A loaf of bread that cost N200 in 2009 now goes for N500 in 2021.
A used Toyota Corolla that cost N650k in 2011 now goes for N2.5m in 2021.
These and other horror stories are the real-life implications from the newly released Consumer Price Index (CPI) from SBM Intelligence that shows that since January 2009, the CPI measured for all items has flown up by 4.25x.
There’s a Josy Ajiboye cartoon from 1984 that has been floating around social media and it showed Nigerians complaining to the then military dictator Muhammadu Buhari about the price of bread rising from 10 Kobo to 70 Kobo despite his promises to bring about an improvement.
Well, if nothing else, at least we know there’s precedent for a Buhari Presidency bringing about spectacular increases in inflation and food price inflation in particular.
The loaf of bread that cost 70 Kobo in Buhari’s first spell as Head of the Nigerian Government now costs N150.
A 1000% increase takes 70 Kobo to N7.
A 10,000% increase takes 70 Kobo to N70.
A 50,000% increase is what took the 70 Kobo loaf of bread to N150.
In 2020, UK inflation was 0.7%.
Nigeria’s inflation rate is 14.23%.
Nigeria had an inflation rate 2000% higher than the UK’s
A 50,000% inflation rate spike destroys the real value of capital, income, and savings.
People find it harder to give themselves and their families food, healthcare, education, security, and shelter.
The damaging outcomes of this poverty trigger a vicious cycle of insecurity, low productivity, and crime that affects investment and spending and makes for even more poverty.
It corrodes an economy and the real-life manifestations are largely responsible for the mayhem we see in Nigeria today.
An economic environment that decimates Capital to this extent encourages capital flight and this applies even to technical capital which is why a lot of the Middle-Class is increasingly liquidating its assets and investing in migration to economies that can protect and enhance the value of their human capital.
They are transferring their financial and technical resource to economies that can at least keep the value stable.
Nigerians must have been irate when the price of bread rose to 70 Kobo. What we face today with bread of inferior quality being sold for N150 should be proof that things could get a lot worse. At some point, the Buhari Administration is going to have to stop acting like its primary purpose is to see if people can actually starve to death and take the steps needed to right these wrongs and take Nigeria up into a better economic situation.