Some days back, the National Bureau of Statistics (NBS) disclosed that Nigeria’s headline inflation jumped from 22.79 per cent to 24.08 per cent in July 2023.
The report led to an array of feelings comprising of worry, frustration and even disbelief.
The disbelief was far from whether the over 100 basis point rise was real. Instead, the citizenry complained that the report did not reflect the market reality.
The report read, “In July 2023, the headline inflation rate rose to 24.08 per cent relative to June 2023 headline inflation rate, which was 22.79 per cent.
“Looking at the movement, the July 2023 headline inflation rate showed an increase of 1.29 per cent points when compared to June 2023 headline inflation rate.
“On a year-on-year basis, the headline inflation rate was 4.44 per cent points higher compared to the rate recorded in July 2022, which was 19.64 per cent. This shows that the headline inflation rate (year-on-year basis) increased in July 2023 when compared to the same month in the preceding year (i.e., July 2022).”
The last time Nigeria’s inflation reached the 24 per cent level was in September 2005, when the rate was 24.3 per cent.
This is the seventh time there has been a rise in the country’s inflation this year.
The consumer price index (CPI), which measures the rate of change in prices of goods and services, rose to 24.08 per cent in July 2023, up from 22.79 per cent in the previous month.
On a month-on-month basis, NBS said the headline inflation rate in July 2023 was 2.89 per cent, 0.76 per cent higher than the rate recorded in June (2.13 per cent).
This translates to the fact that in July 2023, on average, the general price level was 0.76 per cent higher relative to June 2023.
It is no secret that inflation is the resultant effect of the removal of the fuel subsidy by President Bola Tinubu.
From May 29, when the subsidy was removed, the cost of transportation rose to over 200 per cent in some states.
According to a report by The Guardian, staple food items have increased sharply in the past three months.
For instance, rice has increased by approximately 27 per cent compared to the pre-subsidy removal era.
Bread, another staple food, has also seen an increase of over 20 per cent, while beans, tomatoes and other items have varied degrees of upward price shift.
The Federal Government, on its part, while trying to cushion the effect of the subsidy removal on food prices, released some palliative measures, including a directive that fertilizers should be made available to farmers and grains should be released from the strategic grains reserve to reduce the prices of the grains in the market.
However, the impacts of the policy statements have not been reflected as food prices remain at an all-time high.
The CBN, on its part, also raised the Monetary Policy Rate from 18.5 per cent to 18.75 per cent to control inflation. But with low financial inclusion and formal credit penetration, the restrictive monetary policy option has also not moved a needle.
How Nigerian Households Are Responding To The Inflation In Prices
In a bid to know how Nigerians are handling the inflation situation, a visit was made to the market in Iju Ishaga to speak with some people.
A woman, identified as Mrs Adeyemi, who came to the market to purchase some foodstuffs, said her family has currently cut down on the amount of animal-based protein they eat weekly and settled for plant-based protein such as beans.
Speaking in Yoruba, she said, “I have five children, my last born is three years old. Things are really difficult compared to before. We used to cook soup twice a week in my house but now it is just once. When we cook soup before we use meat and fish. But now is either fish or meat. We don’t eat meat and fish like before. I now introduce lot of vegetables and beans to my children so they can remain healthy. Even the amount of food we cook have reduced”
Another lady named Mama Emma, selling groundnut and palm oil in the market, said things have drastically changed.
She said, “My sister things have really changed. This Tinubu government dey show us pepper. In my church every Sunday at the end of service different people will come to me and my husband asking us to borrow them money. They think we have money. But we are all suffering. House rent, school fees, food, transportation, everything has increased. I am tired”
David Alabi, who had also visited the market to purchase foodstuffs, said he might move his family to the village because of the exorbitant expenses.
He said, “Aunty, please, you people that are writing news should help us to tell Tinubu that we are suffering. I am the head of the home. My wife is not working, she is a graduate but has no job. I work with an insurance company, my salary is not much. There are times when I trek to work. We have three children. They will eat, go to school, and there is also house rent. I am even thinking maybe they should move to the village while I stay in Lagos and work. But my brother in the village says things are also expensive there. The whole nation is crying. Everywhere is hard.”
Another man, identified as Maxwell, said he has no interest in what is happening in the country and plans on relocating soon.
He said, “Once everything works out, I am leaving this country. See, I can’t begin to explain to you how me and my family are managing because I am even ashamed to say some things. I have lost hope in this country. I just want to leave because presently I am living like an animal.”
What Are Experts Saying?
The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) recently advised the Federal Government and the CBN to find other means to rein in inflation beyond raising the MPR.
Speaking at a media interactive session, the President/Chairman of Council, ICSAN, Funmi Ekundayo, noted that CBN had increased MPR four times by about 225 basis points this year with little or no impact on inflation.
She said: “This year alone CBN has increased MPR about four times by a total of about 225 basis points. That is huge. But what do we see? Has it had any impact on inflation? I will say no
“So, I think it is important the CBN looks beyond the orthodox method because it does not look like it is working for us. I believe that the government should look beyond the management of interest rates to curb inflation.
“There are so many areas the government can look into to make the economy more efficient.
“There is a need to increase real investment in infrastructure, for instance. I think for CBN as well, economic policies should be made, taking cognizance of our peculiarities and what would work for us.”
Also, the CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the NBS has its methodology, still most times, its method needs to reflect the experience of ordinary people.
He added that inflation will continue to go up unless the government responds in the right way.
He said: “The ordinary people will be looking at the things that they buy daily, they look at food, they look at transportation, they look at energy and pharmaceuticals and if you look at the way the prices of these things have jumped, it is much more than what NBS is reporting.”