Economic situation worsens as Nigerians cut household spending by trillions amid soaring inflation

Recent data from the National Bureau of Statistics (NBS) unveils a staggering decline in household spending by Nigerians, reflecting dire economic strains.

In the first half of 2023, households slashed expenditures on food and essential items by a whopping N3.05 trillion, signalling a 17.32% plunge when adjusted for inflation.

Household consumption dropped significantly amid a landscape of economic challenges, including cash shortages and skyrocketing prices.

Rising inflation, hitting 27.33% as of October, led to an escalated cost of living, particularly impacting food prices, which surged by over 31.52%.

Tracknews Media reports that the economic turmoil has directly impacted the average Nigerian’s purchasing power.

Reports reveal households spending approximately 59% of their income on food, the highest globally, with staples like rice escalating by over 37%.

An educator, Mrs Grace Onofomi, said, “The prices of things have shot up really. I bought Dano full milk at N4,800 recently. As of yesterday, it was N5,300.

“Everything in the market has gone up drastically. Spaghetti used to be N550, now it is N650/N700. Prices of sugar have also gone up. Household items, the price of tomatoes, rice, staples, and more are higher now.”

The fallout isn’t limited to households; manufacturers also face hurdles, with unsold inventory skyrocketing by 45.4%. The Manufacturers Association of Nigeria (MAN) attributes this surge to diminished consumer purchasing power amidst inflationary pressures.

Economists express grave concerns over the situation. They cite reduced consumer spending amidst soaring inflation as a concerning indication of deepening poverty.

The World Bank projects an increase in Nigerians living below the international poverty line, expecting the figure to reach 38.8% in 2024, signalling a deteriorating economic landscape.

Experts emphasise the need for urgent intervention, advocating for increased agricultural production, improved security for farmers, and essential government support to combat food insecurity and bolster the economy.

The Chairman, Agric. Development Farmers Association of Oyo State, Salihu Imam, lamented that the country is not producing enough to feed its teeming population.

He said, “We are not producing in sufficient capacity to even feed Nigerians. The cost of production has gone up, and people are experiencing hunger. Currently, only starchy foods are a bit affordable for Nigerians.

“Many people are resorting to eating garri because that’s what they can afford. As I speak with you now, I am in a market in Ibadan, and food items are very expensive. We just bought a bag of rice for N40,000, and it’s challenging to obtain.”

“We need to transition from small-scale farming to mechanised farming. The government must address issues of insecurity and offer essential support to farmers. Are our farmers currently able to work on their farms without fear? To boost the economy, we must ensure that people can engage in farming activities by providing adequate security,” former Zenith Bank Chief Economist, Marcel Okeke, added.