I was on my way back home today when I saw a woman hawking fried fish. She was wailing bitterly about the state of things in the country. Shortly before I saw her, I considered putting up a post on 'Inflation and the current state of the Nigerian economy' - when I saw and heard her, I figured it was time to write on this topic. (I'll be touching on a couple of economic terms in this series and I promise to break-it-down so we can all understand what's up presently in Nigeria).
Okay. Back to the woman. She looked like she was in her late 30s or early 40s. She carried a baby on her back. Just beside her was a young boy (about 6 years old) who was walking about with her as she hawked. She looked tired and stressed, but still kept on hawking, like her life depended on the day's sales. I looked at her, wishing I had the money to start her up in another business that will require less physical stress compared to what she was currently going through. A rough estimate of the total sales of the fish she hawked was about N700 (Seven hundred naira), and I imagined how she was going to live on that with 2 children (or more).
She represents the average Nigerian. If not in every way, in little variants here and there. (Think about it)
The question that comes quickly to my mind after this sight becomes: What does the current inflation rate mean for a woman like this?
To start with, Inflation is the persistent, continual and sustained increase in price of goods and services. This means things become more expensive such that I can only buy less with my naira. Take for example: I, Similoluwa entered University in 2010. As at this time (2010), higher education notebooks cost N100 each. I graduated in 2016, and now, the same higher education notebook costs N220. In 2010, I would have bought 2 books with N220 (at N100 each), and I would still have been left with N20 change. Inflation occurred over the years, and prices rose.
The value of the naira is defined by its purchasing power i.e. what you can do with your money determines its worth. Now, when there is inflation, there is a reduction in what you can actually do with your money. In other words, your money(naira in this case) loses worth.
Having defined Inflation, what then does an inflation rate say and what are the implications of an increase in rate for me as a Nigerian?
Join me in the next post for a continuation of this series.
Cheers to the freaking weekend.
Simex lori gangan. (Dad calls me this, still don't know what it means)
