Relief appears to be on the way of Nigerians following gradual reduction in the prices of some imported goods and some food items. YEJIDE GBENGA-OGUNDARE reports that while foreign products are dropping prices as a result of the strengthening of the naira, the same cannot be said of locally manufactured products.
Over the months, prices of staple foods have been increasing significantly in Nigeria. The trend commenced with the sudden announcement of the removal of fuel subsidy by President Bola Tinubu on his inauguration day. This policy led to skyrocketing of prices of goods and services. It also adversely affected transportation. The situation was made worse by the massive insecurity in many parts of the country that stopped farmers from accessing their farms. In the face of increasing spate of attacks and kidnapping of the farmers in many parts of the country, food production fell sharply and escalated the prices of the little produced locally.
These increases in the price of virtually all commodities and services caused untold hardships for Nigerians with many unable to afford basic food items. As a result of this, in February, the Federal Government made a policy of releasing food from its reserve to address economic hardship in the country as part of measures to tackle food inflation.
The Minister of Information and National Orientation, Mohammed Idris, who made the announcement then, stated that the government was concerned about what Nigerians were going through, and was therefore taking some actions to ensure that Nigerians had some relief in the face of biting food scarcity.
And now, after months of hardship, it seems the efforts by government are paying off as there is a slight reduction in prices of some food items, especially commodities like rice, sugar, noodles and pasta among others. This is giving some kind of relief and hope to Nigerians who have faced harsh realities as a result of inflation.
Nigeria’s inflationary figures in the last few months have surged astronomically, rising to an all-time high in two decades, according to the National Bureau of Statistics (NBS). Food inflation rose to as high as 29.90% in January 2024 with a corresponding 2.64% headline increase, the NBS said. The agency added that prices of food rose higher in the following months.
Recently, the Comptroller General of Customs, Adewale Adeniyi, revealed that President Tinubu had ordered the Nigeria Customs Service to return all seized food items which were reportedly confiscated for contravening import and export rules, which were stockpiled at the various Customs warehouses in the country, to their owners.
These efforts seems to be making a difference as current market surveys have shown that there is a gradual reduction in the prices of some food items across various markets and in varying degrees, especially rice and beans as well as other processed foods like sugar, semovita, noodles, spaghetti and macaroni. For instance, a 40-pack carton of noodles has gradually been dropping in price. A brand that sold for N10,650 now sells for N8,900. A standard pack 100g, which sold for N15,000 now goes for N12,300.
Different types of foreign rice which sold for N88,000 about three weeks ago now sells generally for N65,000 while some sell at N63, 000. And for canned foods, there is an obvious fall in the prices of items even in supermarkets especially the foreign-produced foods or foods with foreign raw materials; foods such as canned beans, canned fruits and other foreign produced processed foods now have noticeable drop in prices.
A rice trader, Esther Olayemi, confirmed that there is significant reduction in price of imported rice as there is rise in the value of the local currency. She claimed that rice importers now buy rice cheaper in naira and there is high expectation of further reduction in price as the naira increases in value, especially if government fulfills its promises to work towards arresting the rising cost of food.
However, while foreign goods are experiencing price reduction, locally made goods including local rice and bread are still expensive. Indeed, rather than prices going down, they are further increasing. The prices of bread of different sizes have also increased with an average of N200 in the last month while bread sizes also changed; they is obvious reduction in sizes while prices increased.
A bowl of garri that contains 16 kongos which used to sell for N12, 000 increased to N16,000 and during the week, it increased again to N18, 000 while a kongo that was sold for N1200, now sells for N1500.
Yam is one of the commodities that are out of reach of the common man. A set of medium-sized three tubers of yam that sold between N3,000 and N3,500, is now sold for N4,500 to N5,000. For beans, depending on the type one is buying, prices have also risen with a difference of between N300 and N500.
And because inflation continues to ravage Nigerians, the poor, who constitute the majority, are settling for cheaper products and services as they try to deal with declining purchasing power. The effect of this is that rather than patronise local products, they are embracing foreign ones that are now cheaper especially now that the cost of purchasing products and services required for maintenance of the required quality of life continues to be a challenge for many families in the country.
