Despite Naira’s recovery, hardship in Nigeria continues

…High inflation dampens hopes for a drop in food prices

Nigerians have continued to gnash their teeth in great agony over the rising cost of food items. In recent weeks, optimism has been high that there would be some appreciation in Naira

lead to a significant decline in goods and services in the country, but that has not happened despite a noticeable improvement in the exchange rate of the naira against the US dollar.

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The measures taken by the Central Bank of Nigeria (CBN) have led to the appreciation of the Naira against the US dollar in both the official and parallel markets.

However, this has not reflected positively in the lives of Nigerians as evidenced by the latest Consumer Price Index (CPI) report by the National Bureau of Statistics (NBS).

Food inflation, which accounts for more than 50 percent of overall inflation, continued to rise for the fifteenth time in a row, reaching 40.01 percent in March, up from 37.92 percent in February.

The CPI, which measures changes in the price of goods and services, also revealed that food inflation in March was 15.56 percentage points higher than in March last year, when it stood at 24.45 percent.

In addition to food inflation, headline inflation accelerated to 33.20 percent in March from 31.70 percent in February.

The Nigerian currency depreciated to a low of N1,825/$ in mid-February, leading to a rise in the prices of food and other commodities.

However, several measures taken by the CBN under the leadership of Olayemi Cardoso led to the sudden appreciation of the naira.

Measures such as clearing forex backlogs, steady supply of dollars, selling dollars to Bureau De Change operators (BDCs) and increasing the monetary policy rate (MPR) from 18.75 percent to 22.75 percent.

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On Thursday, April 18, Naira stood at N1,154/$ in the official market. While the Nigerian currency trades between N1,100 and N1,000 on the parallel market.

Prices remain adamant for the recovery of the naira

The appreciation of naira has not affected the quality of life of the masses. The appreciation was only reflected in the prices of some raw materials, while many of them stagnate or continue to rise.

For example, there has been a decline in the prices of foreign rice and noodles. A 50kg foreign rice that sold between ₦75,000 and ₦80,000 in March now costs ₦60,000.

Moreover, a pack of noodles, especially Indomitable, which retails between ₦10,000 and ₦10,500, now costs ₦6,000.

On the other hand, prices of local basic products continue to rise. For example, garri paint, which sold between ₦2,000 and ₦2,500 in March, now costs between ₦3,000 and ₦3,500.

A tuber of average yam now costs between ₦2,500 and ₦3,000, up from ₦2,000 in March. A crate of eggs now costs ₦4,000, compared to ₦3,500 a month ago.

Apart from food, prices of other commodities such as gadgets, clothes, shoes, etc. remain on the high side.

According to the 2023 State of Food Security and Nutrition World report, the number of food insecure Nigerians has increased by 133 percent in three years. It has increased from 63.8 million people between 2014 and 2016 to 148.7 million people between 2020 and 2022.

FG is taking measures to tackle rising food prices

On Thursday, the Federal Government commenced enforcement raids on several supermarkets and markets in the Federal Capital Territory, Abuja, to monitor compliance with price and quantity regulations. This initiative aims to reduce food prices across the country.

The government plans to expand these surprise inspections to markets in Lagos, Port Harcourt, Kaduna and Ibadan to investigate and address any cases of unfair market practices such as price manipulation and cartelization.

Adamu Abdullahi, Executive Secretary of the Federal Competition and Consumer Protection Commission (FCCPC), mentioned these efforts during an enforcement operation aimed at curbing illegal price fixing activities in supermarkets.

The operation led to the closure of 4U Supermarket and the removal of 33 bags of contaminated rice from a branch at Adetokunbo Ademola Crescent 58, Wuse II.

On Wednesday, the commission had instructed its staff to increase surveillance of the markets to identify companies that are driving up prices so that they can then be enforced.

The move is in response to consumer complaints over rising commodity prices, which contradict the recent appreciation of the naira.

The Federal Competition and Consumer Protection Act (2018), section 69, specifies a penalty for violations. The fine is 50 million naira or 10% of the company’s annual turnover, whichever is higher.

Section 69 read: “A person who contravenes any of the provisions of this Part commits an offense and is liable on conviction to a fine not exceeding N50m. A legal entity that contravenes any of the provisions of this Part commits an offense and, on conviction, is liable to a fine not exceeding 10 percent of the turnover of the legal entity in the financial year preceding the date of the commission of the offence.”

Ajuri Ngelale, the Special Adviser to the President on Media and Publicity, said President Bola Tinubu has directed consumer protection agencies to bring local prices in line with the increased value of the naira.

He stressed the continued need to work towards a rapid reduction in inflation.

Ngelale stated that as the refineries become operational in early 2025, Nigeria’s financial situation should improve, leading to a stronger naira and its reflection in market prices.

The presidency expressed optimism about the future and indicated that the positive effects of the reforms would become more apparent as the government continues.

Ngelale highlighted the potential impact of combining Nigeria’s growing purchasing power with unprecedented access to consumer credit, suggesting that Nigerians would appreciate the election of a leader with a financial and business background by the end of the president’s first term .

“Once you join the rising purchasing power of Africa’s largest population, with the historic availability of trillions of naira for consumer credit that will strengthen the real sector, you will see why Nigerians will be very happy to have a financial engineer and businessman elected president. the end of his first term, even if the signs are becoming clearer today,” the presidential spokesperson said in a recent interview.