In the last 3 months, the Nigerian consumer has been squeezed by a combination of the effect of policies, markets, and COVID. The reform policies have slashed aggregate disposable income by N1.73trn or 1.26% of total personal consumption (N136,031trn). We observed that its impact on the different classes of Nigerians is not identical. The multidimensionally poor are suffocating whilst survivors and the middle class are under excruciating financial pain. The elite and affluent are also under pressure. In all cases, there is short term pain that can be alleviated by government expenditure on infrastructure and palliatives.
However, government expenditure will be inadequate to save every Nigerian. It has to be complemented by increased investment, higher gross capital formation, and increased national savings. Nigeria’s investment to output ratio which is currently 17% of GDP will need to grow by 9.6% to N49,446bn by 2022. At this level, all classes of Nigerians will witness an uplift in their incomes and standard of living
In the slides, the FDC Think Tank discusses these issues and the impact on household income and consumption.
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