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An air of melancholy surrounded Robert Udo, a junior medical officer at the Lagos State University Teaching Hospital (LUTH), because he may have a very low-key Christmas celebration.
Udo, who has four children, has not been paid November salary, and December pay could be delayed till January or February, further exacerbating his already aminic position.
“I am confused. And thought of the Xmas sends fear through my spine. My wife complains that the price of food has skyrocketed. A speedy implementation of the new minimum wage would have assuaged my pains,” said Udo.
Udo isn’t alone in this Plight, as tough and unpredictable environment has damp consumer spending in Africa’s largest economy.
The partial closure of the borders by the Federal Government has impacted negatively on the price of food as inflation continues to spike, a double whammy for country where over 50 percent of a population of 200 million live on less than $1.98 a day.
Inflation for the month of November accelerated to 11.85 percent, the highest in 19 months, according to the National Bureau of Statistics (NBS).
Food Inflation rose for the third month to 14.48 percent year on year, up by 39bps compared to 14.09 percent year on year in October, the statistics body added.
The negative impact of border closure trickled down to brick and mortar shops across the country.
Read also: Festive season: FoodCo creates consumer traction with Christmas sales promo
Food items, such as frozen foods, were reported to have gone up by 65 per cent. The price of foreign parboiled rice also went up by 29.4 per cent from N17, 000 to N22, 000.The demand for local rice in the absence of foreign rice drove the price of local rice up from N15, 000 to N17, 000.
Transport fares have more than doubled, thanks to bad roads as many Nigerians are on the same salary scale.
Rufus Ajeigbe, an accountant in a software firm said the purchasing power of consumers is deteriorating and his salary has not been increased in the past five years.
The future is bleak as the hike in Value added Tax to 7.50 percent from 5 percent and an increase in electricity tariff are expected to further undermine consumer spending, but there will be an improvement in government revenue.
Nigeria’s income per capita has been dwindling since 2014 when it stood at -$3,222, a period that coincided with pre-crude oil crash that paralyzed activities and tipped the county in its recession in 25 years.
Income per capita is currently at $2,336 as at 2019, but it is expected to move up to $2,451 in 2020, according to a report by EIU.
The economic metrics can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population. A deteriorating figure means the living standard of people is falling.
Unemployment rate stood at 23 percent as at the third quarter of 2018, one of the highest in the world.
The country’s aggregate consumption is $386 million, which is 85 percent of GDP, but it is expected to increase by 12.76 percent in 2020, according a poll of economist.
“We retain our view for an expanse in the pace of consumer spending owing to a confluence of factors. Firstly, although we expect a buoyant harvest this season, the adverse effect of border closure on headline inflation still stands. In addition, we expect consumer spending to be elevated in December as festivities begin,” said analysts at ARM research Limited.
