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Job Osazuwa
The coronavirus episode has brought unprecedented changes to humanity in so many ways. Demand and supply of goods and services have been gravely impacted in diverse manners.
There is hardly any good or service whose price has not been adversely shifted due to the COVID-19 pandemic that has continued to ravage the world. Transport fares, prices of food stuff, electronics, clothes, and others have steadily be on the increase since the outbreak of the disease in Nigeria in February.
Many families have further been plunged into the abyss of poverty. Jobs have been lost and employees’ salaries and wages keep shrinking by the day, yet prices of goods and services are skyrocketing. The victims are looking forward to the government for a quick intervention, but their hope appears glimmer by the day.
Prices of staple foods have increased, and just last week, the price of premium motor spirit (petrol) was increased from N141 per litre to N150. A number of cable television networks have increased the cost of their packages. Although DSTV has not announced an increase in the subscription rates for its packages, many people are convinced that it might be announced very soon.
Different experts have predicted that some major drivers in the COVID-19 pandemic would matter most for Nigerian’s economic growth. These include oil prices, consumer demand, trade and investment, non-oil exports and investment and capital flow.
Within the last five months, most of the predictions have come to pass, and are quickly reshaping people’s way of life.
COVID-19 has become a global threat as it has led to a shutdown of economies around the world. Apart from the resultant health crisis and hundreds of thousands of deaths so far recorded around the world, the disease also led to national lockdowns, curfews and other forms of restrictions as one of the measures to contain its spread. Such restrictions bring a lot of damage to consumers’ demand, businesses, revenue generation and employment, among others.
As the world remains under quarantine orders, companies are seeking innovative and sometimes brutal ways of dealing with the situation in order to remain in business. But Nigerians, having been at the receiving end of these gradual and sharp increases in prices, are lamenting bitterly and calling for something to be done as soon as possible.
These aggrieved Nigerians are calling on all authorities and stakeholders concerned to wade into the situation, especially for the sake of the common man whose income has either remained stagnant or further reduced.
There is no argument that the restrictions currently imposed on cross border trade have significantly distorted supply chains for manufacturers and providers of certain services. The effects, as already being witnessed by Nigerians, are multi-dimensional and disastrous.
Analysts believe that the burden of the economic global crisis should not be pushed to the consumers alone. Goods and services provider have, therefore, been advised to localise their supply chains by offering a high degree of convenience to customers.
In the of all this, the Federal Government also increased petrol pump price. This is one move that many critics have strongly condemned. Nigerians had commended the Federal Government when it reduced the price at the early stage of the economic crisis. But government has seemingly reverted to the old prices, stating that market forces now determine the prices.
An embittered Nigerian, who resides in Lagos, Adebiyi Tunde, told the reporter that government at all levels disappointed and abandoned Nigerians at their time of critical need.
“I have siblings who live and work abroad; one in Canada and another in Spain. I often feel ashamed to be called a Nigerian anytime they narrate to me how the governments over there are approaching the pandemic. Over there, you will see a sincere and genuine approach with human face.
“Palliatives are distributed to people who genuinely need them. Tax holidays are given to companies who are obviously affected by the virus. Loans with no or low interest rates are given to industries as bailouts. But people worked for 30 days in Nigeria and their employees decided not to pay them their salaries, even when they have the financial strength to pay. And nobody is fighting the cause of the weak in our society.
“Till this moment, I can’t think of anything the Nigerian government has done to cushion the effects of the pandemic. This is another tragedy that could happen to citizens of a country. We are supposed to be protected by government, particularly when our strength fails us. Here, the reverse is the case because government and others will continue to milk us dry so that their businesses can continue to flourish,” Tunde said.
Indeed, during these uncertain times, business owners are expected to display some level of empathy to navigate the current economic challenges and retain their customers when the crisis ends. Organisations have been called upon to nurture and treat customers in the right way now, for the purpose of long-term gains.
Before COVID-19, prices of foodstuff (staple foods) were relatively stable for a long time. For instance, a bag of foreign rice was sold for between N18,000 and N21,000. It is now sold for between N27,000 and N29,000. A plastic (‘paint’) bucket of white andyellow gari rose from between N250 and N400 to between N600 and N900.
