Inflation Wreaks Havoc on the Poor, Middle Class, and Rich Nigerians

Nigerians have been suffering from one adversity after another since the pandemic broke out in 2020: from lockdown and its economic consequences to the EndSARS protest to a full-fledged recession — and now, a conflict in Ukraine affecting a country 8,000 kilometers away like Nigeria.

Many people around the world, including Bretton Woods organizations, predicted that the world will be a better place by 2022 as early as 2020. They had no idea that the majority of the globe, including Nigeria, would continue to struggle with rising prices that were beyond the control of any organization, government, or private individual.

When the price of a bag of 50kg rice, arguably Nigeria's most popular staple, reached N26,000 in 2020, Nigerians expressed their displeasure, blaming it on government policies, including the immature closure of borders for food import when the local market was deemed "not ripe enough" to sustain the country.

In his Independence Day speech, President Muhammadu Buhari told Nigerians that food prices would shortly fall across the country by 2021.

At the time, the president claimed that the scarcity was fabricated and caused by "unpatriotic hoarding." He directed the Nigerian Commodity Exchange and the National Food Reserve Agency to work together to resolve the issue.

Food problems, however, do not respond to instructions, as Nigerian history shows – inflation has no bounds.

Inflation is wreaking havoc on the poor

Inflation has touched every aspect of Nigerian life, as evidenced by the fact that it has affected every aspect of Nigerian life. Every level of national consciousness has been hit severely – the poor, the wealthy, and the not-so-wealthy.

Take, for example, water; one sachet of water used to be N5. The poor and a segment of the middle class were the intended market for this product. The retail price of "clean water" has more than doubled in just two years. Retailers are now charging N10 or N20 for each sachet. It is marketed in several Lagos neighborhoods for N30 for two sachets. In 2020, the cheapest option would be quadruple the price.

Chicken Republic is one of Nigeria's most popular restaurants nowadays. Nigerians are actively posting on social media about their favorite food vendor's offerings, with the Chickwhizz meal and refuel packages being the most popular. The majority of Chicken Republic's items are popular because they are inexpensive and have good value for money.

However, the prices of these meals have climbed by at least 30% in the last two years. The refuel meal, which used to cost N500 for a plate of rice and chicken, is now N650 — and in some places, N700.

The rich & middle class are feeling the impact as well

Only the wealthy travel by air in Nigeria, while the poor commute by car to save money. While this is an anomaly in and of itself, the country's security condition is changing that. People no longer fly because they can afford it; many now do it as a result of road robberies and murders.

If we believe that flying is only for the wealthy, then flight prices are hitting even the wealthy hard. The average cost of a plane ticket has doubled between 2020 and 2022.

The cheapest flight in the country in 2020 was approximately N16,500 from Lagos to Akure. On March 22, 2022, the identical flight would cost N37,000 now. The most popular route, Lagos to Abuja, has increased its price from N22,500 to N50,000. The majority of the increase occurred in the previous two months, leaving little time to respond to the shocks. If flying was once a privilege reserved for the wealthy, it has now become even more so.

According to estimates from the African Development Bank (AfDB), Nigeria's middle class accounted for only 23% of the country's population in 2011. When compared to the global average of over 50%, this is a minor percentage.

However, it is a significant improvement over the situation in Nigeria seven to ten years ago. According to the World Bank, Nigeria's middle class accounted for only 13% of the country's population in 2003. However, since 2014, Nigeria's middle class has dwindled and continues to shrink as poverty levels grow.

The United Nations defines the middle class as persons who spend between $10 (N5,780) and $100 (N57,800) each day. According to the African Development Bank, the middle class in Africa consists of those who spend between $2 (N1,156) and $20 (N11,560) per day.

Information should not discriminate against the poor, rich, or middle classes, as it is regarded as a basic human right. This is one of the reasons why there are so many different types of media, from radio to newspapers to cable television.

Cable television is one facet of life in Nigeria that touches the rich, poor, and middle classes. Unfortunately, this sector of the economy has not been spared by the country's inflation. Multichoice had to adjust for inflation in the last week, causing prices to rise over their 2020 levels.

Cable TV prices in Nigeria have risen by around 15% in the last two years, according to price changes. This is lower than the country's overall yearly inflation rate, demonstrating that, despite the increase in cable TV subscription fees, the country's overall inflation rate has remained constantly above 15%.

What this could indicate for cable TV and other goods that haven't increased by more than 15% every year is that greater increases may be required in the near future to stay afloat. To save Nigeria's middle class — and, at this point, every class — the economy must thrive, industries must expand, and foreign and local enterprises must withstand the pandemic's onslaught.

Effect of the Russia-Ukraine War on the Nigerian economy

Aliko Dangote of the Dangote Group warned earlier this month that the war in Russia and Ukraine will have catastrophic consequences for Nigeria if the government did not work hard to mitigate the crises' effects.

The first and most evident effect of Russia's attack on Nigeria is an increase in the price of gasoline at the pump — or an increase in Nigeria's subsidy bill. Oil prices have risen since the war began, fuel prices around the world have been impacted hard, and Nigeria's monthly subsidy cost has just surpassed N300 billion.

Food costs are likely to rise as a result of the war, which is influencing global supplies of wheat, maize, and fertilizer materials, in addition to gasoline prices, which will have a ripple effect on every commodity in the country. Inflation has taken a toll on Nigerians on every side.