Consumers Lament Arbitrary Price Increase In 2017

NBS, trade, inflation

Lagos – The year 2017 will go down in recent history as one characterised by escalating price increase of virtually all consumer goods and services.

The year was mostly characterised by uncertainties in most markets across the country thereby compelling consumers to grapple with the challenge of buying seeming unaffordable commodities in the face of scarce resources occasioned by economic recession that highlighted the year.

Throughout the year, starting from January to December 2017, Consumers groaned under high prices as most staple food items increased by as much as 60 per cent.

The situation which particularly manifested in  the form of crashing oil prices and weakening value of the Naira, left sour taste in the mouth of consumers.

According to a data released by the National Bureau of Statistics (NBS), inflation rate in January 2017 was 18.72%.

This represents an increase of 0.17% over the December 2016 inflation rate of 18.55%. The increase was more than the 0.07% increase recorded between November 2016 and December 2016 but, was far lower than the sharp increases recorded month-on-month during the first three-quarters of 2016.

The highest increase recorded in 2016 was a 1.9% increase from 13.7% in April 2016 to 15.6% in May 2016.

Additionally, a separate food index showed inflation at 17.82 per cent from 17.39 per cent in December 2016.

According to NBS, the faster pace of growth in headline inflation, year on year, were recorded in the following products such as bread and cereals, meat, fish, oils and fats, potatoes, yams and other tubers, wine and spirits.

Other products that were affected cut across clothing materials and accessories, electricity, cooking gas, liquid and solid fuels, motor cars and maintenance, vehicle spare parts and fuels and lubricants, for personal transport equipment and passenger transport by road.

NBS in January looked at the inflation numbers on a month on month basis, and concluded that headline inflation was driven by passenger transport by air, fuels and lubricants for personal transport equipment, liquid fuels, cooking gas, oils and fats, fruits, cheese and eggs, fish, meat and bread and cereals.

Mr. Michael Gboko, an estate agent and clergyman, who spoke on the severity of the inflation that triggered high prices of virtually all consumer goods and services, and hardships, throughout the year said: “It is by God’s grace that most people are still alive. Nigerians have never witnessed this kind of hardship. It was tough.” I pray God would see us through the remaining days to 2018.”

Mrs. Modupe Aromolaran, a trader at Ojuwoye market, said the unprecedented inflationary trend, which affected prices of consumer goods, was occasioned by ineptitude and high level of corruption among the leaders.

She prayed that such inflationary trend should not recur in 2018.

Not only were price increases witnessed in consumer goods, particularly foodstuffs, tariff for services also went up beyond the reach of some consumers.

Electricity consumers were forced to suffer the double jeopardy of poor services and high tariffs. In the year 2017, electricity supply was observed to be abysmally poor and most consumers provide their own power supply by acquiring generators, which they fuel at exorbitant rates in the face of high tariff.

Within the year under review, the issue of high tariff in electricity drew the attention of lawmakers at the lower house following a motion by Rep. Shehu Musa (Bauchi-APC on the “need to evaluate the multi-year tariff order system of electricity tariff in Nigeria.”

The lawmakers, precisely in July 2017, said that the increase was unjustified considering the commitment of N213 billion to the operators in the power sector, who had failed to boost supply to Nigerians.

Musa recalled that in 2008, Nigeria Electricity Regulatory Commission (NERC) adopted Multi-Year Tariff Order (MYTO) methodology to regulate electricity tariff and the tariff setting, in consultation with stakeholders, labour and consumers.

He said it was to provide correct pricing of electricity, taking into consideration the key principles of cost reflectivity, affordability, incentives for efficient operations and other assumptions, including tertiary rates, exchange rates, inflation, gas prices and subsidies.

According to him, the new tariff regime continues to increase from an average of N10 per kWh in 2007 to an average of N24.20 per kWh in 2017 without significant improvement in power supply.

Speaking at the Sixth Presidential Business Forum held at the last quarter of the year under review, Vice President Yemi Osinbajo said payment of high electricity tariffs is inevitable for Nigerian electricity users.

A statement signed by Laolu Akande, the vice president’s media aide, quoted Mr. Osinbajo as saying that the government is, however, trying not to increase electricity tariff.

