The current increase in price of goods and services is so alarming in Nigeria. Since the economic recession that hit the polity in 2015, resulting from the global recession regime, things have never been the same.
In January 2021, consumable goods shot up in price that the common man and the peasant could not afford a simple three square meal.
A lot of factors could be responsible for inflation in both composite and complementary goods. Here, I would like to give more insight into the inflation conditions that have possessed our nation, using my city of residence (Lagos-Nigeria) as a case study.
Government Regulation
The government of my dear nation is only playing lip service to regulating prices through the price control system. Rather, the privatisation of government.
Nearly all government parastatals have been sold to private individuals, thereby controlling the price. For instance, power supply from the national grid is in the hands of few individuals. Now power supply is directly in the hands of distribution companies.
Water supply is not even something to write home about. Individuals have resolved to getting water through drilling boreholes. Hence, good and drinkable water is scarce and hence increased in cost.
Hoarding
Gas and fuel which is the driving force of small and medium scale businesses in Nigeria have also suffered.
When prices are being compared in terms of oil producing countries, Nigeria sells high to the final consumers.
It is amazing to see that fuel stations will hoard fuel, refuse to sell to commuters and domestic users, making the price pump up and sell to make abnormal profits. This is the bane in our society and the people are lamenting.
Hoarding, which is one of the instruments used by wholesalers and at times retailers to control price, causes inflation.
Growing Economy
When an economy is expanding, there is a tendency for the price of commodities to spring up. For instance, there is currently a high rate of infrastructural development in Nigeria. Hence, life in the city is becoming more difficult on a daily basis.
For instance, the cost of transportation in the mega city plan of Lagos will greatly increase. The use of private cabs or Uber has made movement within the metropolis fun, easier but expensive compared to when the population here is on the low.
Increase In Public Spending
The politicians who have access to free money, or money stolen from the government coffers is also responsible for the inflation rate in our beloved Nigeria.
It is crystal clear that money laundering is a capital offence and nations of the world are working tirelessly to ensure that the state treasury is safe and utilised for the infrastructural development of nations.
From time immemorial, public office holders have always taken or should one rather say stolen, what is meant for a nation for personal use. To say the least, this is a major feature of third world nations. Therefore, the socio-economic development of nations in Africa have been greatly affected very seriously.
Borrowing and Government Foreign Policy
In my country, Nigeria, which is believed to be the greatest economy in Africa, our politicians and public office holders have in large extent stolen money. Sometimes, the amount stolen, when calculated, is abnormal. The state has been depleted to the extent that our borrowing with international organisations like the International Monetary Fund (IMF) and nations have made living standards reduced to the nearest minimum.
Information being shared has it that over 90% generated revenue by the federal government is used to service debts. That's quite appalling, don't you think. After that payment, the government has nothing to run the economy with.
Yet, the government keeps borrowing. China, Russia and the US have currently asked that the debt be paid in crude oil which is the dominant source of revenue for the Nigerian nation.
This has nonetheless affected our economy, causing inflation and making life hard for the commoners.
Population Rate
Apart from irregularities from the government, it has been noted that the geometric increase in population may be one of the reasons why the cost of goods is increasing.
When the demand for a particular good is high, the price may also increase as a law of demand and supply.
In January 2022, the inflation rate in Nigeria increased from 2.7% to 13.3%. This came at a time when salaries and wages had remained constant.
To say the least, the nation is currently faced with economic recession.
The was first published Here
