In July 2016, SBM Intelligence began to track the price movements of the ingredients Nigerians use to make a pot of nationally celebrated Nigerian Jollof Rice for the average Nigerian family which according to the National Bureau of Statistics, was six people. This meal was chosen because it is a delicacy in every part of the country.
The survey initially covered nine markets in four geopolitical zones. From June 2017, we included two markets in the South South as well, bringing the number of zones covered to five. Based on the data gathered in this survey, we are able to show the trends of food inflation in a simple manner that encompasses most Nigerians. The last release of the index was in Q3 2017. Since we started the index, we have updated it for every month except in December of any given year, where the demand from festivities impact the prices in a manner that is out of the normal distribution. We believe that this index gives a bird eye’s picture of national inflationary trends.
Our tally of these prices from the second half of 2017 up till February of 2018 has showed a negligible increase in the average national index– from ₦6,000 in July 2017 to ₦6,040 in February 2018. Based on geopolitical location, between July, 2017 and February 2018, the most expensive place to cook jollof rice in Nigeria remains Kano where it would cost ₦7,325 to put together the delicacy for six people. This compares unfavourably with Lagos, where a pot of the meal will set you back only ₦5,322, the lowest in the country.
A trend observed by our staff in the field is that Nigerians, hitherto loyal to specific brands, have continued the trend of buying whichever brand is available on the shelves. This presents an opportunity for smaller brands to not only break into the market, but to maintain market share. An increasing number of respondents have indicated that as a result of the now ended recession, they were now more willing to explore more alternatives to their preferred brands as price of their preferred brands moved out of their reach.
Over two days, March 8 and 9, 2018, SBM spoke with 84 randomly selected street corner traders about the effect of food prices on their lives in Lagos. Each respondent answered questions regarding their monthly expenditure on food, how rising costs have changed their financial habits, how these costs have affected other parts of their lives, and what they may be doing, if anything, to improve things. Of the respondents, sixteen (19%) spend ₦60,000 per month on feeding or more, forty (48%) spend between ₦30,000 and ₦60,000 a month on feeding, while the remaining 33% spend ₦30,000 or less per month on feeding. Sixteen of the respondents say that the current inflationary trends for food items, have not affected other aspects of their lives, while eighteen (21%) have started looking for other means of income. Fifteen (18%) of our respondents, have been forced to change their financial habits because of the rise in food costs.
Comparing this to the survey done this time last year, there has been a 1% increase in respondents seeking other means of income, 6% increase in persons saying that the current inflationary trends for food items, have not affected other aspects of their lives, a 10% increase in respondents, have been forced to change their financial habits because of the rise in food costs. The current trend shows that as the purchasing power of Nigerians is decreasing, a ray of light is that although the prices of the very items they seek to purchase are continually on the increase, the rate of increase has slowed down.
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