Financial experts have cautioned Nigerians on wasteful spending to reduce the effects of rising inflation heightened by COVID-19 pandemic on their lives.
Mrs Lolade Adesola, a Financial Consultant at L.A Consult, Ibadan and Mr Tunji Adepeju, a Chartered Accountant at Projektlink Konsult Limited, Ibadan, gave the counsel in interviews with the News Agency of Nigeria (NAN) in Ibadan on Thursday.
Adesola said the effects of inflation, now at 14.23 percent, were being felt already by Nigerians, seeing the higher prices on goods.
“Of course, inflation is a time lag indicator; it is what had already happened in October that was measured.
“So, those price increases are already being felt. What we have to do is to realise that this is the time to be careful with our spending.
“We need to spend only on the essentials and search for bargains to ensure that we get value for every naira we spend. Hopefully, things will get better in the new year,” she said.
Adesola said Nigerians should expect that prices could continue to rise, especially with the exchange rate at the level it is and the scarcity of dollars.
She said the scarcity of dollars being experienced would affect many of the imported goods or manufactured goods that use imported raw materials.
The financial consultant said that this would continue to have pressure on their prices, which would affect the cost of living of the average Nigerians.
Adesola urged the government to increase its spending to boost confidence and stimulate economic activities.
“Maybe when there is more spending and there is more confidence, and the effect of lockdown and destruction that followed endsars protest have worn off, hopefully things will get better,” she said.
Similarly, Adepeju said the impact of lockdown occasioned by COVID-19 which disrupted people’s livelihoods and hindered food production was, to some extent, responsible for the inflation rate.
“The pandemic disrupted people’s livelihoods; people could not go to work or bank, food production was affected also. Quite a lot of items planted got burnt, plantations destroyed, especially vegetables, tomatoes, onions, pepper.
“At about this time, we should be harvesting and selling, but where they are not available, the law of demand and supply will come into play, making the prices of goods shoot up.
“The implication is that there is less fund for individuals, because whatever you have, the salary has now been reduced due to the inflation.
“Yet, people have to pay for feeding, rent and other expenses, meaning you have less funds to play with at the end of the day.
“For those that are in business, businesses are in kind of comatose and it means there is no free fund, so this brings down profit.
“Also, the artisan and the self employed have less fund to play around with. Businesses suffered during the lockdown and this also accounts for problems of the economy. So, the inflation is not unexpected,” he said.
Adepeju said people need to cut down on their expenses and pay only for the essential to cope with the present realities.
“It is now a matter of cutting your coats according to your clothes and not even the size now.
“People will have to reduce or re-channel their propensity for wastage because, unfortunately, during the period of lockdown, people were able to cut down on the amount spent on ceremonies.
“But the same people have started spending huge amounts on ceremonies, the money they need to ration to survive for the long haul.
“The same thing is expected now, to manage the available funds and not go back to elaborate ceremonies of any event,” he said.
Adepeju said the government had a lot to do, just like the individuals, to ensure that economic activities were not grounded.
He said the government of Oyo State should look into the possibility of providing water through boreholes for irrigation at the various farm settlements
“This is the time for a place like Oyo State to look at irrigation as an alternative. We have to look at making use of the resources: the water and the rivers that we have around.
“And aside from government farm settlements, wherever they see clusters of farmers, government should provide irrigation.
“Look at Iseyin where we get a lot of cassava and other crops, the government can provide boreholes for farmers there, so that throughout the year, farmers can have water for food production.
“We need to ensure food security by producing more food, this is very important now,” he said.
Adepeju said it was on record that people spent above 50 per cent of their income on food.
“If we can reduce the cost of buying food, then it will assist in ameliorating the effects of inflation, now at 14.23 per cent, on Nigerians,” he said.
Adepeju enjoined government to complete the rail projects to reduce cost of commuting goods and people, which would in turn bring down cost of living.
He also urged individuals to consider pooling resources together to reduce costs spent on transportation and food.
NAN reports that a Congo of rice (a standard measurement used in Ibadan) is being sold for N800, twice its price in 2019.