“Listening to questions concerning lower tariffs, we must pay higher tariffs, these sorts of things are inevitable,” Mr. Osinbajo said.

“What we are trying to do is not increase tariffs for now, but how we can ensure we clean up the entire value chain. I’m sure you are aware of the Payment Assurance Guarantee which we put in place for over N700 billion to ensure gas is paid for and for liquidity in the whole value chain.

In the absence of price control boards, the fixing of prices of commodities and services were ostensibly in the year left to the whims and caprices of sellers of goods and service providers.

Mr. Kenneth Asibelua, who sells foodstuffs at Oshodi told INDEPENDENT that the government is not truly playing its role, stating that: “There is no reason for consumers to be subjected to market situation that is characterised with escalating prices of consumer goods”.

In the month of December 2017 when many consumers hoped that the year, which they found to be very challenging, was ending, they were literarily enmeshed in the labyrinth of tales of woes some few days to the celebrations.

Indeed, consumers passed through hard times orchestrated by soared prices in the year, and that was evident in the way they celebrated the yuletide, which many adjudged to be the worst ever.

Like other respondents spoken to by INDEPENDENT, Mr. Olayiwola Adenikan, who confessed to be a regular shopper at Ojuwoye market at Mushin said: “It would be very bad for Nigerians to experience the kind of inflation that was experienced in 2017”, wishing that 2018 should not be the same.

Mr. Azeez Hassan, a trader at Idi Araba, also in Mushin, said the government should try its best in bringing down the prices of consumer goods in various markets, as the situation was appalling and discouraging. 

Obviously worsened by the fuel crisis that highlighted the last quarter of 2017, particularly in the month of December, Mr. Godwin Osayemeh, a mechanic who lives in Ikorodu, Lagos in a media parley with INDEPENDENT, said he was left only with one option, which is to relocate to his home town in Edo State where he will not pay to feed.

“Things are really getting out of hand to live in Lagos. There is no fuel. There is no kerosene. The little you can see, the price is beyond your reach. You cannot afford it. Everyday prices of food keep increasing. There is no electricity. We live on generator, yet you get tired of looking for fuel, which sold at more than N250 per litre at the peak of the crisis.

The costs of foodstuffs in various markets have skyrocketed almost beyond the reach of both the middle and lower class living in Lagos, resulting in an upsurge in the rate of street and corporate begging within the city and neighbouring towns.

Most of the consumers spoken to by INDEPENDENT wished they would no more experience the adverse market situation that characterised 2017, and prayed that 2018 would be better.

High cost of transportation got so bad in December 2017 that the National Sesame Seed Association of Nigeria (NSSAN) decried the situation in the country.

Alhaji Sheriff Balogun, the National President of the association, in a media parley on Friday decried the situation, saying that it costs more to move goods within the country than shipping goods from the U.S.

He said: “It costs between N800,000 to N1 million to transport a trailer of 30 tonnes of goods from Taraba State to Lagos.

“But you will transport a 20ft container of goods from New York to Nigeria at just 2,000 U.S. dollars or about N600,000 at the official exchange rate and about 700,000 at black market rate.’’

He explained that the transporters justified their high charges on dilapidated Nigerian roads, which damaged their trucks and tyres and deplete their profit margin.

He also complained about multiple taxes, whereby transporters would be forced to pay all kinds taxes before reaching their destination.

“For instance, we pay for about 49 receipts moving goods from Taraba State to Kano and more, if you are moving the goods to Lagos.

“The worst is Benue State where we collect over 20 receipts.

“How can one make profit under such harsh environment?’’ he asked.

Balogun therefore, called on the Federal Government to do something about the transport infrastructure to bring down the cost of transportation.

“The issue of multiple taxes also needs to be tackled.

“This is because high cost of transporting goods within the country, accompanied by multiple taxes lead to high prices of goods in the market.

“It is a challenge because everything about business is about cost and profit.

“If the cost is high, it means profit will be reduced. One will be forced to increase prices to remain in business,’’ the president said.

The post Consumers Lament Arbitrary Price Increase In 2017 appeared first on Independent Nigeria.

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Author: Isaac Asabor