Economist: Happy New Year my brilliant citizen, hope you enjoyed the holidays?
Brilliant Citizen: My Economist, it is good to see you this year. I tried to enjoy it, but the market prices did not allow me.
Economist: Oh, I remember you wanted us to discuss this the last time.
Brilliant Citizen: Yes, the problem still lingers, and I think prices increased during the holiday.
Economist: Inflation usually increases during festivity, so that was expected.
Brilliant Citizen: Whatsoever you like to call it… It did not allow us to enjoy our break. To travel, we could not, as the travel prices increased drastically. So, we stayed at home. To put on electric devices like AC, we will be looking at the units even in the hot weather. The most painful one is to buy Christmas food items, the market was something else. How did we get here?
Economist: My dear friend, I am sorry to note the impact of inflation on you and many others. Let us break down inflation.
Inflation is the sustained increase in prices of goods and services in an economy.
In Nigeria, inflation has increased from about 12% to 15% between January and November 2020. This means that if you bought an item for N100 in November 2019, you would have purchased that item for N115 in November 2020.
Brilliant Citizen: So, what is causing inflation in Nigeria. Is it only Nigeria? Last time, it was recession, now it is inflation.
Economist: These are hard times for many countries, including Nigeria. The inflation is driven by many factors, the exchange rate for imported items, the cost of doing business in Nigeria, the borders that were closed for a prolonged period, insecurity in many parts of Nigeria hindering production and as expected COVID19’s impact on production.
Brilliant Citizen: Ha, so many things causing inflation. Thank God the borders have been reopened, but we hope smuggling is controlled. You don’t have December here (looks at the chart again). I am sure it will be almost 16%.
Economist: Hold on, we must wait for the official number. But the month of December would have seen increased inflation as it was a festive period. Inflation is usually higher in festive seasons as people tend to spend more.
Brilliant Citizen: Ha, no wonder things were even more expensive. So, what is the way forward?
Economist: There is no one solution to it but there are certain things you can do to manage it.
Brilliant Citizen: Tell me what can I do?
Economist: Firstly, you can buy your food items and other items in bulk. With bulk buying you can negotiate prices easier with suppliers.
Brilliant Citizen: Yes, I tried that over the holiday, but some sellers did not agree. I was able to bargain few “sha”.
Economist: Good! Also, you need to try as much as possible to buy from the source. Instead of buying from the supermarkets, buy from the general market where they get directly from the producers and the margins are not so much.
Brilliant Citizen: That is true, many of these supermarkets’ prices are more expensive. I only visit them with my fiancée.
Economist: Hmm, do I smell wedding bells this new year 2021?
Brilliant Citizen: My Economist, that was the plan before, but this country is not helping me. Let me increase my income before I marry and there are more mouths to feed.
Economist: I understand you. Take care, we will see later. Bye for now.
Special thanks to Wale Olusi and Abraham Afariogun for their contribution to this article.