Living For Today: Inflation Vs Nigerians’ Dreams
Esther Ifeyinwa spent a year saving up for the opening of her dream bakery. She had looked forward to starting her own business by the end of 2022.
But when she was ready to enrol at a catering school and eventually open a shop, inflation crept in to steal her joy. The prices of the equipment she needed and the cost of enrolment had almost doubled.
“I don’t know how to feel about it,” Ifeyinwa said. “It is disheartening how something I have no control over like inflation has deferred my project. I can no longer afford to buy the equipment I need to start the business for now.”
The rising prices of food items and commodities, inadequate power supply, and the weakening naira are eating deep into the purchasing power of millions of Nigerians, most of whom are one mishap away from falling into poverty. Africa’s biggest economy accounts for about 12 percent of the world’s extremely poor people, with 69.97 million of its people living below $1.90 (₦817 at ₦430 to $1) per day.
The latest figures from the National Bureau of Statistics put inflation at 20.52 percent in August, the highest since 2005, and it has been rising since the turn of the year. In addition, unemployment numbers have continued to climb. The last time the country’s statistics office released job figures in January 2022, Nigeria had a 33.3 percent unemployment rate, one of the highest in the world.
As the hardship continues to bite Nigerians, many are being pushed to the tipping point. The struggle with soaring prices forces them to buy their basic necessities in smaller quantities or to forfeit them altogether. Traders and consumers alike have been affected.
“Three weeks ago, I bought a pack of Wesson canola cooking oil for ₦32,000. Last Friday, I went to buy the same oil, but it had gone up to ₦42,000…in just three weeks,” said Veronica Ogbu, looking pensive in her market stall in Surulere, Lagos.
The worry about the uncertainty was immediately etched on her face. “This same carton of oil was ₦12,500 four years ago,” she added, dejection colouring her speech.
Tosin Ajani, a financial accountant in a top firm in the country, says it is harder to save towards things because “you can plan to pay for services or items but at the expected date of payment, prices have also doubled.”
Inflation affects the rich and the poor alike, and an exponential increase in one’s income does not guarantee protection from the rising prices of goods and services in the country. Tokoni Akosubo, an assistant at the Japanese embassy in Nigeria, confirms this. “Despite making more money, I do not feel closer to achieving all the goals I have set: having kids, vacationing, or shooting an indie film. More money just is not enough.”
‘Hungry man does not dream’
Thousands of households and businesses have had to adjust their spending plans to cope with the new realities. In some cases, small businesses have laid off staff to cut costs. Others closed shops as prices of diesel proved too prohibitive.
For a country that has barely recovered from the pains the coronavirus pandemic inflicted on its economy, the Russia-Ukraine war, though far away, has hit too close to home.
Nigeria’s dependence on imported wheat is turning on the screw for many bakers, with wheat being the third most consumed grain in Nigeria behind rice and maize, according to the Central Bank of Nigeria.
“I had to stop baking for some time,” said Deji, a baker and father of four. “The cost of buying diesel for a single production cycle wipes off my profits.” With mouths to feed and schools to be paid, he had to cut his losses until things picked up.
In July, The Association of Master Bakers of Nigeria, which has about 450,000 members, downed tools to force the government to remove the 15 percent tax on wheat as the prices of the commodity rose sharply.
“Over 90 percent of them have lost working capital, all the bakers, those who are still in the business are now massively indebted,” said the national secretary of the association Jude Okafor in July. “The master bakers are suffering from several factors.”
The situation has hardly improved.
Elsewhere, inflation is wielding the same wrecking balls. Ogbu, for one, has bigger plans for her business. A bigger outlet and, perhaps, another shop somewhere in the neighbourhood would be enough. But the profit margins from her current business are getting thinner.
“I want to expand it, but there’s no money now because things are very hard, very costly,” she said.
As prices of food items become too expensive for many families across the country, having decent meals becomes a mirage for thousands. Despite devising means to keep body and soul together, malnutrition is setting in. UNICEF said Nigeria ranks first in Africa and second in the world for child malnutrition. The country’s northeast region, which is battling a decade-long insurgency, is the worst hit.
“A hungry man does not have dreams,” said Tope Ogunleye (not real name), a public relations executive.
This includes the dreams of young Nigerians who try to migrate to another country in search of greener pastures. “Inflation has made any dream of japa completely unaffordable when persistent currency depreciation and a general increase in the cost of food items has made sustainability quite difficult in Nigeria,” says Margaret Chikwendu, a PR consultant.
The same goes for others who just want to travel across the world to experience other diverse cultures. Cynthia Ndeche, says “I wanted to travel as a nomad, but have you seen the cost of flights today? Nawa. Anyway, there’s Italy on the TV, so that will have to do for now.”
Dreams on hold
With prices soaring as quantities and quality of goods dwindle, many citizens are forced to prioritise immediate survival over long-term goals.
Chuma Odili (not real name), a young father of one and copywriter in a well-known advertising agency in Lagos, stresses the prohibitive cost of raising a child in today’s economy. “My take-home pay is a little less than a million a month. This would have been important some years ago, but I barely make it through the month without running out of cash.”
“I’ve always wanted to launch a string of businesses and build my own home, but right now I’m barely able to save after paying my bills every month,” says Odili.
“The prices of things have tripled in the last few months. So, I spend more money on the same things or even less without getting actual value for them. My toddler’s cereal used to cost ₦2,500 for the large tin; now it is ₦5,000. The same goes for diapers, electricity, fuel, foodstuff, and other essentials needed to survive.”
As the country contends with its worst food inflation in almost two decades, luxury is sacrificed for survival. And the pressure to struggle to maintain a balance between eating decent meals and satisfying wants sometimes exerts mental pressure.
The uncertainty about the prices of food items unnerves Nimi Selekere, a 26-year-old social media executive at an insurance firm in Lagos. “I can’t say what the prices of things will be when I go grocery shopping for the month.” Now, she is on the verge of giving up on her dream of buying a car or moving into her apartment. “A 2006 Toyota Rav4 is going for ₦5 million. How much do I even make in a year?”
While Ifeyinwa is understandably miffed for having to delay the opening of her bakery, she is more concerned about her inability to spread good cheer to the kids around with her cake.
“I no longer bake cakes to give to children anymore. Baking materials are now expensive,” she said.
Addressing the inflation crisis
Prices will continue to surge in Nigeria at alarming rates until something is done to address the crisis. More than just an expensive trip to the market, inflation continues to shatter the dreams of the average Nigerian.
Inflation in Africa’s largest economy is largely expanded by a cocktail of causative factors, including foreign exchange volatility, dislocation associated with forex instability, the soaring prices of diesel and aviation fuel, debt servicing, and exogenous influences like the war in Ukraine.
Adetona Ibadin (not real name), a tech entrepreneur who is married with children, says, “I think one thing that caused this was we were unable to protect our food.” He believes that once insecurity is fixed, all other issues will follow.
The Nigerian government needs to introduce creative ways of addressing and curbing the inflation crisis. Some of these ways include implementing a progressive forex management policy, reducing insecurity to increase food production, reducing the impact of Nigeria’s external debt, and finding measures to better manage the fuel price escalation.
For Ajani, “The easiest way to fix this is to work on the currency value of Nigeria because, since many things are imported into the country, any reduction in the currency value trickles down.”