Nigerians pay six times more for food since 2009

• Communication services see slowest inflation rate

Aggregate food segment of Nigeria’s consumer price index (CPI) jumped by a steep 510 per cent since January 2009 when the index was last rebased, a situation that has overstretched the survival of average families to a frightening level.

The price change implies that household budgets for food consumption have increased by over six folds in less than 13 years.

CPI, which is updated monthly, measures changes in the general price level over time.

According to data sourced from the National Bureau of Statistics (NBS) and analysed by The Guardian, the food category witnessed the fastest price increase for the period covering July 2012 to last month.

The impact of fast-rising prices of food on economic indices may have been softened slightly by the slow price change in communication services, which increased 115 per cent or slightly above two-fold growth in the period. The communication index is the least volatile among the 12 segments of the country’s CPI but its weighted average in the index is only 6.8 points or about 0.7 per cent share of the consumption basket.

While Nigerians have had to bear excruciating pains in picking their food bills, incomes have remained stagnant or fallen in some cases. The minimum wage, which applies mostly to civil servants, only rose from N18, 000 to N30, 000, an increase of less than 70 per cent.

Most private sector operators have not increased salaries in the period as rising unemployment has weakened employees’ wage bargaining power. In key sectors such as telecommunications and banking, entry-level salaries have not changed significantly in over a decade.

The divergence between spiralling prices of essentials and slow or stalled wage increase suggests that an average household is progressively poorer by the month.

Economists have warned that fast-rising prices affect the poor most as they either reduce the quality of their food intake or forfeit other expenditures such as education and health to retain their food consumption level. In the long run, generational poverty becomes more chronic, increasing the misery index level of the country.

Food inflation is a major concern in the country’s inflation mix, pushing up the general price level to a disturbing height. Food retains 507 points or 51 per cent of the CPI weighted average, a telling reflection of the impact of food on aggregate consumption.

In the past three years, the food crisis redefined its position as the major driver of the country’s headline inflation. The impact of volatile food prices is expressed in the gapping differential between the segment and core inflation (other items less farm produce). In July, the differential was 5.8 per cent while it was 4.9 per cent in the preceding month.

In the past decade preceding July 2022, food items have increased by an average of 300 per cent. Within the period, the index rose 135 points to its current 545.6 points. All-item index has, on the other hand, expanded by 240 per cent, rising from 90.2 points to 135.7 points.

Urban food index has also seen faster growth in recent years, rising by 527 per cent since January 2009. In the same era, the rural food index added 490 per cent. Experts have drawn attention to the role poor logistics and unsafe roads play in the widening gap between the prices of food in rural areas and urban centres.

The July Transport Fare Watch released by the NBS last week is revealing the negative impact of transportation on price stability. The report said the average fare paid by commuters for bus journeys within the city per drop, increased by 3.46 per cent on a month-on-month from N582.61 in June 2022 to N602.77 in July 2022.

“In terms of year-on-year, however, the average fare paid by commuters for bus journeys within the city per drop rose by 44.76 per cent from N416.38 in July 2021 to N602.77 in July 2022.

“In another category, the average fare paid by commuters for bus journey intercity per drop rose to N3, 758.46 in July 2022 indicating an increase of 2.61 per cent on a month-on-month compared to the value of N3, 662.87 in June 2022. On a year-on-year basis, the fare prices rose by 47.85 per cent from N2, 542.02 in July 2021,” the report stated.

The figures dwarf the country’s CPI growth, which stopped at 19.64 per cent in July.