy by President Bola Tinubu.
From May 29, when the subsidy was removed, the cost of transportation rose to over 200 per cent in some states.
According to reports, staple food items have increased sharply in the past three months.
For instance, rice has increased by approximately 27 per cent compared to the pre-subsidy removal era.
Bread, another staple food, has also seen an increase of over 20 per cent, while beans, tomatoes and other items have varied degrees of upward price shift.
The Federal Government, on its part, while trying to cushion the effect of the subsidy removal on food prices, released some palliative measures, including a directive that fertilizers should be made available to farmers and grains should be released from the strategic grains reserve to reduce the prices of the grains in the market.
However, the impacts of the policy statements have not been reflected as food prices remain at an all-time high.
The CBN, on its part, also raised the Monetary Policy Rate from 18.5 per cent to 18.75 per cent to control inflation. But with low financial inclusion and formal credit penetration, the restrictive monetary policy option has also not moved a needle.
How Nigerian Households Are Responding To The Inflation In Prices
In a bid to know how Nigerians are handling the inflation situation, a visit was made to the market in Iju Ishaga to speak with some people.
A woman, identified as Mrs Adeyemi, who came to the market to purchase some foodstuffs, said her family has currently cut down on the amount of animal-based protein they eat weekly and settled for plant-based protein such as beans.
Speaking in Yoruba, she said, “I have five children, my last born is three years old. Things are really difficult compared to before. We used to cook soup twice a week in my house but now it is just once. When we cook soup before we use meat and fish. But now is either fish or meat. We don’t eat meat and fish like before. I now introduce lot of vegetables and beans to my children so they can remain healthy. Even the amount of food we cook have reduced”
