Unlike some societies where prices stablise after increment, the reverse is the case in the Nigeria, as prices of goods and services keep growing astronomically since the January 1, 2012 removal of subsidies on petroleum products. The extent of the price hike varies from product to product and even state to state.
But the painful truth is that people buy food items and pick most of their bills with pains. Though the country’s populace are used to crumbled economy from ages, low income earners, have been at the receiving end of the rising prices. CHARLES KUMOLU & ONUZURE DANIA report.
THOUGH the Federal Government had in 2012, dismissed fears about possible rise in the prices of goods and services during the fuel subsidy crisis, six months down the road, the prices of items have remained on the upward increase. There is hardly any aspect of the daily lives of Nigerians that has not witnessed a steady increase, thereby leading to high cost of living.
A market survey conducted by VanguardFeatures, VF, around major markets in Lagos also confirmed this. Supporting this finding was the recent report by the National Bureau of Statistics, NBS, which regretted that food prices pushed inflation to 12.1 percent in March.
It stated that the inflation figure was an increase of 0.2 percentage points over the 11.9 percent recorded in the early period of the year.
Disclosing how NBS arrived at the matter, Statistician-General of the Federation and Chief Executive Officer, NBS, Dr. Yemi Kale said, that about 10,534 informants across the federation provided data for the computation , noting that the items currently comprised 740 goods and services regularly priced
It said: “The Composite Consumer Price Index, which measures inflation, rose to 12.1 per cent year-on-year in March 2012. This figure is 0.2 percentage points lower than 11.9 per cent recorded in the previous month.
“The monthly composite CPI was higher by 1.6 percent when compared with February 2012. The increase in the headline index, composed of the core and food indices, partially was due to the planting season, which increased the price of food products in the market, and an increase in prices in the economy.
However, this was moderated by lack of liquidity in the economy due to the delay in the monthly sharing of revenue by the Federation Accounts Allocation Committee.” The report also put the percentage change in the average composite CPI for the 12-month period ending, March 2012, over the average of the CPI for the previous period at 10.9 per cent.
This, it said, was slightly down from the 11.0 percent recorded in the preceding month. On food inflation, the report said the food consumer index experienced an increase of 2.3 percent from 9.7 percent to 11.8 per cent. “The rise in the food inflation was mainly due to the increasing cost of food products, especially yams and other tubers, as food products have become relatively scarce due to the drawdown from the end of year harvest,” it added.
Lagos market survey: Indeed a VF visit to Agboju Market in Lagos revealed that a bag of gold cap rice now sells for N10, 200 as against N7, 900, for which it was sold for in January 1, 2012, while a bag of white cap sells for N5, 900 as against N5, 000.
Another product that has suffered the same fate is Bread: a loaf which was formerly sold for N150 is now between N200 and N250. A bag of pure water now sells for between N130 and N150 against its former price of N80. This development seems to have left a lot of people with low propensity to spend, while sellers continued to count their loss.
Further inquiries on the prices of perishable goods at the poplar Mile 12 market, also showed that such items appear to be the worst hit, as they are unusually scarce and expensive. Accordingly, against its previous price, a basket of tomatoes and pepper now sells for N15,000, while a bag of beans now goes for N27,000.
The case of tomatoes, appears so severe, given that four balls are now sold for N200 in the retail market, just as pumpkin leaves, which used to sell for N50 per bunch, is now sold at N100.
In addition, from Hausa hawkers of dried fish, which is usually transported from Niger State and Yauri in Kebbi State, came the revelation that over eight pieces of the fish that sold for less than N1000, now goes for N1,500. Same could also be said of yam which is mainly planted in the northern States of Niger, Benue, Kebbi among others.
Before January this year, a big tumber of yam sold for N300 and N350, but now goes for N400. Also, cooking gas which is the preference of low income earners, has been on the high side, as it is now sold at N3, 400 instead of N3000. Same goes for the cost of kerosene which has moved from N150 last year but now sells for N200 to N250 per litre on the street.
