By: Ojugbeli Adaeze Victory
Nigeria has experienced a significant increase in the cost of living over the past years, after millions of its citizens. The escalating prices of essential goods and services have put immense pressures on households, leading to various economic and social consequences.
In recent months, the cost of living in Nigeria has been on the rise, causing hardship for many people. The prices of basic goods and services have increased rapidly, making it difficult for many to afford their basic needs.
The average Nigerian is finding it hard to make ends meet, with many having to cut back on their spending and even go without some necessities.
One of the primary factors contributing to the soaring cost of living in Nigeria is inflation.inflation rate have surged, eroding the purchasing power of the local currency. The country’s inflation rate has reached an all-time high, and the value of the Naira has plummeted against the US dollar.
This has had a devastating effect on the lives of ordinary Nigerians, with many struggling to afford basic necessities like food and fuel.
According to recent data released by the National Bureau of Statistics (NBS), although the Nigerian headline inflation rate reduced a little to 21.34% in December 2022, compared to the November 2022 headline inflation rate of 21.47%, on a year-on-year basis, the headline inflation rate was 5.72% points higher compared to the rate recorded in December 2021, which was 15.63%. This shows that the headline inflation rate increased in the month of December 2022 when compared to the same month in the preceding year (i.e. December 2021).
On food inflation, NBS said:
“The food inflation rate in December 2022 was 23.75 percent on a YoY basis; which was 6.38 percent higher compared to the rate recorded in December 2021 (17.37 percent).” This rise in the food inflation was caused by increases in prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, food products, etc.
The statistical data above simply reveals that the cost of living is rising relentlessly. For many, bread and milk have become a luxury, and three meals a day a rarity. Rice is now usually eaten only on festive occasions because of its high cost. Those who suffer most are the unskilled laborers and poorer people, who are in no position to demand the higher and higher incomes needed to keep up with rising prices. For these people especially, inflation is a thief, a thief that robs the most needy!
There are several causes of inflation in Nigeria;
The first major cause of inflation in Nigeria is the decline in oil prices. Oil is a major source of revenue for the Nigerian government, and a drop in oil prices has a direct impact on the economy.
The fall in oil prices has led to a reduction in government revenues, which has in turn led to a weakening of the Naira, making imports more expensive and putting pressure on the prices of goods and services.
Another major factor contributing to inflation in Nigeria is the COVID-19 pandemic. The pandemic led to disruptions in supply chains, causing shortages of basic goods and services.
Another major factor driving inflation in Nigeria is the depreciation of the Naira.
The Naira has been losing value against major currencies, making imports more expensive and putting further pressure on prices. The depreciation of the Naira is partly due to the decline in oil prices, but it is also a result of the country’s high inflation rate and weak economic growth.
There are also other factors that contribute to the high cost of living in the country. One of these is the high level of unemployment, which makes it difficult for people to afford basic necessities. Another factor is the high level of corruption, which leads to inefficient use of resources and further drives up prices.
Despite the soaring expenses, wage growth have not kept pace with inflation rates. Many workers struggle to make ends meet, leading to increased financial stress and reduced consumer spending.
Some people try to alleviate the problem by working longer hours, but others find work difficult or even impossible to obtain because of the high rate of unemployment in the country. They are forced to devote each day to the unending and often fruitless task of searching for food. For them, it is not merely a question of coping with the cost of living, but, rather, a matter of struggling to meet the cost of survival. Particularly hard hit are those on fixed incomes such as the pensioners or the unemployed.
In view of all these problems bedeviling our economy, the concerned authorities should endeavour to properly manage the situation before it spreads out of control. When the price of food items and other goods and services increases over a period of time, it affects the entire economy. It impacts the cost of living, the cost of doing business, and every other facet of the economy.
Inflation is like a balloon. A balloon can be filled with air up to a point, depending on its size and strength. But when too much air is pumped into it, the balloon will always ‘burst.’ That is also true of constant economic inflation; it eventually leads to an economic ‘bust.’
From the economic viewpoint alone, authorities agree that throughout history every case of rampant inflation has ended in the destruction of that nation’s money. Time and again this has happened, without exception.
