Nigerian consumers still groan under hardship, as prices of foodstuff get sticky, writes ONYEKORMAKA ASABOR
Since the Nigerian government decided to shut the country’s land borders, to curb importation of foodstuff and encourage local farmers, consumers have been groaning under the skyrocketing food prices. The Coronavirus Disease crisis and the attendant lockdown nailed the coffin. As much as 30 per cent increase witness is recorded in many parts of the country, according to National Bureau of Statistics.
Last year, stakeholders believed that the increase was mainly triggered by border closures, COVID-19 containment measures and insecurity. Other causes, as gathered by Financial Street, were flooding during the rainy season, poor storage facilities, and rising demands of select foodstuff.
The situation was so appalling that as at March 2021, not a few Nigerians literally resorted to lamentation, as rising cost of living became unbearable to them on account of the country’s inflatiion that hit intolerable levels.
Eddy Nwabueze, a civil servant and resident of Mowe, Ogun State, said, “Considering that the factors that triggered the increase in prices of foodstuff are easing off, consumers are supposed to, by now, be witnessing fall in prices of staple foods.
Analysed from Nwabueze’s perspective that the factors that triggered the price increases are gradually easing off in some parts of the country, particularly as regards the opening of some land borders and somewhat lowered COVID-19 containment measures by governments since there is no more complete lockdowns, one cannot but agree with him that there ought to have been sharp drop in prices of some foodstuff.
However, Financial Street gathered that it is not as if the prices of some food items are not going down, they are but slowly, so much that it is somewhat considered, by not a few consumers, to be inconsequential on consumer spending compared to what the prices were before the abnormal market situation set in.
Against this backdrop, it is rational to conclude that the market situation, as to foodstuff, is experiencing price lstickiness. According to economists, price stickiness, or sticky prices, is the resistance of market price(s) to change, despite shifts in the broad economic fundamentals.
Price stickiness would occur, for instance, if the price of a once-in-demand smartphone remains high at say N20,000 even when demand drops significantly. Price stickiness can also be referred to as nominal rigidity.
Based on an NBS report in May 2021, the prices of grains, like beans and garri, drove annual food inflation so much that beans recorded 58.28 per cent and 15.94 per cent in annual and monthly inflation respectively, while garri recorded 53.89 per cent and 9.25 per cent.
The report added, “Select food price watch data for May 2021 reflected that the average price of one dozen of agric eggs increased year-on-year by 17.10 per cent and month-on month by 2.10 per cent to N541.53 from N530.40 in the previous month; while the average price of agric eggs increased year-on-year by 22.41 per cent and month-on-month by 1.72 per cent to N49.99 (each) from N49.14. The average price of 1kg of tomato increased YoY by 9.09 per cent and MoM by 9.47 per cent to N303.51 in May 2021 from N277.26 in April 20.”
The average price of 1kg of rice (imported high quality sold loose) increased YoY by 17.46 per cent and MoM by 0.65 per cent to N544.09 in May and N540.58 in April.
Garri in Nigeria today sells 25kg for N11,000, 50kg for N22,000 and 100kg for N44,000. The white variant sells at N340.
For a gallon (paint) measure, dealers at Ikotun-Egbe in Lagos sell for N1,000 down from the previous 1,200.
On why prices of foodstuff decreased in the area, Amos Igudia disagreed with the opinion that factors that triggered food prices to be high are easing off, mostly across states that are majorly agrarian.
Going with Igudia’s view, Peter Megbon said, “Given the penchant for sellers to maximise profit, it would be difficult for prices of foodstuff to generally come down.”
He added that the market situation in Nigeria today was that of different prices for one particular product.
Get real time update about this post categories directly on your device, subscribe now.