As Nigeria grapples with currency controls and rising cost of dollars, the effects are now being felt on the prices of goods and services. According to a report from SBM Intelligence, a Lagos based Research Firm price increases where recorded in nearly every segment of house hold goods and consumables between July and December 2015, indicating that the effect of a weakening naira is starting to take hold.
The report which is a second part of an earlier research conducted for the first half of 2015 shows that the economy is in a worse state in the second half of this year. The impact of the drop in the price of crude oil and the effect of Nigeria’s currency is now having a ripple effect on the larger economy.
Key highlights
- Tomatoes, one of the most common perishable commodities in Nigeria, sold in Lagos, at an average price of N679.50 for a paint container (6 litres; 2 kilograms) over the past six months compared to N540 in H1 2015 and N500 in Q4 2014 representing an average increase of 26%.
- Price hikes were also recorded in most Nigerian cities such as Wuse, Onitsha, Dugbe, Sabon Gari etc.
- The price of pepper was also said to have gone up with a paint container of pepper selling for an average price of N700 over the second half of 2015 compared to the period in our previous report where it sold for an average price of N630. This represented an increment of 11%.
- Prices of Beans and Garri (Nigeria’s most popular staple food) however remained stable during the period.
- Household consumables and personal hygiene products such as detergent, toiletries, and vanity items saw an average price increase in most cities with Lagos recording the highest of about 27%
- Liquid detergent aggregated a price increase from an average N210 in the last quarter to N250 this quarter to continue a trend which saw an increase from N180 in the Q4 2014 to N210.
- Household needs such as toilet wash, air fresheners, brooms, dustpans and mop sticks also increased by 20%, 15%, 15%, 10% and 25% respectively in the second half of 2015.
- Female use items which include beauty and personal care products, cosmetics all increased by at least 10%, and increase attributed by traders to the unstable exchange rate of the American dollar to the Naira.
According to the report, the reason for these increases point to four major factors which typically affect prices of goods and services in Nigeria. Transportation, Insurgency and Stability, Climate Change, Availability of Labour, Climate change and exchange rate fluctuations as the major reasons for the price increases recorded. The report also suggested that a further devaluation of the Naira could even make the situation worse.
This report is quite instructive considering and provides a better perspective on the effect of government policies on the ordinary Nigerian. The National Bureau of Statistics report also shows inflation rate as been rising and could hit double digits before the end of the second half of 2016 if things persists. The government budget debacle has rubbed more salt to the injury as the jolt required by an ailing economy to improve is now being further delayed for several weeks if nor months.
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