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Inflation: Coping with decreased purchasing power

By Adeoye Temiloluwa and Ijeoma Thomas-Odia
12 June 2016   |   2:47 am
Despite attempts by the Central Bank of Nigeria (CBN) to rescue the naira in the face of dwindling revenue, the efforts have so far failed to yield positive result, as the economy...
Central Bank of Nigeria

Central Bank of Nigeria

Despite attempts by the Central Bank of Nigeria (CBN) to rescue the naira in the face of dwindling revenue, the efforts have so far failed to yield positive result, as the economy is having a toll on homes and business operators.

The National Bureau of Statistics (NBS) said in April, that Consumer Price Index (CPI), which measures inflation, recorded a relatively strong increase for the third consecutive month. The headline index, it said, increased by 13.7 per cent against 12.8 per cent recorded in March.

In April, the NBS posited that structural complaints also manifested spill over into electricity rates, kerosene prices, Premium Motor Spirit (PMS) prices and vehicle spare parts, which were the largest contributors to the core sub index during the month. These items, as well as other imported ones, continue to have ripple effects across many divisions.

Inflation has affected the prices of almost every item families need to survive and people are beginning to adjust their consumption pattern, as they complain that while prices are going up, incomes have remained the same, while salaries for some are not paid promptly. And the purchasing power is declining due to mass retrenchment by some organisations.

Mrs. Victoria Eke, a primary school teacher and a mother of four, said feeding her children has become more difficult, as she now considers skipping meals to make ends meet.

“With the meagre salary I earn, feeding my children is gradually becoming a burden. Foodstuffs are very expensive. Vegetables are no longer affordable, as you cannot now get it for as low as N50. The prices begin from N100 and above. That quantity is not even enough to feed a child; so you can imagine what it will take to feed a family of six.

“Seriously, I have considered skipping meals, as there are other expenses to consider than just feeding. It is really not easy for families at this time and we pray that God will see us through.”

Mrs. Ukoyen Osoro, a housewife and mother of two, also said prices are rising daily. She wondered why this should be so. “Yesterday, I went to buy my baby’s formula, only to be told that it is now N6,000. I used to buy the same quantity for N4,200. Another nursing mother said only a day before; she obtained hers for N5, 600. I argued with her, but now it’s N6, 000. I am just left in awe.The development has made us to adjust our spending and we focus on very important things.”

“My husband gives me house keeping allowance of N20, 000 bi-monthly”, says Mrs. Obi, who lamented that the amount is no longer able to sustain their feeding needs.

“I was forced to ask for an increase recently, as tomatoes have now become a big deal, and that is one commodity my children eat more because they are always asking for rice and stew. N500 worth of tomatoes cannot make a family meal anymore.

“The other day, I went to buy garri and was told that the quantity, which used to sell for N400 is now N700. I left the shop, but after visiting three more stores, I discovered that the price was the same. I returned home empty-handed, as I did not have enough money on me.”

For Mrs. Seun Daniel, a trader at Egbeda Market, sales have never been this bad because food items have become so expensive. Said she: “People no longer come to buy goods and it is really tough on us. We sit here all day and make insignificant sales. The few people that come around to price either leave without buying anything or buy so little. “For retailers like me, it has not been easy at all. Before, a bag of garri was sold at N3,800, but now, the price has gone up to N8,500. The price of a bag of rice has also gone up to N14,500 from N7,500, depending on the quality. A bag of beans, which used to sell at N20,000 now sells for N26, 000.”

Another market trader, Mr. Eke, who deals in unrefined groundnut oil and palm oil said: “Since I opened shop this morning, I have not sold more than a little quantity of palm oil, unlike before, when people used to flock to my store. Even buying from the wholesalers has not been easy. For instance, 25 litres of palm oil, which used to go for N6, 500 is now N7, 500 and a drum of groundnut oil that sold for N50, 000 now goes for N76, 000,” he said.

With the realities on ground, some housewives have also become creative and innovative in their cooking methods, as food requiring expensive ingredients have been replaced with cheaper ones.

Mrs. Okoro Ann said, “Since tomatoes have become expensive, I have been treating my family to Ofe akwu and Ogbono, as these are less expensive to cook. Putting meat or fish lavishly in the soup now depends on the strength of your pocket.”

Mrs. Aniemah Aweh, a caterer said: “Things have never been this bad. The cheapest ingredients, when baking cake used to be flour and sugar. A bag of flour that used to sell for an average of N6, 000 to N6, 500 is now sold at between N9, 600 and N9, 800.

“Whenever there is inflation, food prices are usually the worst hit, because it reduces the quantity money can purchase. Tomatoes have become scarce, and many women have resorted to tomato paste, which some of us don’t like. I would rather buy what I can. So, I have abandoned stew for sauce and gravy. Even when I want to make jollof rice at home I don’t use tomato paste, but I have to use it when cooking for events,” she said.