Nigeria Economic situation update
We are seeing some economic relief, we don't know how far this will take. We are some days away from the ember season which holds a high goods price records. Ok, let's be positive and hope things even gets better and better. I have been following the goods market (the local food production and consumption market to be more precise). My coverage is mainly on the state of my country. When prices of consumables drop in the city it is indeed a Sign of economic relief.
You shouldn't be ignorant of how these local markets affect the overall production, consumption and expenses. With the low cost of goods comes customer relief and money is likely to flow into other channels of the economy. When consumer panic drops, attention is not given much to forgone alternatives. Have the reverse and everyone is ALL eyes on survival. transactions on other parts of the business line (service especially) usually drops.
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The recent three days strike was one of those occasions I was thinking the entire market was going to bounce back hard. Thank God it ended within three days and to be more precise it lasted only a day in my part of the country. So from bouncing back to inflation to another free fall to give citizens a needed relief. Let's just hope there will be no other thinking of a strike as we cross into this hot zone four months.
The hard commodity and foreign product prices have not seen changes yet. Sellers are still tallying their sale to dollars price, it has been one of those debates between buyers and sellers. Local food prices have dropped so why not also follow suit? The explanation is always very long, let's not center there, we will be solving one thing before another. I have more concerns for the local markets, it carries more distress calls. You have to consider how parents with three to four children will be coping. Some even go as much as having up to five and seven. Maybe they never saw what was coming.
I will be measuring the market by the TOP three consumed goods in the local market; Garri flakes, rice and beans. Garri flex is always the most tagged ‘poor man food’. So it seemed until all odds changed. I could remember it was selling at 2½ cups for N1000 early this year or late last year. A non-Nigerian may not really understand what is going on here. To make it clearer, N1000 is the highest denomination and it can also salvage 2½ small cups of garri, something that used to be sold for N50 and less depending. You can see the margin gap. It’s price retraced from that all ⇪ high× and was selling around 5 and 6 cups for a while.
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We just saw I break out to 9 and 10 cups last month and we are currently talking of 11 and 12 cups for N1000. I know we are still behind old time selling prices but we have to appreciate this relief. From 2½ to 11 cups, many households are seeing a long time awaited relief. There are some factors behind this changes; new local goods sellers flooding the market and helping to uncover ‘extorting prices’. This is one advantage of a competitive market.
Tracing the price of beans from 2020 was a CUP for N80 to N100 at most. We saw a later shift to N150 and N180 around 2021. The prices kept on shifting till it hits apex N300 (or so we thought). Beans had always been an undermined good source of protein and when this was fully discovered it has been selling at N500 for a long time this year. The thing is that consumers' preferences started changing to the affordable local meals and it turns out beans were no longer common when demand increased. I never imagined a cup of beans tallying with rice price until this year. It has been an economy of new all time high records. Ok, the prices of beans just retraced to N350 and N400. With the way things are, we might see a further retrace.
To conclude, let me add, the Nigerian economy is seeing some internal product relief, something that has been long awaiting. The prices of rice has also retraced. The cap rice (imported brands) is selling around N400, while the local brands are costing around N250 and N300. Trust me, there were times the locals were selling at N400. Anyway, the rice market has not really been of much higher concerns; the locals are always much concerned on the garri flakes. I will be doing a follow up article as we enter the ember season, will be see another retracing or can goods fireback to what we NOW see as standard ways
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