28 February 2016

Nigeria: Economy - Consumers Groan As Price of Goods Rise

Abuja, Jos, Katsina, Bauchi — Prices of commodities in various markets across the country are witnessing a sharp increase due to the recent drop in the value of the naira, a survey by Daily Trust on Sunday has revealed.

Consumers who spoke with our reporters, expressed concern over the persistent price increase of some food items, especially imported rice, vegetable oil and palm oil.

In Katsina, a state popularly known for cheap prices of imported goods, especially food items like rice, spaghetti and cooking oil, residents are now living under difficult circumstances as a result of the increase in prices of various commodities.

It was observed that a bag of imported rice is now N12,000 and above, as against N8,500. A gallon of 25 litres of vegetable oil, which was sold at N5,600, is now N8,200. A carton of noodles is now N2,400 instead of N1,900.

Some foreign brands of milk have also witnessed a slight increase. Lectal Fresh Milk, which sold at N250 per bottle, now goes for N350.

As a result of the increase in prices, there is a shift in patronage on most foreign goods from Algeria and Libya.

The story is the same in Bauchi metropolis. Checks by Daily Trust on Sunday revealed a mixture of hope and despair as many people struggle to make ends meet due prices increase.

A 50Kilogramme bag of Thailand rice, which was sold between N10,500 and N11,000 three weeks ago, is now N13,000 while the 25Kilogramme bag that was sold at N5,500 is now between N6,500 and N7,000, depending on the type.

A trader at the popular Muda Lawal market, who deals in essential commodities, said there was a general decline in patronage as most customers can no longer afford many things, including those considered essential.

In Kano, many residents are lamenting the deterioration of living standards following the sudden rise in prices of basic commodities.

In Jos, the Plateau State capital, energy drinks, candies, especially chocolate and other imported commodities, are disappearing on the shelves of various supermarkets because customers hardly afford them.

"Customers are changing their tastes, going only for the necessities of life. Chocolates are no more selling, so we have decided not to go for chocolates and energy drinks because majority of our customers are coming for just the basic necessities," said an official of Flourish Supermarket, located along Murtala Mohammed Way, who did not want his name mentioned.

At the popular Jifatu Supermarket in Bauchi, where about 70 per cent of stock is imported, the prices are not much different.

Although the naira has depreciated, a source close to the operations of the supermarket, however, disclosed that their prices are reasonable considering the situation on the ground.

"The slump in the value of the naira is certainly having an effect on importation, but we still have stock of goods that will last for a long time. You know we have other places in Kano, and they are all well stocked. We only hope that things would soon stabilise,"he said.

Furthermore, a kitchen utensils and furniture showroom, Rawayau, along Kwado ring road, is still selling old stock. Mallam Auwal, an official of the showroom said, "We are yet to open the new stock as they just arrived from Dubai. And given the exchange rate of the naira to the dollar, the goods will surely cost more."

Middlemen take advantage of the situation

The increase in the prices of some locally produced commodities, according to our findings, was necessitated by some few traders and middlemen who are taking advantage of the forex market to exploit buyers.

In most markets, products that have nothing to do with dollar value have increased. In Katsina for instance, maize sells at N7,200 as against N6,500 while sorghum is now N6,200 instead of N5,500. Local rice sells at N10,000 as against N8,000, while beans goes for N15,200 as against N12,000 few weeks ago.

Also in Kano, checks by Daily Trust on Sunday indicated that apart from imported items, prices of local products are on the increase. For instance, a bag of 50kg imported rice, which used to cost N9,800, is now being sold at N13,000 while another brand of lower quality that used to trade at N8,000 is now N12,800. A bag of local rice, which was about N6,500 is now N8,500 or N9,000.

Some residents of Bauchi who spoke to Daily Trust on Sunday, said they were drastically feeling the impact of the situation at hand.

Aliyu Sule, a father of nine, who works in a private company, said his salary could no longer meet the demands of his family as the prices of goods have gone up.

In Suleja, Niger State, Ibrahim Usman, 35, said the increase in prices was unprecedented and unjustifiable. He said it was unfortunate that the prices of commodities were on the increase while the incomes of many Nigerians had reduced as a result of job cut by some industries. He, however, blame some Nigerians who are taking advantage of the situation to increase prices unnecessarily.

But an economist and lecturer at the Ahmadu Bello University (ABU), Zaria, Muhammed Muttaka Usman, said the depreciating value of the naira is not the only reasons for the economic hardship that Nigerians are facing. According to him, other factors such as cost of transportation, agricultural inputs such as fertilizer, and the dry season, are some of the reasons for the increase in prices.

Mr. Emeka Uzo, a public affairs analyst in Abuja, said although the increase in prices of goods was not a welcome development, Nigerians must wake up to look inward in order to have a sustainable consumption pattern. According to him, the attitude of over- dependence on imported goods is behind the woes we are facing at the moment.

How the federal government is tackling the economic challenges

The federal government recently set up four special committees, with a view to addressing fiscal shocks, monetary instability and unemployment. This move is expected to address the situation at hand.

The permanent secretary, Federal Ministry of Agriculture, Dr. Shehu M. U. Ahmed, made this known in Zaria at the Sasakawa Africa Association 2016 annual review and planning workshop, which is taking place at the ABU National Agricultural Extension Research and Liaison Services (NAERLS).

Dr. Ahmed said President Muhammadu Buhari had directed the setting up of the four special committees, among which is the Revitalisation of Agricultural Extension Services in Nigeria Committee, which would ensure that the result of scientific researches that would increase agricultural productivity are brought to bear.

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