Nigerians Groan as Commodities, Services, Other Price Increases Hit Decade-high

Raheem Akingbolu

The cost of living crisis in Nigeria has reached alarming level as prices of goods and services continues to rise, making it impossible for ordinary Nigerians to feed.

Two years after the COVID-19 pandemic, Russia’s invasion of Ukraine that led to major supply shocks, monetary and fiscal stimulus have propelled the world into multi-decade high inflation.

Recent discoveries have shown that the poorest are suffering the most painful consequences, particularly those in Sub-Saharan Africa (SSA).
In Nigeria and some other African countries, the situation appears worse as currencies have depreciated by as much as 10 per cent on average against the US dollar.

This has made imports more expensive and aggravated the already high debt burden – 60 per cent of which is external.

In recent years, food prices have been on the rise across Nigeria. The situation deteriorated due to the impact of government policies such as the removal of subsidies on petrol, among others.

In a recent report, SBM Intelligence, a market research firm, said the continuous surge in the price of goods and services in Nigeria has remained the highest in more than a decade.

By implication, this has delivered a devastating blow to the consumers across board.

As things stand, this development appears to have wiped out the meager incomes of the average household in the country, thereby eroding their purchasing power.

Numbers released by the National Bureau of Statistics (NBS), two months ago, showed that inflationary pressure in Nigeria has continued on the rise. The NBS data showed that headline inflation increased to 31.70% relative to the January 2024 headline inflation, which was 29.90%.
This implies that in February 2024, the rate of increase in the average price level was more than the rate of increase in the average price level in January 2024.
The February 2024 inflation rate showed an increase of 1.80 per cent when compared to the January 2024 headline inflation rate.

SBM Report

In a report, that captured 64 goods and services, Premium Motor Spirit (PMS), Coca-Cola, and Guinness Stout are among the essential commodities whose prices keep increasing as inflation bites harder in Nigeria.
According to a price index analysis for Q1 2024, by SBM, PMS, Guinness, and Coca-Cola increased at the percentage of 160.0 per cent, 114.0 per cent, and 100.0 per cent respectively.

A breakdown showed that PMS moved to N681 in Q1 2024 from N650 in Q4 2023 as against N617 and N345 in Q3 and Q2 of 2023. Guinness Stout drink had its price jacked up to N1500 from N1000 and N900 in Q4 and Q3 of 2023 respectively. Coca-Cola, a fast-moving consumer good, had a 100 per cent price increase to N400 in Q1 2024 from N300 and N250 in Q4 and Q3 of 2023 respectively.

The list comprising 63 companies that cut across various sectors of the economy ranked Dudu Osun and Indomie as number one and ten.
Dudu Osun had its price hiked to N1400 in Q1 2024 from N1000 and 800 in Q4 and Q3 of 2023.

NBS inflation report

In its inflation report recently, the NBS said the contributions of items on the divisional year-on-year level to the increase in the headline index are food & non-alcoholic beverages (17.20%), housing, water, electricity, gas & other fuel (5.56%), clothing & footwear (2.54%), and transport (2.16%),
Others are furnishings & household equipment & maintenance (1.67%), education (1.31%), health (1.00%), miscellaneous goods & services (0.55%), restaurant & hotels (0.40%), alcoholic beverage, tobacco & kola (0.36%), recreation & culture (0.23%) and communication (0.23%).
The percentage change in the average CPI for the twelve months ending March 2024 over the average of the CPI for the previous twelve-month period was 27.13 per cent, showing a 6.76 per cent increase compared to 20.37 per cent recorded in March 2023.

The food inflation rate in March 2024 was 40.01 per cent on a year-on-year basis, 15.56 per cent points higher than the rate recorded in March 2023 (24.45%).

Meanwhile, the bureau said the rise in food inflation on a year-on-year basis was caused by increases in prices of garri, millet, Akpu uncooked fermented (which are under the bread and cereals class), yam tuber, water yam (under potatoes, yam, and other tubers class), dried fish sardine, mudfish dried (under fish class), palm oil, vegetable oil (under oil and fat), beef feet, beef head, liver (under meat class), coconut, watermelon (under fruit class), Lipton tea, bournvita, milo (under coffee, tea and cocoa class).
“On a month-on-month basis, the Food inflation rate in March 2024 was 3.62 per cent, which shows a 0.17 per cent decrease compared to the rate recorded in February 2024 (3.79%).
“The average annual rate of Food inflation for the twelve months ending March 2024 over the previous twelve-month average was 31.40%, which was an 8.69 per cent points increase from the average annual rate of change recorded in March 2023 (22.72%),” the report said.
In a related development, the cost of preparing a pot of jollof rice, a popular delicacy among Nigerians, rose from N13,106 in October to N16,955 in March 2024, a report by the firm has also established.
It disclosed the 29.3 per cent rise in the cost of preparing the delicacy in its latest report titled, “The SBM Jollof Index Q1 2024: Crisis at the table.”
The SBM Jollof Index tracks how much it costs to make a pot of jollof rice across 13 markets in six geopolitical zones for a family of five and uses the figures to measure the inflationary trends in the country.