Nigerians cut down on expenses, adjust feeding patterns and resort to prayers as economic situation worsens

 

Abuja, Nigeria. August 10th, 2016 – New public opinion poll released by NOIPolls in partnership with Business Day Media has revealed that about two-thirds of Nigerians (66 percent) have been lamenting the worsening state of their personal economic situation over the past three months. This they believe has been triggered by recent happenings in the macro and micro economic landscape, which have resulted into outcomes that have negatively impacted their personal economic wellbeing and living standard. Top on the list of some of such outcomes witnessed by Nigerians include: Increase in prices of goods and services (43 percent); Increase in petrol pump price (18 percent); Increase in the cost of transportation (10 percent); Devaluation and foreign exchange crisis (8 percent); Poor electricity supply (7 percent); Irregular payment of salaries (4 percent); Increase in electricity tariff (3percent). Clearly, these findings are corroborated by recent inflation figures released by the National Bureau of Statistics (NBS), which revealed that headline inflation in May 2016 shot up to 15.6 percent, with about 1.9 percentage points increase on the previous month’s reading of 13.7 per cent; also being the highest recorded in more than 6 years.[1]

From the poll results, 97 percent of the entire respondents acknowledge that these recent economic realities have had a negative effect of the general wellbeing of the average Nigerian. Consequently, this has led to the adoption of some coping strategies and measures by Nigerians to manage the impact of the current economic realities. Some of such strategies include: Cutting down on household expenses and luxury items; enduring the situation & seeking the face of God in prayers; adjusting family feeding patterns; creating alternative sources of income and engaging in subsistence agriculture, to mention a few.  

Finally, as remedies for improving their general wellbeing, Nigerians have suggested that the government focuses its attention on ‘improving the economy’ (33 percent), ‘investing in agriculture’ (15 percent), ‘controlling the price of goods and services’ (14 percent) and ‘reducing the pump price of petrol‘ (10 percent) amongst others. Remarkably, 4 percent of Nigerians believe that resolving the crisis in the Niger-Delta region would end the vandalisation of oil installations, sustain the country’s revenue from crude oil and help in reviving the economy; as well as improving the wellbeing of citizens. These were the key findings from a recent public opinion poll conducted on the economy by NOIPolls in partnership with Business Day Media. The poll was conducted in the week commencing July 25th 2016.

Brief Background

The uncertainties generated by the volatility in oil prices and the significant drop in government revenue, have affected the Nigerian economy. The Gross Domestic Product (GDP) in Nigeria contracted 13.70 percent in the first quarter of 2016 over the previous quarter. GDP Growth Rate in Nigeria averaged 0.30 percent from 2013 until 2016, reaching an all-time high of 9.19 percent in the third quarter of 2015 and a record low of -13.70 percent in the first quarter of 2016[2].

Consumer prices in Nigeria jumped 15.6 percent year-on-year in May of 2016, following a 13.7 percent rise in the previous month. It was the highest reading in more than 6 years, as cost of food, housing, utilities and transport surged mostly due to 67 percent increase in gasoline prices. Nigeria struggles with rising import cost due to a weak naira after lower oil prices led to a decline in foreign reserves and as oil production reached a historical low in May after Niger Delta Avengers attacked Chevron oil facilities. On a monthly basis, consumer prices went up 2.75 percent[3].

The government of President Muhammadu Buhari has on May 11, officially stopped the subsidy regime on premium motor spirit. The price of petrol is now sold at N145 per litre[4].  There have been many rumours that the naira should be devalued against the U.S. dollar and other major foreign currencies. Currently the currency is exchanged at 355 naira to 1 dollar[5]. With the fluctuating dollar rate, increased fuel price and the double digit inflation, life in Nigeria is anything but easy. Nigerians struggle to go through their daily activities as the salaries and wages they receive have not increased despite the rising food prices. Salaries are still being owed despite the bailout funds[6].