Prior to this time, one could get a tuber of yam for as low as N300, but it suddenly jumped to about N800 for the least size. Plantain became a no-go area for many households because the price has risen sharply. Price of bread has also been slightly raised by bakers. Prices of groundnut and palm oil, sugar, beverages, frozen products, flour, noodles, tomatoes and others went up and have refused to come down till this moment.
At the moment, many Nigerians only eat what they can afford. For harsh economic reasons, most families have jettisoned the calls by nutritionists for constant consumption of balanced diets.
Also affected are building materials, including cement and iron rods.
Another major hit is the foreign exchange rate. Nigeria’s currency has been devalued and become almost useless to the people. Inflation has set in, disrupting everything in its way.
An economist who handles procurements for a multi-national company in Lagos, Mr. Murphy David, said the naira would always lose value at any slightest upset as the country largely depends on imports for its consumption.
“Economies are not built by trial and error. Success doesn’t happen by accident, but by deliberate plan and sustained efforts. What we are experiencing now is a result of systematic failure by successive governments. We have been consuming without producing any major thing for other countries to buy,” he said.
Businesses with dollar-base input costs are experiencing intense pressure. As the prices of goods produced and services rendered by these categories of companies are pushed up, the consumers’ wallets continue to shrink.
Exchange rate of N360 to one dollar was stable for years. But it has somersaulted and now fluctuates between N480 and N500, while the Euro and pound sterling that were previously exchanged for N380 and N430 now go for between N530 and N580 respectively at the parallel market. This has affected the prices of everything that is imported into the country.
Chidi Oji lamented: “My Star Times subscription has since been increased. From August 1, their basic bouquet now goes for N1, 700 from N1, 300 monthly, while the classic bouquet is now about N2, 500 from N1, 900 monthly.”
Another disturbed Nigerian, Obinna Chidiebere, who said that his salary has, since March, been slashed by 50 per cent said Gotv has also increased the prices for its packages since June
“What we used to enjoy at N1, 900 is now N2, 450. This was done at a time that Nigerians are struggling to survive. But the company said it was increasing it because the government raised the Value-Added Tax (VAT) from 5 per cent to 7.5 per cent. We are the ones bearing the brunt,” he regretted.
“It is an act of wickedness for any company to be increasing prices of goods and services at this particular time. But then, companies are also struggling to survive. One understands that they are in business and not charity organisations. There is no stable electricity anywhere, and people pay a lot of money on powering their generators. I think government needs to help both the companies and the consumers.
“Although no such announcement has been made, I’m sure that DSTV would also announce an increase soon. It is no rocket science to know that. Newspaper houses also reduced their pages. Doing business now is harsh, but the consumers are also in dire straits. We all need help.”
Contributing from the Diaspora, Mrs Mercy Aghedo, who lives in Valencia, Spain, told Daily Sun that the impact of COVID-19 could not affect the prices of foodstuff, television and internet subscriptions, transport and other basic needs of man.
“There were occasions whereby we experienced shortage in certain commodities, but not increase in prices. Of course, everything is regulated here. The government or producers couldn’t have increased anything on their own because the people will enter the streets to protest.
“My three children have continued to enjoy their benefits from government. Their academics didn’t stop for once. Everything, including their examinations, was done online. The beautiful thing is that the government quickly provided laptops, tabs or smart phones to students who didn’t have. I know that Nigeria still has a long way to go in this area.
“This doesn’t mean that some companies didn’t sack their workers here. Yes, people lost their jobs but it didn’t result to hunger. There are transparent templates designed by the system here which ensure that such affected people are taken care of over a given period of time,” Aghedo said.
The Federal Government in February announced an increase in Value-Added Tax (VAT) from five per cent to 7.5 per cent, leading to ripple effects on the prices of goods and services.
Some consumers have lamented that some come companies and dealers hide under the guise of VAT to increase prices of items and services, even on the ones that are exempted from the increased VAT.
