LAGOS – Despite efforts by the government to boost the economy by opening more avenues for the non-oil sector to thrive, it has been observed that the economy will remain in a comatose state if the purchasing power of Nigerians remains weak.
Significantly, stakeholders who spoke to Daily Independent said one of the things that have weakened the purchasing power of Nigerians is the increased tariff of power.
They argued that allowing market operators to determine the course of action simply means that Nigerians are to pay the full commercial price for power as determined by the generating and distribution companies.
Abel Godson, Executive Director, Centre for Transparency & Accountability in the energy sector, stated that “with the deteriorating nature of electricity supply in the country, coupled with a deteriorating and ageing infrastructure within the electricity network, government’s pre-occupation should be about stabilising the market, and not tariff hike.”
He also maintained that “promoting cost-reflective tariffs at a time when the country is battling one of its worst forex regimes and high inflation rates, which affect the cost of goods and services, would be counterproductive.
An economist, Joshua Billic, said the weak purchasing power that led to the lackluster celebration of Christmas and New Year festivities last year has assumed a weaker dimension in 2022.
He said, “Some years back, we saw what Nigerians spent on gift items and hampers over the years but last year was a clear departure from that. A few that are in the market and shops were too exorbitant for the average Nigerian.
“Truly, the economic realities in the country are impacting very negatively on the masses, with many finding it difficult to even feed.
“It is obvious that the successive recessions witnessed in the country in the last five years, and the impact of the pandemic-induced lockdown in 2020, have combined to make the people poorer and drain deep pockets, leaving many with little or no purchasing power.
” Significantly, the high level of inflation, which has seen the prices of goods skyrocket this year more than any year in the history of the country, has resulted in many adjusting and cutting costs.
With a bag of rice going for about N35,000 and two litres of cooking oil going for N3,500, it is obvious that Nigerians would be groaning and struggling to buy them.
In its economic note, made available to Daily Independent at the weekend, titled, Inflationary pressure, weaker purchasing power, analysts at Coronation Merchant Bank are of the opinion that the uptick recorded in Nigeria’s inflation in February and March 2022 was as a result of weaker purchasing power of Nigerians.
“Nigeria’s headline inflation has been at double-digit since February ‘16. In Q1 ’22, there were upticks recorded in the headline inflation in February (10bps) and March (22bps).
“The average headline inflation rate in Q1 is 15.74 percent; 7 basis points higher than the average 15.67 percent recorded in the previous quarter, Q4 ’21.
“Food inflation remains the major driver behind the steady acceleration.