Fluctuating prices of petroleum products: A dealer on the product, Mr. Chizoba Nwalibe, who spoke to VF at Vine Gas in Festac Town, attributed the development to the fluctuating prices of petroleum products in the international market.
He said: “You know we are in the subsidy era, since that move was made by the Federal Government, price of Liquefied Natural Gas, LNG, has gone up. People have been complaining but we don’t have an option because we don’t have the power to crash the prices, let’s just hope for price stability in the international market.”
Also speaking on the marginal increase on food items, a trade in Boundary Market, Ajegunle, Mrs. Yetunde Adewunmi, traced the history of the present price hike to the fuel subsidy removal. She said: “You know when the government wanted to remove subsidy, people feared it would affect prices of goods.
That is what is happening today. Everything went up since that January and they have barely come down since then. Even the ones that came down, only reduced marginally. You can see that I deal on food items and most of them are from the North.
“Since that flooding that happened in the North in 2010, we have never had it easy in terms of getting the products and even buying them because when they come, they come in small quantities at higher prices. Do you know that tomatoes is the most expensive thing now?”
Her position was corroborated by a Hausa trader, Umaru Danhaske, who fingered the growing insecurity in the north as a major reason behind the scarcity of products from the northern region. Umaru said: “There is no peace in the North, so farmers are afraid.
You know that our perople are mainly farmers. Apart from few states, there is no where that is spared of crisis in the North, so how can farmers farm and have the security of transporting their farm produce to the markets.”
Citing an example with the recent killing of traders in Maiduguri Market by gunmen, he said: “Last two months, some cattle rearers were killed at the cattle market in Maiduguri. How can other cattle dealers be encouraged to come out with their cattle.”
Skyrocketing house rent: Besides food items, the prices of house rent, have also been on the rise, though it had been on the high side before the latest rate of inflation. Our investigations indicate that prices for a room apartment and three bedroom flat have remained high in the cities.
It was even gathered that the rural areas are not spared, as rents have also gone high. While, some people have cited the fuel price increment as the major reason behind the issue, others have argued to the contrary.
Speaking on the matter, a former President of institute of Chartered Accountants(ICAN) Mr. Emmanuel Ijewere said: ‘’It has to do with simple economics. Inflation is a natural phenomenon. There will always be inflation in an economy.
The question is that government does not stop inflation, but they reduce it to an acceptable level. Even in the best of economies in the world there would be inflation, just that they keep it at a minimal level. Without inflation, economics will not be as efficient as it is, therefore there is bound to be increases.
It is not akin to Nigeria, it is all over the world. Ours is because of the various problems we have in this country. We have a situation where infrastructure and the cost of production is abnormal. Virtually every manufacturing company in Nigeria needs generator.
And that is no obtainable in some countries. If the exchange rate goes up, the price of generator goes up, the price of generator parts also goes up. If the price of diesel goes up in the world market, you pay higher because diesel is not under control. All these become part of the cost of production.”
Government does not stop inflation
In addition, he said: “The roads are not really good. Vehicles get damaged because of bad roads. Therefore, the cost of transportation has to go up because the owner of the vehicle has to charge for the extra cost he incurres in fixing his car.“Wetin you carry” is also a well known phenomenon.
These are cost to the country because it is the money that illegally go into the pockets of some people. That in itself adds to the price. So, looking at the anatomy of the Nigerian pricing system, you will discover that there are people who take advantage of it. People who think that fuel price is the only reason for the rise in prices of goods, are deceiving themselves because the price has always been up.
“All the things happening are inflation and cost of production based. For instance, where oranges are sold, you will discover that over 25 percent of them go bad before they get to the consumer. Even the way they are transported does not help issues, because they are usually piled together.
The owner will have to add the cost to his pricing system. So, these are the reasons why the prices of food keep going up. And the poor farmer has remained poor because he does not get anything. He does not even understand what inflation means.”