“The reality on ground is that Nigerians now find unique ways to cope with the rising cost of goods and services that have eroded their purchasing power and people are adjusting to the situation by switching from more expensive products and services to less expensive alternatives when prices rise or income declines, this is why you will see locally manufactured products getting lower patronage, no one has money to waste again so they go for cheaper options which are foreign products,” Olu Adebayo, an entrepreneur told Saturday Tribune.
Why local products are expensive
Recently, the Director-General, Manufacturers Association of Nigeria, Segun Ajayi-Kadir, while talking about the challenges facing manufacturers, said that “the manufacturing sector is beset with a litany of challenges some of which are perennial; scarcity of forex, high exchange rate, poor allocation of forex to the economy; high cost of diesel/energy/gas; multiple taxes/charges/levies; unavailability of raw materials, delay in receiving imported raw materials, high cost of raw materials; inadequate power supply/unstable power supply/frequent power outage; high cost of credit and inadequacy of funds available for credit; adversarial regulation and high compliance cost by regulatory agencies; high cost of production, high inflation, high operating cost; low patronage or poor sales or low purchasing power; high inventory of unsold manufactured goods; high cost of transportation or high cost of logistics or increase in the cost of distribution; poor road infrastructure; scarcity of genuine machine parts or high cost of maintaining machines; insecurity; and gridlock at the ports.”
These he said increases cost of production and ultimately, the cost of goods. And he had called on the government to give priority attention to addressing the challenges.
An economist, Igbayilola Oladipo attributed the situation to whet he termed the act of dumping of products from Asian countries, especially China, into the Nigerian which he described as a menace, adding that this act is greatly undermining the competitiveness of the nation’s already distressed manufacturing sector.
According to her, “products from China like textile materials, consumables, bags, shoes, men and ladies’ clothing, all types of electronics and phones among others, are greatly subsidised for export and this makes it possible for it to be sold at cheaper rates in Nigeria than products locally manufactured in the country. And in a society like Nigeria where people are highly price-sensitive, they keep picking up the imported goods over made in Nigeria products.
She noted that the multiplier effects of dumping products on local industries ranges are many and will ultimately lead to the death of many local industries, adding that “local industries are merely struggling because the ceaseless dumping of foreign manufactured goods in Nigerian markets is a major problem facing the sector especially when you add this to other challenges like poor power supply; poor state of our roads, high cost of fuel diesel and fuel for transportation and powering generators, multiple tax issues, insecurity and difficulty in access to funds among others.”
A marketing executive, Lillian Agbese stated that cheap China products will always sell in Nigeria and people will not patronize local goods except they have competitive prices, adding that, no one considers quality again but affordability. If you put a low-quality product with a cheaper price beside an obviously standard quality product, as a Nigerian marketer, I am the one that will go quickly and it is the lower quality that is cheaper and not the more reliable and qualitative one. I think there should be a system that will allow local manufacturers to be able to compete with these foreign products in terms of prices because the fact remains that price matters.”
It was also stated that Nigerians are responsible for the dumping of goods in Nigeria as they connive with foreigners to ship in foreign products because of profit without giving consideration to the effect it has on the nation’s economy.
An agronomist, Temilolu Afe, told Saturday Tribune that the prices of locally-produced foodstuff and other commodities will continue to rise because of the increasing insecurity in the country that prevents farmers from having access to their farms as well as the high cost of transportation to convey agriculture products from farm to market, adding that there is no production without raw materials and these can only come from the farms. In a situation that farmers cannot get to their farms, the few that brave it will spend so much especially to secure themselves. All these costs will be put on the products.
“And these make food commodities expensive. Also, a manufacturer that gets raw materials that is already expensive and transports it at a high price before additional production costs cannot sell cheap goods. We also have to consider the obvious dearth of storage facilities around the country, a huge amount of food products go to waste because of the lack of storage facilities and these cause scarcity because no one will buy rotten products,” he added.
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