Dollar craze takes over Nigerian markets By Paul Ukpabio - Paul Ukpabio's Blog


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Tuesday, 1 March 2016

Dollar craze takes over Nigerian markets By Paul Ukpabio

There is an insidious craze that is fast creeping into the subconscious of Nigerians: it is a craze to hike the prices of mostly essential commodities, which is a fallout of the sharp rise in the value of the dollar and other currencies against the naira.
Kande Daniel

 Musa Mohammed a middle age Hausa man who sells basic consumable items that could be referred to as daily needs via a kiosk at a house adjacent to Ogba bus stop, believes it started with pure water, a 30 cl bag of water wrapped together with light white polythene, popular in major Nigerian cities.

According to him, "when my pure water supplier came three weeks ago to drop bags of pure water for me: he did not joke about the new price he will collect from me. That is because he had increased the price. He told me the price of his bags of pure water has increased. That I should buy at N120 from him and sell at N150 to people that want to buy from me! He said the dollar has increased. "Na so I buy from am and I am selling at N150 per bag now," he replied me in pidgin language.

All around Lagos, consumers of virtually all daily needs have found out that they have to pay more money, for the usual domestic stuff that they used to buy, making quite a number of edibles and domestic daily needs now beyond the reach of a lot of people. Items such as egg, a tuber of yam, which initially was sold at N200, had doubled in price within the last three weeks. Even vegetables and manufactured items like beverages, toilet roll, sweets and biscuits, which are daily needs in most Nigerian homes.

But why the sudden increase in the price of these basic needs, Esther Akubueze a trader at the popular Ipodo market in Ikeja, Lagos, looked at this reporter, laughed heartily and called it, ‘the dollar craze!’ Dollar craze? ‘Yes, it’s the dollar craze,’ She replied and went on to explain. “Are you not a Nigerian, you no see how dollar don go up, them say na N400 na im dollar be now. So things for market must go up!’

Asked how the price of dollar affects the sudden cost of garri that has been stored inside her shop for weeks before the price of dollar went up, she simply laughed and said, ‘my brother, I no go school o, but I know say, dollar don go up, so we must increase our prices. Anyway, we no increase am much, na just small.”
Hannah Ezekiel

But trying to help her out was a younger trader who equally trades next to her stall, and who also sells garri, rice, beans and yam, “Oga,” he began, if dollar don reach N400 today, he means say, by the time we sell this our market finish and go back to the market for more of our product, our suppliers would have increased the money of the new one they will sell to us, so we have to increase the price now, so by the time we get to the market, we will have enough money to buy more products!”

Even on the outskirts of Lagos, the story remained the same. Madam Taiwo Olabode who owns a provision store at the popular open ‘market in Mowe, when asked about the sharp increase in prices of her provisions such as tea bags, egg and so on, she simply replied that the dollar has increased so that is why the prices have gone up! "We heard that dollar was heading to N400 so our goods have to increase in prices."
Philomena Ahove

But did the company selling the tea bags and the eggs to her increase the prices of these products? We asked her. She simply shook her head in disbelief, as she thought about our unguarded question. Her countenance indicating that we didn’t know much about how these things work in real life!

After a while, she replied in slight annoyance, struggling to keep her composure to gather her thoughts and choose her words accordingly, “when there is no cash in the people’s hand and market is not moving like it should move, it means hardship. Now dollar is going up which means that people will not have money to spend. It is these things that we are selling that are our own livelihood, it is all we have, so we must increase prices to generate more money for ourselves. Don’t forget that it is from what we get from this shop that we will also use to go and buy things!”
Emmanuel Matthews

Ikenna Madu who trades in hand bags in the same market supported Madam Olabode. He insisted that the signs that the dollar is going up in the market means that things are tough everywhere and “we have to increase the prices of our goods."

But a consumer Philomena Ahove who feels the pinch of this sudden increase in prices because of the dollar, insists that, “in real sense of it, whatever happen to dollar shouldn't have any effect on the food stuff except on those items that are imported? But Nigeria is a unique country; here we take advantage of every situation because we have a culture of impunity from rulers to the subjects. What do I mean by culture of impunity, rulers are feeding fat on the economy, where the moral justification to control what is happening at the lower rung of the ladder. God bless Nigeria.”

Justin Akpovi-Asade, journalist, columnist and media lobbyist when asked for a comment, had this to say, “Of a truth, the dollar does not directly affect the prices of these commodities you listed above, but the ripple effect does affect them. I am not an economist and will not pretend to be one, so I am looking at this issue purely from the ordinary man's perspective. We are in a country of importers, 99 per cent of businessmen in Nigeria proudly tell you they are importers and they import everything, I mean everything, even to apples. These market women who sell yams, fishes and tomatoes eat apples, they also buy toothpicks to pick their teeth after eating the apples and chickens and turkey (all import goods). Now, we have a situation where everyone is claiming the astronomical rise in dollar has greatly affected their import businesses and as such, prices of these goods have gone up. What then do you expect the yam and fish seller to do?

“After selling her yams, she will not eat the monies made from the sales, she will also buy stuff she does not sell, and the prices of this stuff have gone up. So she will naturally increase the prices of her yams so as to be able to survive the situation. On the flip side, there are a lot of unpatriotic people who also are capitalising on the rise of the dollar to hike the prices of anything they are selling, but the bottom line is, let government work harder to regularise the situation. I strongly believe President Buhari will do what he has to do, we all know that we are suffering the effect of the rape of our economy by the immediate past government and because Buhari is not the kind of president that will lie and do some stupid things to cover up the ugly situation momentarily, so the effect is hitting us hard while he is working harder, to find a lasting situation to the issue.
Justin Akpovi-Asade

On her part, a top government official Kande Daniel rationalised it further, when she said that, “the market women and traders say they have to pay for goods and services like everyone else, from their own income. Their purchasing power is almost completely eroded if they sell their own goods at normal prices. That’s their usual line of argument. Though justifying what they say, is a different ball game in real life situation.”

A mother and a businesswoman Hannah Ezekiel believe that these market women know what they are doing. It may not sound too logical from the look of it on the surface, but they know what they are doing. Hannah Ezekiel added that, “I wonder why they have suddenly increased the prices but, they know what they are doing. They may not have gone to school like that, but experience has taught them how it works. Don’t be surprise that they could know more about the dollar than you do. These market women are sharp, don’t underestimate them.”

On the comical side, Olatunde Akinbola Babalola concluded the matter by saying, “The tray they use for the display of their consumable products is imported! Which means they need the dollar to replace their trays?

Indeed all the arguments sounded like true economic balancing so to say, but we asked an economist Emmanuel Matthews, what could result to this kind of increase, especially when there are no increases in the cost of transportation or oil price increases. He had this to say: ‘there is really no direct correlation between the rise in dollar to local commodities. However, there is the possibility that some people especially traders in Nigeria, who are used to sharp practices, who will take advantage of a situation like we presently have in the country. Eventually, which is very unfortunate, if this kind of arbitrary increase in consumables continues, it will give rise to an increase in the cost of other domestically produced goods and even the imported ones in nearest future. So the best thing is for regulators to put a stop to such arbitrary increases.

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