THE UNITY BANK DIGEST – DECEMBER 22, 2022 (Re: High inflation pushes more Nigerians into poverty)

Dear Subscriber,

Ho! Ho! Hold on to your money, you can enjoy Christmas on a budget!

In three days, we’ll be celebrating Christmas, but before the jingle bells ring, our bank accounts usually sing with debit alerts. The festive season comes with a lot of spending on clothing, food, and travel. It can be overwhelming since there is often an expectation to create a picture-perfect Christmas filled with eye-catching attires, extravagant gifts, delicious food, and joyful family celebrations.

However, it doesn’t have to be the case, especially with the current economic quagmire and strangulation. If you don’t want January to feel like it’s sixty days long, you have to cut over-the-top festive spending and stick to a budget. In the lifestyle section of this digest, we show you just how well you can manage your expenses this Christmas to have an even better New Year.

Inflation will keep throwing darts at your income in Q1’23

Since February 2022, food and energy prices rose until headline inflation peaked at a 17-year high of 21.47% in November. The price of diesel is up 191% to N808/litre, while a 50kg bag of rice (N48,000) is 60% higher than the minimum wage of N30,000. What a year!

As wage/salary levels play catch up to the rise in inflation, consumer disposable income is quickly depleting and more people are falling below the poverty line. As of today, 93 million Nigerians are poor in monetary terms (meaning that they earn approximately N11,500 monthly). Not only that, 133 million Nigerians are living in multidimensional poverty. Unfortunately, this trend could be sustained in 2023, as the IMF predicts that inflation (average) will remain elevated at 17.32%.

You will spend new naira notes in 2023

As promised by the CBN, the redesigned naira notes are currently in circulation. While Nigerians have mixed feelings about the short time frame to exchange old notes, analysts are wary of the possible disruption to economic activities this exercise will have on the economy. This is because the unbanked, financially excluded and Nigeria’s large informal economy that employs 80% of the total population holds cash. Besides, the process is unlikely to mute inflationary pressure as cash in circulation contributes a minuscule 6.52% to the total money supply (N50.58 trillion).

In this edition of the Unity Bank Digest, we provide you a healthy dose of economic, lifestyle and entertainment stories to kick off your Christmas celebration.

Please enjoy your read!