Nigerian Households to Spend Majority of Earnings on Food in the Next 6 Months — CBN

Nigerian households are expected to allocate a significant portion of their earnings to food purchases over the next six months due to the country’s soaring inflation rate, according to a recent survey conducted by the Central Bank of Nigeria (CBN).

The survey, conducted from July 22 to 26, 2024, highlights the growing financial strain on Nigerian families as they grapple with rising costs of living.

The inflation rate in Nigeria, as reported by the National Bureau of Statistics (NBS), currently stands at 33.40%, with food inflation surpassing 40%. The CBN’s Household Expectation Survey, which polled 1,665 households across all 36 states and the Federal Capital Territory, revealed that Nigerians plan to spend approximately 54.9% of their income on food items in the coming months.

The survey results show that many households are preparing to cut back on non-essential expenditures, focusing instead on necessities such as food, education, transportation, electricity, and medical expenses.

Specifically, the spending outlook for the next six months indicates that 54.9% of income will go towards food and household items, 35.4% on education, 30.2% on transportation, 20% on electricity, and 12.2% on medical expenses.

Conversely, the survey revealed that households do not plan to make significant investments in big-ticket items, such as houses, cars, or household appliances.

Also, there is little intention to invest in landed properties or other investments, and many Nigerians do not plan to save any part of their income.

This reluctance to save or invest reflects the current financial pressures, with many households indicating that they will need to dip into their savings or incur debt to make ends meet.

The survey also sheds light on the public’s perception of inflation, with 83.7% of respondents describing the current inflation level as high, registering a negative index of -61.1%.

Businesses, while also pessimistic, were slightly less harmful in their outlook compared to households, with large businesses showing the highest concern over inflation at a -70.8% index.

The survey’s breakdown by income group revealed that those earning between ₦150,001 and ₦200,000 had the most negative perception of inflation, with an index of -66.4%.

Meanwhile, respondents earning above ₦200,000 were slightly less pessimistic, with a -58.3% index.

Despite the bleak outlook on inflation, many Nigerian households expressed hope that the naira, experiencing a sharp decline, will appreciate by January 2025.

The currency recently fell to ₦1,598 per US dollar, with a further drop to ₦1,639 due to a shortage of foreign currency.

However, respondents are optimistic that the CBN’s monetary policies will help stabilise and strengthen the naira in the new year.

The CBN survey also revealed growing concerns among Nigerians about the country’s economic future.

A significant 80.9% of respondents believe that the economy will weaken further if prices continue to rise at the current pace, with only 3.2% expecting the economy to strengthen.

Key factors contributing to the inflationary pressures include rising energy costs, which increased from 90.6 points in June to 91.8% in July, and a persistently high exchange rate, which slightly rose from 88.3 in June to 88.8 in July.

Transportation costs were also identified as a significant driver of inflation, with an 88.5% impact during the review period.

However, despite these economic complications and effects on Nigerians, the citizens have condemned the government spending and lavish lifestyle of politicians amidst the country’s financial complications.

In many instances, recent reports that the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, and his four deputies purchased an ultra-modern armoured vehicle and awarded themselves hefty allowances.

Also, President Bola Tinubu acquired new presidential jets without disclosure of the total price, which has led to widespread criticism. Also, the Vice President’s official residence in Abuja was renovated with 21 billion naira, sparking further debate on government spending priorities.

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