Households lament, may spend 54.9% income on food, shun investments

•Citizens decry impact of fuel price hikes on commodities

A new Central Bank of Nigeria (CBN) survey has shown that the rising inflation rate in the country will force Nigerian households to spend the largest chunk of their income on food in the next six months.

The report also revealed that the majority of citizens are not thinking of investments at this time because food has become their main priority. The report came amid cries from several quarters in the country of the impact of fuel price hikes on commodities, especially foods.

Indeed, the National Bureau of Statistics (NBS) had put the headline inflation in July 2024 at 33.40 per cent while food inflation was 39.53 per cent. Though these showed signs of deceleration on a month-on-month basis, the rates are still much higher than they were a year ago.

According to the CBN report, the poll was conducted from July 22 to 26, 2024, with a response rate of 99.7 per cent with its sample size drawn from the NBS master sample list of 1,665 households in the 36 states of the federation and the Federal Capital Territory.

CBN in the report, titled: ‘Household Expectation Survey,’ said many Nigerians intend to cut down on items that are not essential now, in the next three to six months.

They, however, according to the apex bank, planned to spend 54.9 per cent of their income on food items in the next six months.“Spending on the outlook for the next six months showed that consumers plan to spend a substantial amount of their income on the following items: food and other household items, 54.9 per cent, education, 35.4 per cent, transportation, 30.2 per cent, electricity, 20.0 per cent and medical expenses, 12.2 percent,” the survey showed.

On the flip, the respondents do not plan to spend a substantial amount of income on big-ticket items such as the purchase of a house, car and household appliances.

Also, Nigerians do not intend to spend on investment, such as acquiring landed properties or other forms of investments. They equally do not plan on saving their incomes.

“This reflects their family financial situation in the current month and reaffirms their stance that they will be drawing down on their savings or getting into debt,” the apex bank survey showed.

The overall perception of inflation in July 2024 showed that 83.7 per cent of the respondents
believed that the current level of inflation was high with an index of -61.1 per cent.

A breakdown of the responses revealed that businesses at -58.7 points have a slightly lower index compared to households (-63.3 per cent). This indicated that businesses were less pessimistic in their outlook as their current month inflation rate perception is slightly better than that of the households. A further breakdown showed that large businesses believed that the current level of inflation was too high with an index of -70.8 per cent.

Further breakdown by income group revealed that respondents in the ₦150,001-₦200,000 income group believed that inflation in the current month was too high with an index of -66.4 per cent.

The above ₦200,000 income group, which stood at -58.3 index per cent, had a less negative index, indicating the least pessimism on inflation expectation for the current period.

The CBN survey revealed that many Nigerian households expect the naira to continue to fall over the next three months but become strengthened in the next six months.

The local currency plunged to ₦1,598 per U.S. dollar on Friday, ending the month of August negative. This is even as it further fell to ₦1,639 per USD due to the shortage of the greenback.

MEANWHILE, despite the intervention by the Federal Government to ensure the cost of staple food is reduced to the barest minimum across the country, citizens have lamented that the prices of foodstuff have continued to skyrocket following the cost of fuel selling at N1,000.

Many, who spoke with The Guardian lamented they are struggling to afford basic meals, as their income could not allow them to comfortably afford to meet the needs of their households.

This followed President Bola Tinubu’s broadcast on the recent nationwide #EndBadGovernance protest, where he told Nigerians that the price of a bag of rice has dropped to N40, 000 among other palliatives the government has put on the ground to cushion the effect of hardship on Nigerians.

This is despite the report that some staple foods, notably beans, yams, and garri, decreased this August. However, The Guardian market survey showed that the price of 50 kg foreign rice has not been reduced but rather increased to N83,500.

A visit by The Guardian to the Bariga market in Lagos State showed that a full bag of beans is sold at N290, 000, a bag of yellow and white garri sells for N50,000; a kilogramme of turkey is N7, 000 while a kilogram of chicken is sold at N4, 000.

The price of a carton of Indomie noodles (hungry man size) spiked by 28.8 percent in one month from N9,588 to N12,350. Also, the price of 1kg, 2kg and 5kg Honeywell semo increased by 38.1 per cent, 25 per cent and 18.7 per cent respectively between July and August.

In July, the price of 1kg Honeywell semo stood at N1,413, that of 2kg was N3000 while 5kg was N8,300. In August, the price of 1kg, 2kg, and 5kg semo is N1950, N3,750, and N9,850, respectively.

The rise in the cost of staple food has pushed millions of Nigerians, especially the vulnerable households. This is despite the declaration of emergency on food security by President Bola Tinubu in 2023. Food prices rose by 13.89 per cent in the last year from 26.98 per cent in June 2023 to 40.87 per cent as of July 2024.

A rice seller known as Iya Ibeji said sales have dropped drastically, stating that before now, she used to sell up to 10 bags of rice daily, but now she struggles to sell up to two bags.

Sharing his experiences also, Micheal Dike, who sells foodstuff, said until the price of fuel drops, the prices of foodstuff will continue to skyrocket.
Calling on the government to do something urgently, he said: “The fuel price is on the high side, and when the fuel is very high like this, it increases the price of foodstuff. Even transporters charge double. So, if you reduce the price of fuel, automatically all these prices that are coming from the North will reduce.” He also raised security concerns as a major issue, particularly for farmers, who face threats from Fulani herdsmen.

According to him, insecurity has prevented many from accessing their farms, further straining the food supply.”Some people in their states cannot even go to their farms because of security issues. The government is supposed to look into things like this. If there is the opening of borders and tackling the security so that farmers can go back to their farms, you will see that the food prices will come down. There is no magic about it,” he said.

Currently, the price of fuel sold at almost N1,000 at filling stations has now increased the cost of food, which has outpaced the N70,000 new minimum wage, which the government has not even begun implementing.

A customer at one of the popular foodstuff markets in Mushin, Lagos, Linda Adams, appealed to the government for relief, stating that the increase in fuel prices is again exacerbating the hardships faced by many citizens.

She said: “We do not ask for much from the government, just the basic support needed to thrive. Nigeria is very easy to govern because we don’t ask for much. We can struggle on our own. If the government can just do the lifting, we want to feel at home and not live like slaves.

“As the nation faces these escalating crises, the hope is that the government will heed the calls of its citizens and take decisive action to alleviate the growing burdens.”