Financial experts say the increasing inflation rate in Nigeria has impacted negatively on the living standard of Nigerians.
The experts who spoke to the News Agency of Nigeria (NAN), said the rising inflation rate has reduced the purchasing power of individuals leading to a decline in living standards.
According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate increased to 17.71 per cent on a year-on-year basis in May 2022.
The NBS also said that prices of selected food items had increased in the last 12 months in its latest Food Price Watch report in the same period.
Prof. Aminu Usman, of the Kaduna State University, said the rising inflation rate meant devaluation of individual income, which amounted to falling purchasing power.
Usman, a lecturer at the Department of Economics, said individuals would now purchase fewer commodities with the same given amount of money.
“This scenario implies that people’s living condition are deteriorating, especially for low-income groups, whose income is rigidly fixed while prices are skyrocketing.
“It signifies the descent of many poor to further poverty and worsening conditions of living.”
He said that a major contributor to the inflationary pressure was food inflation caused by rising food prices, adding “this is expected because the rains have set in and old stocks are finishing.
“This is coupled also with the high cost of fertiliser and heightened insecurity which combined to discourage farmers and farming. This has also caused very low projections for agric output,” he said.
Mr Ben Ekeyi, a Public Financial Management Consultant, said that Nigeria’s inflation rate had a negative impact on the purchasing power of Nigerians in diverse ways.
Ekeyi said one of the impacts included reduced ability to purchase needed and required goods and services, especially where there was no corresponding increase in income.
“Others are a lower standard of living, increased poverty level as Nigerians are increasingly unable to access necessary goods and services.
“Increased school dropouts, especially at primary and secondary levels. More Nigerian families have become unable to sponsor their wards’ education, thereby, leading to drop out from schools.”
He said that economists had established a link between lower purchasing power resulting from inflation and an increase in crime rate.
According to him, where households are unable to cater for the needs of their members, there is a likelihood that some will go into criminal activities.
Mr Paul Alaje, a Senior Economist with SPM Professionals said with the high inflation rate,
it means that someone who had N100,000 this time in 2021, now has less than N85,000 this year for committing no crime.
“It means that the value of what money can buy has reduced. What is the implication? People will now be able to buy less.
“If they could buy two bags of rice before with their income, now they can buy less than two bags.
“Does it mean that hunger in the family has reduced? The answer is No. People are still hungry but their livelihood resources now have weaker purchasing power.”
Alaje said this situation may put several families in jeopardy as some members may lose their jobs because of the failure of their employees to pay them due to a decline in sales.
A cross-section of Nigerians who spoke to NAN said the increasing inflation rate had reduced their standard of living and made saving impossible.
Mr Isaac Ighure, a pensioner said the inflation rate had reduced his standard of living, adding that it was the same situation with many pensioners in the country.
Ighure said many families were “cutting corners ” in a good way just to be able to eat.
“Among pensioners and the elderly, inflation is wreaking a lot of havoc, we are barely managing to survive.
“Pensioners are on their own, they are suffering, the government does not support pensioners in any way and there is no policy for the elderly in general.
“How do you pay your children’s fees, pay rent, treat medical issues, etc, as a pensioner? Some pensioners are maintaining their graduate children who do not have jobs.
“You see many old people dying of hypertension because of all these problems. Their life span could be prolonged if the government can take the responsibility for the health of the elderly,” he said.
Mrs Tosin Ajayi, a Public Servant and mother of three, said the high cost of living caused by the inflation had become unbearable.
“As a mother and a public servant, it has not been easy to survive in today’s economy. You will not believe that 90 per cent of the family’s income is used for expenses. You cannot save anymore.
“The cost of living is high and it is becoming unbearable for everyone. From food items to other consumables, gas, electricity, etc, it is worrisome.
“What I do as a mother is to tell my kids the reality on ground. I tell them that it is unacceptable to waste food and to be appreciative of what your parents give you.
“We are calling on the Nigerian government to seek out ways to reduce the inflation rate, 17.7 per cent rate is unacceptable to us. This is crucial to prevent crime rate and illegal activities”, she said.