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As prices rise sharply, Nigerian small businesses struggle to survive | Food Issues

Lagos, Nigeria Every morning, Esther George gets up early to prepare cold rice and a large pot of beans, as well as yams and various other foods to reheat and sell to customers at a roadside table in Lagos.

Prior to the coronavirus epidemic, mothers of three children cut their monthly income from about 10,000 ($ 24.40) to 15,000 naira ($ 36.60), she said. But this year, it has fallen sharply, raising the monthly deficit between 30,000 ($ 73) and 40,000 naira ($ 97.40).

The reason – rising food prices.

“Once upon a time [the pandemic], we bought one derica [a local measurement named after a brand of tomatoes ] 300 naira beans ($ 0.73). We are now buying 600 ($ 1.50). The price of two is now the price of one, ”said George.

And they are eager to go up in the trees.

“What you are buying is 500 naira ($ 1.20) in the past, tomorrow it will be 550 ($ 1.34), the next day it will be 600 naira and so on,” he told Al Jazeera.

The annual decline in prices in Nigeria reached 16.3 per cent in September [Courtesy of Ope Adetayo]

The annual decline in prices in Nigeria reached 16.3 per cent in September. While this is low compared to 18 percent this year in March, high prices for food, oil and other commodities are forcing small business owners, forcing them to reduce production, fall into debt, or raise prices for consumers themselves. he also feels squeezed.

George tried to reduce the amount of money he spent by making less and left out other things in his diet – such as eggs. He sold ten beans on average a day, but reduced to five. And even if they could afford ten, they would not be able to afford the three-cylinder butane-propane gas cylinder needed to re-heat that amount – because fuel prices have tripled.

Global stress rates, local pain

George, like millions of small and medium-sized business owners in Nigeria – not to mention, around the world – had to endure and adapt to the arrows and arrows of the disruptive COVID-19 epidemic.

Nigeria’s economy fell 1.8 percent in 2020 – the lowest since 1983 – and is expected to grow by 2.5 percent this year, according to the International Monetary Fund.

One pull in growth is the rise in prices. When countries abandon viral restrictions, manufacturing products do not keep pace with demand, leading to higher prices for food, oil, and other commodities.

Food prices around the world a ten-year hit last month, according to the United Nations.

Nigeria also has local resources that add to the global pain crisis.

“Weak resources such as insecurity have affected the economy and contributed to rising prices, because, for example, farmers are unable to go to farms because they are scared,” said Sheriffdeen Tella, a professor of economics at Olabisi Onabanjo University.

A common sight at the food market in Lagos, Nigeria on March 30, 2020 [File: Temilade Adelaja/Reuters]

Tella told Al Jazeera that monetary policy and the management of the currency exchange system have contributed significantly to the financial crisis in Nigeria.

“The economic situation also includes the exchange of money. First, the Central Bank cut its currency, which in turn led to higher inflation. And a lot of things depend on the value of money because it depends on the outside world, ” he said.

All this makes it a very difficult time for small and medium enterprises which account for 96 per cent of businesses in Nigeria and 84 per cent of jobs.

In addition, paying high prices to consumers is risky because it can force customers to move their business elsewhere or simply give up.

“If fear is something that people can do without, it will be difficult to transfer money to consumers,” Tella said.

That fear is expressed by Oluwaseun Kareem, who runs a printing shop in Lagos.

Back in June, when a paper bill cost 5,100 naira ($ 12.4), he obtained a contract to provide monthly textbooks at a fixed price. By October, the price of paper had risen to 7,000 naira ($ 17) – a loss of profits.

” I went to school and told them that I could not continue my work because of the cost. To continue that work, it means that all the profits I can get will be spent [buying] paper, “the 41-year-old told Al Jazeera.

Kareem said the school understood his condition and agreed to suspend the contract until further notice. But he is not the only business lost.

He says: “I have missed out on many opportunities. “When you came in did you see me doing anything? I fall asleep. The people I work with are unprepared [to pay the new prices]. ”

Official inflation, real market

Although September inflation rates were not as low as in March, Tolulope Afolayan, a business analyst, is skeptical of government figures.

“Market facts show evidence against the numbers being displayed,” he told Al Jazeera. “I don’t think the numbers we use to measure our wealth are unreliable.”

Rising prices have also created uncertainty in small businesses, he said, making it difficult for them to effectively drive inflation and continue.

“It’s not uncommon for business owners to be able to predict what their business will be like in the next six months, which is very important for business,” he said. “A bag of beans, for example, sells for 100,000 naira at a time. I don’t think that six months ago, every bean seller saw that or knew it was possible.”

Although George hopes that things will work out for him and other small business owners, he has no choice but to give up his experience, and work as hard as he can.

“I didn’t stop the business because the other way around?” he said. “There’s nothing I can do.”




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