The Central Bank of Nigeria (CBN) has issued a report warning of increasing financial strain on Nigerians, with many expected to rely on borrowing to cover rising expenses in the coming months. The report, detailed in the July 2024 Inflation Expectations Survey, indicated that household expenditures are likely to continue escalating through the remainder of 2024 and into early 2025.
The survey, which gathered responses from 1,600 businesses and 1,650 households across Nigeria, revealed that a significant number of Nigerian families might deplete their lifetime savings to meet financial obligations. The report found that 83.7% of respondents viewed the current level of inflation as high, with a perception index of -61.1 points. Businesses, with an index of -58.7 points, were slightly less pessimistic than households, which had an index of -63.3 points.
The CBN’s analysis showed that large businesses were particularly concerned about inflation, with a strong belief that the current rate is excessively high. Consumer confidence was found to be broadly pessimistic for the period ending in October and November 2024, with confidence indices of -21.8 and -9.1 points, respectively. This negative outlook was attributed to worsening economic conditions and declining family financial situations.
The report also highlighted that Nigerians anticipate rising inflation across various categories, including transportation, medical expenses, car purchases, house purchases, and rent. Changes in energy prices, exchange rates, and transportation costs were identified as the primary drivers of inflation in July 2024.
Overall, the CBN’s report emphasized the urgent need for measures to alleviate financial pressures, particularly through potential interest rate reductions to ease the burden on consumers and businesses alike.
By Ebubedike Ochu
