Financial experts say the increasing inflation rate in Nigeria has impacted negatively on the living standard of Nigerians.
The experts who spoke to the News Agency of Nigeria (NAN), said the rising inflation rate has reduced the purchasing power of individuals leading to a decline in living standards.
According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate increased to 17.71 per cent on a year-on-year basis in May 2022.
The NBS also said that prices of selected food items had increased in the last 12 months in its latest Food Price Watch report in the same period.
Prof. Aminu Usman, of the Kaduna State University, said the rising inflation rate meant devaluation of individual income, which amounted to falling purchasing power.
Usman, a lecturer at the Department of Economics, said individuals would now purchase fewer commodities with the same given amount of money.
“This scenario implies that people’s living condition are deteriorating, especially for low-income groups, whose income is rigidly fixed while prices are skyrocketing.
“It signifies the descent of many poor to further poverty and worsening conditions of living.”
He said that a major contributor to the inflationary pressure was food inflation caused by rising food prices, adding “this is expected because the rains have set in and old stocks are finishing.
“This is coupled also with the high cost of fertilizer and heightened insecurity which combined to discourage farmers and farming. This has also caused very low projections for agriculture output,” he said.
Mr Ben Ekeyi, a Public Financial Management Consultant, said that Nigeria’s inflation rate had a negative impact on the purchasing power of Nigerians in diverse ways.
Ekeyi said one of the impacts included reduced ability to purchase needed and required goods and services, especially where there was no corresponding increase in income.
“Others are a lower standard of living, increased poverty level as Nigerians are increasingly unable to access necessary goods and services.
“Increased school dropouts, especially at primary and secondary levels. More Nigerian families have become unable to sponsor their wards’ education, thereby, leading to drop out from schools.”
He said that economists had established a link between lower purchasing power resulting from inflation and an increase in crime rate.
According to him, where households are unable to cater for the needs of their members, there is a likelihood that some will go into criminal activities.
Ekeyi also said low purchasing power had been linked to increased social vices like prostitution, thuggery, youth restiveness, and suicide rates among others.
He said that low purchasing power had also increased urban-rural migration, as some Nigerians living in the cities were gradually relocating to their rural communities to due to the high cost of living in the cities.
According to him, the low purchasing power also has the potential of leading to death.
“When a person is unable to meet basic needs, especially in the area of health care, he is most likely to die,” he said.
Mr Paul Alaje, a Senior Economist with SPM Professionals said with the high inflation rate,
it means that someone who had N100,000 this time in 2021, now has less than N85,000 this year for committing no crime.
“It means that the value of what money can buy has reduced. What is the implication? People will now be able to buy less.
“If they could buy two bags of rice before with their income, now they can buy less than two bags.
“Does it mean that hunger in the family has reduced? The answer is No. People are still hungry but their livelihood resources now have weaker purchasing power.”
Alaje said this situation may put several families in jeopardy as some members may lose their jobs because of the failure of their employees to pay them due to a decline in sales.
“So, when inflation and unemployment set in, you have what we call stagflation, that is a situation where people’s hunger, poverty and deprivation is elevated or increased significantly.”
He said the general socio-economic implication was an increase in the crime rate.
Alaje said the average inflation rate for a nation should be between three to five per cent but unfortunately, in the last seven years Nigeria’s inflation rate had been in double digits.
A cross-section of Nigerians who spoke to NAN said the increasing inflation rate had reduced their standard of living and made saving impossible.
Mr Isaac Ighure, a pensioner said the inflation rate had reduced his standard of living, adding that it was the same situation with many pensioners in the country.
Ighure said many families were “cutting corners ” in a good way just to be able to eat.
“Among pensioners and the elderly, inflation is wreaking a lot of havoc, we are barely managing to survive.
“Pensioners are on their own, they are suffering, the government does not support pensioners in any way and there is no policy for the elderly in general.
“How do you pay your children’s fees, pay rent, treat medical issues, etc, as a pensioner? Some pensioners are maintaining their graduate children who do not have jobs.
“You see many old people dying of hypertension because of all these problems. Their life span could be prolonged if the government can take the responsibility for the health of the elderly,” he said.
Mrs Tosin Ajayi, a Public Servant and mother of three, said the high cost of living caused by the inflation had become unbearable.
“As a mother and a public servant, it has not been easy to survive in today’s economy. You will not believe that 90 per cent of the family’s income is used for expenses. You cannot save anymore.
“The cost of living is high and it is becoming unbearable for everyone. From food items to other consumables, gas, electricity, etc, it is worrisome.
“What I do as a mother is to tell my kids the reality on ground. I tell them that it is unacceptable to waste food and to be appreciative of what your parents give you.
“We are calling on the Nigerian government to seek out ways to reduce the inflation rate, 17.7 per cent rate is unacceptable to us. This is crucial to prevent crime rate and illegal activities”, she said.
Mrs Lynn Ikechukwu, a housewife and mother of three, said the inflation rate had made it difficult for her to plan and budget for her home.
“It is not easy to plan and budget with the increasing inflation rate. For instance, between September 2021 and May 2022, the cost of diapers has gone from N6,000 Naira to N7,000, to 7,500 and now N9,500.
“Every time you go to the market the price of food items keeps increasing, now it is almost impossible to buy tomatoes. You have to forgo some food items. Tell me how someone can plan in such a situation?”
Ms Chioma Ibeh, an online food vendor, said the inflation rate had resulted in a decline in customers which had slowed down her business.
“The prices of food have increased enormously. For almost every food item I buy, the prices have increased to as much as N2,000.
“Before my 2.4 litres of edikaikong soup used to go for N15,500 and N16,000 but now I sell for N18,000 to N18,500.
“When I tell clients the amount for a particular size bowl of soup or stew they complain and say it is too expensive. But at the end of the day that is the reality of the situation in the country.
” I wish the economy can have a balance because inflation is making my business very slow.
“In a week, I can go without having any food orders and this is bad for people like me that have this business as my only source of income, how do I pay my bills?”
Mrs Amaka Eze, a market woman, said the increasing inflation made it impossible for her to make profit from sales, adding that things had never been this bad for her business.
” Since I started this business of selling foodstuff, I have never seen anything like this before. I used to buy a carton of Titus fish for N20,000, now it is between N40,000 to N45,000.
“A carton of Panla used to be N6,000 now it is N12,000. I buy a dustbin basket of tomatoes for N4,000, people are no longer coming to buy food items like before because there is no money.
“It is so bad that some decent guys even come to my shop to beg for a cup of garri to drink because they have no money to buy food to eat,” she said.
NAN recalls that the World Bank’s latest Global Economic Prospects Report said the damage from COVID-19 and the war in Ukraine had intensified the slowdown in the global economy.
The report said this had led to a period of weak growth and increased inflation, which had raised the risk of stagflation, with potentially harmful consequences for middle- and low-income economies alike.