Nigerians Brace for Challenging Yuletide Amidst Soaring Inflation, Naira Scarcity

As the festive season unfolds, Nigerians are confronted with the grim reality of a challenging yuletide, marked by a staggering inflation rate of 28.20% in November – the highest since August 2005, according to the National Bureau of Statistics. This represents the eleventh consecutive increase in 2023, with a year-to-date inflation surge of 6.68%, the fastest since the 2016 recession.

Essential commodities such as food, accommodation, clothing, electricity, and education fees have witnessed unprecedented price hikes, casting a shadow over holiday celebrations. Food inflation, standing at 32.84% in October, emerges as the primary driver behind the escalating headline inflation.

A closer look at the market reveals alarming price spikes: a 50kg bag of rice has surged from N38,000 to N55,000 in just one year, 25 liters of vegetable oil now cost N42,000, up from N32,000, and the price of a chicken (layer) has doubled to N6,000 from N3,000 the previous year.

The surge in transportation and service costs nationwide can be attributed to the removal of fuel subsidies and foreign exchange fluctuations, stemming from President Bola Ahmed Tinubu’s policies introduced in June. While these policies aimed at long-term gains, the immediate impact has left many Nigerians grappling with soaring fuel prices exceeding N617 per litre and a forex rate surpassing N800/$1.

Despite the government’s efforts, only 1.5 million out of 15 million households targeted for the N25,000 cash transfer from the $400 million World Bank loan have received the fuel subsidy palliative, exacerbating the economic challenges faced by many.

The scarcity of the Naira persists, amplifying the struggles induced by rising inflation. Despite assurances from the Central Bank of Nigeria (CBN) regarding cash sufficiency, both citizens and point-of-sale operators continue to bemoan the scarcity of banknotes.

Experts weigh in on the potential repercussions of the soaring inflation. Professor Godwin Oyedokun of Lead City University warns that the higher cost of living may limit Nigerians’ ability to fully participate in festivities, affecting their purchasing power for essentials and enjoyment during the yuletide.

Economic analysts, including Mr. Idakolo Gbolade of SD & D Capital Management and Mazi Okechukwu Unegbu, former president of the Chartered Institute of Bankers of Nigeria, express concerns about the impact on Nigerians’ financial well-being. They cite the challenges posed by the weakening Naira against the US Dollar and emphasize the need for swift policy adjustments.

As the nation grapples with these economic challenges, Dr. Uju Ogunbunka, President of the Bank Customers’ Association of Nigeria, underscores the dependency on imported goods as a key driver of inflation. He emphasizes the critical need for cash availability to mitigate the impact on citizens.

In a pessimistic outlook, Prof Segun Ajibola, former President and Chairman of the Council of Chartered Institute of Bankers, questions the effectiveness of monetary measures in curbing inflation, highlighting that the current inflationary pressures are predominantly cost-induced rather than demand-driven.

As Nigerians navigate through these economic uncertainties, the question remains: How will the nation weather this challenging yuletide amidst economic headwinds and a surge in living costs?