According to the National Bureau of Statistics, Nigeria recorded over 500,000 job losses in the first quarter of 2016 and this has led to reduced monthly income of many households[7]. Some of the perceived survival strategies Nigerians are adopting in order to cope with the economy includes; reduction in the quality of meals, withdrawal of children from expensive schools, trekking long distances to work and businesses, reduction in regular travels, patronizing second hand clothing, embracing subsistence farming and reduction in entertainment expenses[8]. These reduce the quality of life of Nigerians, while increasing the misery index. To buttress this point, there has been newspaper articles reporting the agony faced by Nigerians as they grapple day-to-day life.

One article in particular compiled some anecdotal evidences across the country, reporting that: there’s a growing army of dependent Nigerians, Nigerians are no longer the world’s happiest people, increase in the number of beggars in the streets[9], soup thieves are now on the prowl; incidents of parents offering their children as deposits and collateral; increase of emergency drivers; no imports, no jobs and no money; rising cost and scarcity of medication; increase in cases of liver infection; hospitals are becoming charity organisations; and increasing patronage of herbal homes & rising mortality rate amongst others[10].

Consequently, NOIPolls in partnership with Business Day Media conducted a new public opinion poll to access the perceptions of Nigerians regarding their current personal economic situation and coping strategies adopted to manage the economic situation, over the last three months.

Survey Findings

The poll revealed that about two-thirds of Nigerians (66 percent) stated that their current economic situation has worsened over the last three months. While 19 percent affirmed that it has improved, 15 percent reported that it has remained the same. These are reflective of the continued dissatisfaction of Nigerians regarding the state of the economy and their desire for an economic revival. Similarly, 83 percent acknowledged that they have observed some socio-economic activities that have affected their wellbeing while 17 percent stated otherwise.

Furthermore findings from the poll revealed that 43 percent said they’ve observed increase in prices of goods and services; closely followed by those who observed Increase in petrol pump price (18 percent). Other occurrences observed include: Increase in the cost of transportation (10 percent); Devaluation and foreign exchange crisis (8 percent); Poor electricity supply (7 percent); Irregular payment of salaries (4 percent); Increase in electricity tariff (3percent); Low patronage to businesses (2 percent); and Scarcity of petrol & kerosene (2 percent) amongst others.

In the same vein, an overwhelming majority (97 percent) claimed that the socio-economic occurrences mentioned above have affected them negatively. The poll also sought to ascertain the coping strategies and measures being adopted by Nigerians to manage the current economic realities. Interesting, 37 percent of the respondents revealed that they have ‘Cut down on household expenses & luxury items’; while 16 percent say they are ‘just enduring the situation and seeking the face of God in pray’. Also, 10 percent say they’ve had to ‘adjust their family feeding patterns’ suggesting a reduction in the quality and quantity of food they now consume. Other coping strategies mentioned include: ‘Creating alternative source of income’ (6 percent), ‘purchase of locally manufactured goods’ (6 percent) and ‘Engaging in subsistence agriculture’ amongst others. Amazingly, 14 percent of Nigerians ‘have not fashioned any strategy’ or measure to cope with these socio-economic events.

Finally, the poll sought the opinion of Nigerians on what government should be doing to improve the socio-economic wellbeing of Nigerians. The results revealed that Nigerians are of the opinion that the government should as a matter of urgency work hard to ‘improve the economy’ (33 percent), ‘invest massively in agriculture’ (15 percent)’, ‘control the price of goods and services’ (14 percent) and ‘reduce the pump price of petrol‘ (10 percent) and ‘pay workers salary arrears across the nation’ (10 percent) amongst others. Notably, analysis showed that 4 percent of Nigerians are of the opinion that the government should ‘resolve the crisis in the Niger-Delta’ sub-region in order to end the vandalisation of oil installations,  sustain the country’s revenue from crude oil and revive the economy; as well as improving the wellbeing of citizens. It is worth noting that we also found 14 percent of respondent who simply said they have done nothing to cope with the current economic realities.

