Nigerians to Spend 54.9% of Income on Food as Inflation Reaches 33.40%

September 2, 2024|Ifunanya|Comments Off|African Business News

Nigerians to Spend 54.9% of Income on Food as Inflation

Rising Inflation to Force Nigerians to Spend More on Food

Inflation in Nigeria is projected to continue its upward trajectory, forcing households to prioritize food expenses over other essentials, according to a recent survey by the Central Bank of Nigeria (CBN). The report, titled Household Expectation Survey, highlights the financial struggles that Nigerians are likely to face in the coming months.

The survey, which was conducted between July 22 and 26, 2024, and involved 1,665 households across the 36 states of the federation and the Federal Capital Territory, showed that respondents intend to cut down on non-essential items in the next three and six months. However, they plan to allocate 54.9% of their income on food items in the next six months.

The study also revealed that Nigerians do not plan to spend significantly on big-ticket items, such as the purchase of a house, car, or household appliances. Moreover, they do not intend to invest in real estate or other forms of investments, nor do they plan to save their income.

The respondents’ expectations regarding inflation, borrowing rates, and unemployment are similarly pessimistic. A vast majority, 80.9%, believe that the economy will weaken if prices continue to rise faster than they do now. The respondents also expect the naira to continue falling in the next three months before strengthening in the next six months.

The survey noted that energy costs, at 91.8% in July, are the top driver of inflation. The exchange rate, at 88.8 in July, remained consistently high, while transportation costs were the third driver of inflation at 88.5%.

The CBN survey underscores the economic challenges faced by Nigerians, which are likely to have significant implications for their daily lives. As inflation continues to rise, households will have to adapt their spending habits, prioritizing essential expenses such as food over non-essential items. The government’s monetary policy decisions will be crucial in determining the trajectory of the naira and the overall state of the economy.