Cash strapped Nigerians are in for tougher times ahead on the back of rising food cost and other essential items further aggravated by the EndSARS protest, which took an unexpected turn and gave room for hoodlums to loot stores and malls thereby wreaking havoc on many businesses.
The effect being, further erosion in the purchasing power of households.
The Consumer Price Index (CPI) report for September, released by the National Bureau of Statistics (NBS) in October, revealed that the country’s inflation rate rose to 13.71 percent. However, on the back of a three-week old protest, analysts fear that Nigeria may experience a faster increase in inflation numbers month-on-month.
“Momentum of inflationary pressures may become faster than initially expected in October, when you consider the impact of the civil unrest on the movement of goods from the Northern part of the country to the Southern region. Major foods items will likely record faster increase in prices of food items,” Gbolahan Ologunro, senior research analyst at Cordros Capital, told BusinessDay.
Prior to the protest, the economy was already suffering from insufficient supply of food items locally as the border closure exercise was still ongoing, the outbreak of the coronavirus pandemic that saw the Federal Government impose lockdown measures across several states further aggravated the availability of food items with a consequential effect of higher prices of food items.
Now, the looting and destruction of malls, banks and shops, especially in Lagos, the commercial hub of Nigeria, and other states will mean shortage in supplies of goods, increased cost of getting back in business. All of these passed down to customers in form of higher prices.
“The recent destruction of malls, markets will further affect prices as operators of shopping malls, markets might be scared of reopening their outlets and the few available outlets are likely to see increased demand as people begin to scramble for other stores where these products are available, and that might put upward pressure on prices,” Ologunro said.
This is coming at a time when Nigeria is yet to reverse its decision to close its land borders. The resultant effect of the unfortunate turn of events in the ongoing protests against SARS and bad governance, couple with the continued border closure exercise will play a significant role in rising prices of goods.
Meanwhile, in view of the upcoming yuletide season, prices of food items may more than double and may also become scarce due to a number of reasons including a failed planting/harvest season, restricted movement of food items due to reoccurring lockdowns and many other reasons.
“We should be anticipating inflation rate above 14 percent by December 2020. Yuletide seasons see increase in prices reflecting the surge in demand during the season,” Omobola Adu, research analyst at GDL Nigeria.
Over the weekend, prices of food items and other essential commodities increased significantly with a kilo of chicken increasing to almost N2500 from N1600, similarly tomato paste sachets which used to cost N80 now goes for N200.