In summary, over-reliance on crude oil and failing to save for the rainy days have been blamed for Nigeria’s current economic hardship. The federal government recently reported that its earnings had declined by 40 per cent as a result of the extreme drop in oil prices, as well as, the persistent attacks on oil installations in the Niger Delta.[11] Therefore, it is pertinent for policy makers to understand why 15 percent of Nigerians are recommending diversification in terms of investment in agriculture to create alternative revenue-generating bases. Also, 14 percent want the prices of goods and services to be controlled like in the days of price control boards; while 10 percent want the price of fuel to be reduced as the increase has proven to have a relative negative effect on prices of goods and services and cost of transportation amongst others.

In conclusion, the poll has shown that most Nigerians perceive their current wellbeing to have worsened within the last three months due to some socio-economic events that occurred with the period. However, economic downturn portends opportunities for repositioning and strengthening the economy for inclusive and sustainable growth. We welcome the government’s efforts at inviting some of the country’s leading economists for dialogue on how to move the economy forward. These are certainly times where all hands are required on deck. Researchers and pollsters are also needed to help the government in gathering primary data to better understand the situation of things, especially at the grassroots and also inform policy decisions.

Survey Methods

The opinion poll was conducted in the week commencing July 25th 2016. It involved telephone interviews of a random nationwide sample. 1,000 randomly selected phone-owning Nigerians aged 18 years and above, representing the six geopolitical zones in the country, were interviewed. With a sample of this size, we can say with 95% confidence that the results obtained are statistically precise - within a range of plus or minus 3%. NOIPolls Limited is the No1 for country specific polling services in West Africa. We conduct periodic opinion polls and studies on various socio-economic and political issues in Nigeria. More information is available at www.noi-polls.com

Disclaimer

This press release has been produced by NOIPolls Limited to provide information on all issues which form the subject matter of the document. Kindly note that while we are willing to share results from our polls with the general public, we only request that NOIPolls be acknowledged as author whenever and wherever our poll results are used, cited or published.

NOIPolls hereby certifies that all the views expressed in this document accurately reflect its views of respondents surveyed for the poll, and background information is based on information from various sources that it believes are reliable; however, no representation is made that it is accurate or complete. Whilst reasonable care has been taken in preparing this document, no responsibility or liability is accepted for errors or fact or for any views expressed herein by NOIPolls for actions taken as a result of information provided in this report. Any ratings, forecasts, estimates, opinions or views herein constitute a judgment as at the date of this document. If the date of this document is not current, the views and content may not reflect NOIPolls’ current findings and/or thinking.

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[1] http://www.vanguardngr.com/2016/06/nigeria-inflation-hits-6-yr-high-15-6/

[2]http://www.tradingeconomics.com/nigeria/gdp-growth

[3] http://www.tradingeconomics.com/nigeria/inflation-cpi

[4] http://www.vanguardngr.com/2016/05/fuel-price-hike-nigeria-wasted-n10trn-subsidy/

[5] http://www.iproject.com.ng/economics/final-year-project-topics/the-effect-of-exchange-rate-fluctuations-on-the-nigeria-economy-4974/project-topic

[6] http://dailypost.ng/2016/04/28/buhari-expresses-concern-over-inability-of-states-to-pay-salaries-despite-bailout/

[7]http://nigerianpilot.com/500000-nigerians-lose-jobs-3-months/

[8] http://www.mynewswatchtimesng.com/survival-strategies-of-nigerians-in-economic-depression/

[9] http://punchng.com/nigerians-groan-economy-bleeds-1/

[10] http://punchng.com/nigerians-groan-economy-bleeds-2/

[11] http://www.thisdaylive.com/index.php/2016/07/14/sgf-revenue-has-dropped-by-40-budget-will-be-partially-implemented/