- By Precious Shopade
Rising costs of goods and services and the steep decline in the value of naira are forcing consumers to forego transactions, leading to decline in patronage.
A survey of micro and small businesses by The Nation showed that businesses were struggling with low sales and declining profitability, despite many cost-cutting measures by the operators.
The rising cost of goods and services have negatively impacted the economy with cost of living and inflation at record levels. Sectors like food, fuel and other essential items have been particularly affected.
Respondents, drawn from Ipaja-Ayobo area of Lagos State, said the impact of price hikes has been felt across the society affecting low income households, business and government.
Mrs Nike, a wear trader at Ipaja, said Nigerians were feeling the effects of the rising cost of goods and services.
According to her, low income individuals and households are disproportionately affected by rising price as they spend a larger proportion of their incomes on necessities such as food, housing and utilities.
“It has become harder for low income households to afford these essential items,” Nike said.
A jewelry store owner simply identified as Aishat said consumers might have been adjusting their consumption patterns by substituting more expensive goods with cheaper alternatives or reducing non-essential purchases altogether.
“This can impact businesses, especially those producing luxury goods or non-essential products, as demand decreases,” Aishat said.
According to Mrs Akintayo Taiwo, a trader at Ayobo, the reasons for the price increase include the devaluation of the naira and increase in global oil price.
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She noted that the increased financial burden on lower income groups could lead to further decline in standard of living.
Another respondent, Mrs Shopade, a distributor at Ashipa, said business owners have had to deal with higher production costs .
She explained that increase in the price of fuel has made it expensive for business owners to transport their goods to markets, thus the tendency to increase the prices of their goods.
“Even the government is facing challenges in managing the economy during this time,” Mrs Areola from Ayobo said.
Mrs Glory Oshibe, a trader at Bada, said it has been a challenging and tough situation for everyone, expressing hopes that ongoing efforts by governments will soon lead to improvement.
Respondents called on the government to implement measures to control prices and boost the economy through the use of monetary and fiscal policies.
According to respondents, government can use fiscal policies like adjusting taxes and subsidies to influence price levels and help mitigate the negative effects of price increase especially for vulnerable groups.
They noted that policymakers need to take into consideration the effects of their policies and put in place proactive measures to tackle these.
They called for appropriate measures to promote price stability, sustainable economic growth and equitable distribution of resources.