10 Feb

The SBM homemaker’s guide #2 – Tighten that belt

Markets across Nigeria have recorded quite a lot of changes under the various foodstuff categories over the past few months due to the overbearing influence of various factors that range from seasonal changes, reduced production, increased handling costs and weaker foreign exchange rates.

Though some of the increase in the price of some commodities were expected, a significant number of commodities recorded increases in price due to other contingent reasons that came up in the period under review like the petroleum product scarcity in October, and the plummeting value of the Naira in the foreign exchange market.

The scope of this report is from July 2015 to January 2016. Our reporters did not visit markets in December, 2015.

This report reveals that locally produced consumer goods have maintained stable prices over the last six months, while imported goods have maintained fairly unstable prices over the same period. The general upward trend will put a lot of pressure on people who are already grappling with other social challenges as irregular salaries, fluctuating pump price and availability of petroleum products, insufficient power, etc.

Food items, our survey pointed out, tend to increase in price as you travel south. However, garri bucked that trend as it is most expensive in Kano. A trader interviewed explained that garri is not a staple in the Kano area, and as such is less in demand.

An interesting local variation was noted in Abuja where prices tended to be higher in Wuse Market than in Nyanya. Traders interviewed indicated that this trend is based on the perception that shoppers in the Wuse area are more affluent. It was as simple as that.

Household consumables and personal hygiene products such as detergent, toiletries, and vanity items saw an average price increase of 27.15% in the Lagos area during the second half of 2015 and January 2016, while in Ibadan the increase came in at 18.01%. The increase in the Anambra area for the household items on our list averaged at 18.16%. However, in both Abuja and Kano, the increase in price of household items was comparatively tiny, 6.09% for Abuja, and 7.69% for Kano.

The overall picture does not look good in the short term. The upward trends of the price of consumer goods and economic hard times experienced amongst Nigerians which have led to the reduction in their purchasing power, are signs that we should expect a fall in the standard of living among Nigerians. This, coupled with Nigerians losing their jobs and delayed wages (more than 30 state governments owe workers’ salaries in excess of three months) mean that these people will increase the burden of their already strained relatives.

The government, at all levels, will need to play its part to curtail the persistent rise in consumer commodities, especially in areas that it has reasonable control over such as transportation, and by encouraging small scale farming across the country. Government also needs to invest in agricultural extension programmes to educate farmers on methods that will enhance production. Critical however to increased production is the stability and security of the North East and the North Central regions. Government urgently needs to address the security challenges so that farmers can return to planting. But, government intervention should be measured, in order to ensure that they do not make the situation worse by misguided helpfulness.

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Download the complete report (PDF, 15 pages)