The Rise in Prices of Product in Nigeria

It is not a recent issue in Nigeria today that prices of product are on the rise each day.

Almost all the prices of product have been inflated.In this article, we will take you through the Rise in prices of different products In Nigeria.

You won’t want to miss it.

Stay glued!!!

The Rise in Food Prices and other Commodities in Nigeria

On an annual basis, the urban inflation rate in October 2022 was 21.63 percent, which was 5.11 percent more than the 16.52 percent reported in October 2021.

Major Factors Contributing to Rise in Food Price

#1. Scarcity of fuel

Nigeria has been dealing with significant fuel scarcity in the majority of its states since February 2022.

The government’s plans to eliminate fuel subsidies caused fear in the fuel purchasing market last year, but it worsened when the federal government claimed that its agents had imported inferior fuel.

The result was a rapid increase in food costs across the nation, as drivers were obliged to charge more for the transportation of products and services.

#2. Insecurity

Apart from the more than ten-year-old Boko Haram insurgency crisis that has devastated Nigeria’s North-East, ethnic conflicts and banditry in the country’s North-central states have also had a negative impact on the region over the past five years, killing thousands of people and displacing millions of people, most of whom are farmers.

The production of food in these areas has been hampered by this.

Due to the obvious food insecurity challenges in the nation, food production has decreased significantly , which has resulted in a sharp increase in food costs.

Since July 2020, the cost of staple foods such as rice, beans, yams, vegetables, and poultry products has grown, making it difficult for millions of Nigerians to adjust.

The brutal actions of ranchers, kidnappers, bandits, and Boko Haram have forced rural communities to flee their homes, disrupted markets, and reduced agricultural productivity as the majority of farmers abandoned their farms and fled to safer areas.

#3. Foreign Exchange Issue

For years, Nigeria has struggled to meet the enormous demand for foreign currency that is required for importation.

Strict capital controls enacted by the government haven’t done much good.

Being a consumer economy that is strongly dependent on imports, the lack of foreign exchange contributes to the increase in the cost of commodities, particularly food, as dollars are required to purchase items like wheat, maize, dairy products, and other items that Nigeria mostly imports.

The Rise in Building Materials Prices in Nigeria

Due to the fact that these materials are combined to create building outputs, building materials play a significant role in the business (Structures).

In general, it is clear that the price of construction materials has increased by 5% to 15%, notably in the retail sector. In order to get the Best Prices of Products in Nigeria, you’ll need to go to the dealers and purchase directly from them.

The housing market in the nation is still in trouble because of the rising costs of construction supplies, which also affect rents and the price of providing affordable housing for citizens.

Over 60% of the overall cost of constructing a structure is spent on materials, with the remaining 40% going toward labor.

In the previous year, the cost of basic building supplies like reinforcement, sand, roofing sheet, tiles, cement, and granite increased by more than 100%.

In recent times, landlords and property managers have increased rent by 80% in major cities, including Lagos, Abuja, Ogun, Ibadan, Port Harcourt, and Kano as a result of the development.

The Rise in Household Equipment Prices in Nigeria

The COVID-19 epidemic had a significant influence on the household equipment sector.

The pandemic severely damaged and interrupted supply chain hubs in all the world’s main end verticals.

Global output was negatively affected by the lockout, which will also make trade uncertainties and the current industrial slump worse.

With China’s production capacity declining by more than 14% and global sales of electronic components plummeting by almost 40%, the United States has been hardest hurt in the manufacturing sector.

One of the industries that has been most severely affected by the COVID-19 pandemic is the industrial sector, which makes up around 17% of the worldwide GDP.

Some economies all over the world have seen major reductions as a result of this directly affecting global FDI inflows.

The Rise in Mobile Phones and Its Accessories Prices In Nigeria

The Ikeja, Lagos, market for information and communications technology (ICT) accessories is thought to be the biggest ICT accessory market in Africa.

In the market, apart from information and technology accessories, there are computer engineers and technicians that are experts in fixing broken computers and cell phones.

The market, which is open every day except on Sundays and public holidays, is so well-liked that it has drawn new investors and ICT dealers from all over Africa.

This expansion of the market’s size and population has had a significant impact on the economy of Lagos State.

The market’s compliance with a perfectly competitive environment, in which no trader or group of merchants has the ability to affect the price of goods, makes it special.

A large number of gadget lovers, especially mobile phone maniacs, have been drawn to the market resulting from this one element, which has reduced the price of items and made them more accessible to consumers.

Recent investigations, however, show that the situation has changed.

Customers are turning to the black market and unlicensed vendors on the roadside marketplaces instead of the computer market when prices for goods, particularly mobile phones, are rising.

The force that made the market the toast of all phone enthusiasts has been diminished by a number of things.

These include an unstable exchange rate, extortion, unlawful taxes, excessive taxation, double taxation, and hefty import duties and clearance fees.

All of these are putting the dealers in a precarious position because they have no choice but to pass the costs on to customers.

The Rise in Prices of Electronics in Nigeria

A weakening currency rate and other factors that have increased the cost of imports are making reasonably used household electronics increasingly out of the grasp of Nigerians.

Prices of electronics have risen resulting from a number of circumstances, including the COVID-19 epidemic that drove countries to close their borders and the depreciation of the currency.

Frequently Asked Questions

Is it profitable to sell building materials in Nigeria?: Building materials will always have a high demand, therefore producing and selling them is a successful business to launch in Nigeria.
Why are appliance prices rising?: Over the coming year, the cost of household equipment, including TVs, washing machines, and refrigerators, is set to increase. This is primarily due to the rising cost of components like copper, steel, and aluminum. Costs associated with shipping and freight have increased as well.
Is selling technology accessories profitable?: Even though it is a very competitive market, beginning such a business might prove to be extremely profitable because independent shops and kiosks can be found in most malls and other public places.

Conclusion

The major cost of rise in prices of product is the depreciation of real income since an inflationary environment and unevenly rising prices eventually decrease certain customers’ ability to make purchases.

For both those who receive and those who pay fixed interest rates, a rise in prices of product can eventually affect their purchasing power.

SOURCE: VANGUARD