These are indeed trying times for most Nigerians as hike in import duty, high fuel prices, high electricity tariff, naira devaluation, all culminated in higher commodity prices across the country, raising inflation rate from 9.6 percent in January 2016 to 18.55 percent at the end of the year, according to the National Bureau of Statistics (NBS).
These government policies directly lowered living standards among Nigerians, whose disposable incomes were not adjusted upwards, throughout the year under review.
Investigation by The New Diplomat reveals that the prices of nearly all food items and household utilities like cooking gas and kerosene have skyrocketed.
A bag of rice which sold for about N7, 000 in January 2016 now goes for N18, 000, a bag of beans that sold for about N20, 000 in 2016 is now selling at N40, 0000. A bag of Gari sold for N6, 000 in the early part of 2016 but is now selling at N10, 000.
Cooking gas and Kerosene appear to be the worst hit as a 12.5kg of Gas which sold for about N2, 200 at the beginning of 2016 is now selling at about N5, 000 while a litre of kerosene has shot from N120 to N400 in January, 2017.
Desmond Ike, while reacting to the increasing cost of living and its effect on Nigerians, said the price of staple foods such as rice, beans, cassava flakes are now slipping out of the hands of average Nigerians.
“We never had it this bad in this country. Most families can no longer afford three square meals. Some families have resorted to begging and getting food items on credit. Almost everybody is really lamenting these hard times and the high prices of food items in the country,” he lamented
David Aluya-Ovih while lending his voice to the lamentation, declared:
“The money I spend in buying foodstuff has doubled compared to last year.” He disclosed that “what is most important to his family now is how to feed before thinking of pleasure.”
According to Financial Derivatives Company; a leading source of business information, economic data, research and analysis in West Africa, one of the factors responsible for this menace is ,the increasing prices of diesel and alternative power for processing and logistics.
Investigations revealed that series of policies embarked upon by the Nigerian government in 2016 aimed at making the economy more productive, following a crash in the prices of crude oil, the government’s major source of income, are partly responsible for the increase.
The crash in oil prices slashed government earnings by over 50 percent, leading Nigeria to “desperate measures in desperate times”.
The first was the rise in electricity tariff across the nation.
The government followed up with a spike in the price of petrol from N87 per litre to N145 per litre.
Mid-way 2016, the CBN allowed the naira to “free float” effectively devaluing the local currency from N197 per dollar to N305/$1.
Recall that The International Monetary Fund (IMF) at a time also posited that Nigeria’s crisis is not just because of a crash in oil prices, but because of the delayed and poorly managed policy adjustment
The fund said “inflation has risen to troubling levels” owing to delayed adjustments and the country’s foreign exchange policy.
However, FDC in its outlook is optimistic that although price movements still maintain an upward trajectory, there is an optimism of a possible reversal in the nearest future.
“Although price movements still maintain an upward trajectory, we are optimistic of a possible reversal in this direction in the near future. This is attributed once again to waning base year effects that cannot be ignored. This is also due to reduced spending power as consumers recover from expenses from the festive season and school fees requirements. However, consumers have to be wary