Forex & Impact Of Cost Of Living In Nigeria

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Living in a country where the Cost of living is always increasing rather than being stable or decreasing is actually frustrating. You can literally walk to a store and what you bought the previous day is worth 50% extra in price. Whenever you complain of the price spike the seller will always blame the foreign exchange.

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For years I wondered why foreign exchange has to be blamed for every price increase in the country. Imagine going to buy eggs, or water for water dispenser or you want to buy anything obviously produced in the country and they say the price increment is due to the devaluation of Naira to dollar. With my myopic economical point of view I always ask them to explain how eggs laid by their chickens had business with foreign exchange when they they didn’t import them. Infact why do general Nigerian products produced in Nigeria have to increase because of foreign exchange.

Well it dawned on me that everything is connected, Nigeria depends on import more than exports. Imported goods and service are as important as Nigerian products and service. I feel we Nigerians depend more on imported goods and service than the ones provided by the country. So when the influence of forex affects the imported ones its definitely going to affect the locally made ones.

For instance, 3 years ago, an egg cost 30 Naira, today an egg cost 100 Naira in my estate. Aside the fact that the price spike is outrageous, Nigerians are known for over enforcing price increase on their goods and services during inflation. But what I got to understand is that the egg doesn’t cost that much to make, but everyone starting a business is looking forward to making profit. The lady that sells these eggs doesn’t import her eggs right? Neither does she import her chickens, she rares them in her farm, but she consumes other products that depend on forex.

If the prices of what she consumes increases due to forex, that means she has to spend more money to purchase them right? When she spends more money buying stuff she uses that depends on forex, she will have to increase the price of her eggs to make up for losses she made while buying stuff she uses that depends on forex.

If a baker comes to buy these eggs and finds out that the cost of eggs has increased, this means that she has to spend more to bake the same amount of cakes. More cost of production but lesser profit, this influences the increase in cake price. The cycle goes on and on and on and it affects every part and the total cost of living in Nigeria.

Will The Country Ever Recover
Increase in Nigerian cost of living is one of the Nigerian greatest progressive attributes. No matter how hard you try to increase your income or stay ahead inflation, cost of living has been there and done that. Every year it’s the same, price spike and price increments are always on the rise. In my opinion, for the country to recover, there has to be an economical miracle and I don’t see that happening soon.

Earning in dollars doesn’t make you safe or puts you ahead inflation unfortunately. Because I have done the maths and to my understanding, earning in dollars just makes you a little bit better than an average Nigerian, earning in Naira. If inflation and cost of living is beating the ass of an average Nigerian earning in Naira by 500 score, inflation is just beating a dollar earner by 300. That’s what I see to be the difference, because we all still spend more, a dollar earner is just a step better than the average Nigerian naira earner.

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6 comments
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Those are some huge inflation levels. Especially looking at the the egg prices. That's insanity

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Lol, I don't even want to go into some areas. The inflation rate is outrageous

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The prices now is crazy....minimum wage cannot comfortable feed a small family.🥺

Really sad

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My heart goes out to the poor, I can’t help but wonder how they survive.

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this picture looks like Porto Alegre city centre. very old.... I know how it feels to live in a failed economy. here in Brazil prices triple every 10 years.

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