The National Bureau of Statistics (NBS) on 18 July released the latest inflation figures, showing it has now risen to an average of 16.5% in June, the highest average change in prices of goods and services in Nigeria for over decade. This simply means that the purchasing power of Nigerians has declined by an average of 16.5% in June. So the price of an item that used to cost to say N100 in June of last year now costs an average of N116.50 this year.
But this is just the average change in prices as actually change in prices would differ from item to item. For example, many Nigerians know that a bag of rice that used to cost an average of N10, 000 last year, now sells for almost N20, 000, which is almost a 100% increase.
Also diesel that used to cost an average of N120 per litre in June last year, now sells for about N200 but litre, also almost a 100% change. But there are also some items that have not seen their prices rise steeply. So, the inflation rate is just an average of all the changes in prices as contained in a carefully selected basket of items commonly consumed by the average person in Nigeria.
Nigerians should be concerned about the continuous rise in inflation because it simply means that Nigerians are getting poorer. Rising prices without a corresponding rise in income results in lower standards of living for all Nigerians. So basically, with the 16.5% rise in inflation since last year, the average Nigerian is now poorer when compared to last year.
Faced with the rising prices and stagnant incomes, many Nigerians will be forced to substitute higher cost items for cheaper ones. So where rice becomes too expensive, many Nigerians are now eating more of garri. Also with fish prices now out of the reach of many Nigerians, many are making do with beef and “ponmo.”
Rising inflation is always bad news for any economy as it leads to rising poverty or suffering. Governments therefore work very hard to ensure that inflation does not go out of control. That is why all Nigerians should be concerned that it is continuously rising in Nigeria now.
