One does not require any star-gazer to know that the Nigerian economy has not done well as expected over the past two years or so. At least, not for consumers whose lean resources and purchasing power have continued to weaken despite making adjustments to be able to cope with rising inflation.
The Consumer Price Index (CPI), which measures changes in the purchasing power of the currency and price level of the market basket of consumer goods and services purchased by households has shown a consistent rise in the prices of products across categories, month-on-month.
InsideBusinessNG’s survey and analysis of fast-moving consumer goods and household goods in Nigeria from May 2019 to May 2021 attest to the fact that Nigerian consumers have paid more for essentials over the last two years, a fact which the National Bureau of Statistics (NBS) has buttressed in its monthly reports that also indicated rising headline inflation.
Belt-tightening macro-economic policies by the Federal Government including foreign exchange volatility, high cost of production and the effect of the Covid-19 pandemic has combined to impact negatively on the manufacturing sector, resulting in high cost of goods and services.
Sometimes, manufacturers and producers in a bid to break even have to lower their cost per unit by reducing the volume or size of their products, in a situation where they cannot increase prices. But this strategy rarely helps in the long-term, thus leaving them with no option than raising prices. This has been the market trend for a very long time now.
For instance, market intelligence carried out by InsideBusinessNG show that prices of all categories of goods have increased multiple times over the past two years, and there are indications that the upward swing may not abate any time soon.
Take the Carbonated Soft Drinks (CSD) segment as an example: prices of 50cl or 60cl PET bottles of Coca-Cola, Fanta, Sprite, Pepsi, 7up, Big Cola, Bigi, La Casera, RC Cola etcetera, which sold at N100 per bottle three months ago have all increased by 20% due to rise in the cost of sugar and other ingredients. A bottle now sells between N120 and N150 depending on the brand.
Malt drinks, which used to sell at N120 per can now sell at between N150 and N200 while the price of a 75cl bottle of table water is now N70, up from N50. High premium tables water brands such as Eva and Pure Life even sell at N100 for the 75cl bottle while one litre of Eva, for example, sells for N150 and even higher depending on the location.
Most beer brands such as Star lager, Harp, Gulder, Heineken, Guinness Stout, Legend Stout, Trophy, Goldberg and 33 export etcetera have also increased their prices from the previous N150 per bottle to between N200 and N250 depending on the brand. Prices for the can variants have also increased from N120 to between N150 and N200 depending on the brand.
Prices of household consumables such as corn-based flour such as Semovita and Semolina, noodles, dairy products especially milk, beverage drinks such as Milo, Bournvita, granulated table sugar, cooking oils, biscuits, bathing and laundry soaps have also maintained a steady rise over time.
For example, 2kg, 5kg and 10kg bags respectively of either Semovita or Semolina, previously sold at N700, N1,500 and N3,250 respectively two years ago currently sell at N900, N2,200, N4,200 or even higher depending on location.
A bar of bathing soap that sold for N80 about two years ago now sells for between N100 and N120 while the 25g of washing detergent previously sold for N20 now sells at N30.
Cooking oils have not fared better. Depending on the brand and quality, the 1-litre bottle previously sold at N850 is now N1,200; the 2litre jar of N1,650 before is now N2,100 while the 3litre bottle of N2,850 is now N3,050. The 5litre jar of N3,450 now sells N4,950
Prices of noodles – the delight of children in many homes – have equally gone skyward. A carton of Minimie and Golden Penny noodles which both sold for N1,700 is now N2,100 while top-of-the pack Indomie noodle brand, previously sold at N1,800, later N, 2000 and now between N2,400 and N2,500.
An increase in sugar price has also affected manufacturers of sweet candies and biscuits resulting in upward price movement. For instance, a wrap of candy that used to sell for N5 is now N10 while the smallest pack of N5 biscuits is now N10 or N20.
Sausage roll brands like popular Gala, Meaty, Hotty, SuperBite, Beefie, Yum Yum, Rite and Bigi beef rolls have also undergone some kind of ‘transformation’ in response to inflation. In order to maintain price stability, producers have significantly reduced the size and ingredients in their sausage rolls while UACN Plc, producers of Gala, for instance, produces both the mini size Gala and bigger size, which sells for between N50 and N70, and N100 respectively.
Explaining the reason for the high cost of consumer goods, Inventory Manager, Coca-Cola Nigeria, Ibrahim Ahmed blamed the high cost of production occasioned by forex and importation of raw materials for the increasing prices of carbonated drinks.
“Sugar is the main reason for the increase because it is a bigger part of the production of soft drinks,” he said.
A dealer in food, pharmaceutical and industrial chemicals and additives, Subair Ademola told InsideBusinessNG that the high cost of obtaining forex and Covid-19 affected the international prices of reagents and addictives, which in turn has resulted in low production activities in the manufacturing sector across all categories of industries.
‘‘It has been tough for the majority of importers to access foreign exchange, and the situation is worsened by the spiralling effect of Covid-19 as some countries have yet to fully open up their economies. So, the quantity of reagents and additives required for local manufacturers doesn’t go round. There has been a persistent demand-supply gap, which necessitates continuous price increase by producers,’’ he stated.
A consumer analyst at United Capital Plc argued that, based on the principle of cost analysis, the price increase is inevitable where the cost of production is high. “It is not possible for prices to remain stagnant with the naira devaluation that we are experiencing. The cost of producing the syrup for some of these sugar products has gone up significantly considering the dollar impact, so they need to increase prices,” he opined.
A cross-section of distributors, wholesalers, retailers and consumers decried the rising cost of consumables and household products in the country, lamenting that the current state of the economy was not good for anyone as well as the country as a whole.
Most of them said high prices of goods reduce the disposable income of an average worker, which in turn results in low patronage for them. They called on the Federal Government to do everything possible to halt inflation in the country.
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