Why Is Cost Of Living In Nigeria High?

This is the question that rankles the mind of an average person in the country currently.

Here, we will try and review the above question, leaning on the insights of some informed individuals and organisations.

Just recently, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, asserted that some Nigerian households now spend as much as 120 per cent of their income on food alone.

Oyedele who spoke at Chatham House in London, said a government survey showed that some households spend more than they earn on food, forcing them to borrow.

“In fact, there was a survey we did that shows that up to 120 per cent of household income is spent on food. Like how do you spend 120 per cent of your income? You borrow food before the end of the month,” he said.

He said Nigeria’s poverty rate remained above 50 per cent and an unemployment rate of about five per, all of which drew strident reacts.

Speaking during the 67th Annual General Meeting of the Nigeria Employers’ Consultative Association (NECA), NLC President Joe Ajaero identified what he considers driver’s of this high cost of living

He listed two federal government economic policies as key causes thus:

He said these continue to erode the purchasing power of workers amidst the implementation of the ₦70,000 national minimum wage signed in July 2024.

Following up, Dr Muda Yusuf, of the Centre for the Promotion of Private Enterprise (CPPE), alerted that persistent price pressures and inflation were outpacing wage growth, making salary adjustments alone insufficient to stabilise household welfare.

In his article in Dataphyte, Salako Emmanuel submitted that in recent years, Nigeria’s rising cost of living has become a defining economic pressure for households, steadily eroding purchasing power.

Making reference to other price intelligence posts, he excused heavy consumption as main cause of the rising cost of living but persistent price increases in essential food items that form the core of everyday Nigerian diets.

“These price pressures, driven by inflation and macroeconomic issues, have possibly impacted household purchasing power, forcing many Nigerians to spend a larger share of their income on basic needs.

For an economist of the Department of Economics, University of Benin, Professor Hassan Oaikhenan,one way out is for the Federal Government to revive the nation’s refineries and strengthen domestic production.

Oaikhenanwho spoke during a recent interaction with newsmen in Lagos, also called for measures to reduce the cost of governance.

According to him, these will help in ensuring that declining inflation translates into tangible relief for citizens.

He said that although Nigeria’s headline inflation rate had declined, many citizens had yet to feel a corresponding improvement in their cost of living.Nigeria travel guide

According to him, a decline in inflation rate in the country did not necessarily mean that prices of goods and services were falling.

Instead, it only indicated that the rate at which prices increased had slowed.

According to him, this distinction accounts for the apparent gap between official inflation figures and the daily experiences of Nigerians at the marketplace.

Cami Ezenwa is a Writer, Editor, Publicist, Biographer and Journalism Trainer He has worked with the Daily Times, Daily Independent, Financial Standard and Business Television to mention some. His ongoing Corporate Communications Master Class training series equips learners with credible hands-on skills for effective Media Relations, Public Communications & Corporate Affairs amongst others. He can be contacted via 09165809519 or 08180335778.

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