The dollar recently fell, exchanging for N470 in three days of trading at the parallel market. But to what extent has this change influenced prices of goods in the country?
In a store in Utako Market, Ahmed Kabir is surrounded by an assortment of jewellery, wristwatches, lip gloss, containers of face powder and a variety of other items. “Thank God, this week prices of some goods went down,” he says, adding that since they buy some of their products in dozens (such as lip gloss), they were able to get N200 off.
“Price of face powder rose last week by N1, 000, but has definitely gone down this week because we were selling per one last week (wholesale) at the rate of N600,” he explains, adding that they recently cut off a good amount because they were being supplied at a much cheaper rate.
“Foot scraper, which we bought this week, is perhaps the only product that has increased in price this week instead of reducing. But generally, most of my products have reduced in price,” Kabir points out. He adds that they are hoping prices will crash by April if the naira stabilises. “It doesn’t matter, even if it’s N400 to a dollar, based on our business, we don’t have a problem. Everything we have here is imported and foreign. I also sell eye shadows and lipsticks too. Even the beads we buy are foreign. They are only assembled in Nigeria,” he said. “Buying Nigerian-made beads is even more expensive than the foreign ones.”
But not every trader aligns with Kabir’s experience. Many claim there’s absolutely no change in price, with others hoping to quickly sell-off old stock before the naira appreciates further. One of those is Chidinma Okoro, a shoe seller who is already worried about how to sell her old stock. Sitting before a large number of brand new and fairly used shoes, she points out that there’s no way they can feel the effect of the increase in value of the naira. “It will take some months before we begin to feel the impact,” she says, adding that what she has presently in stock are foot wears she bought when the dollar was very high, so at the moment she is trying to see how she can sell them off before the fall in the dollar takes effect. “If not I will be at a disadvantage because my goods will be more expensive than those who are purchasing wholesale at the moment. I’m not even trying to make a profit, but just trying to get my money back because when I bought my shoes they were very expensive,” she explains.
Since the economic recession hit the country, more and more businesses have suffered and are barely able to stay afloat. Prices have soared and businessmen like Anayo Okoria who runs a building materials store continue to hope things will improve. But “nothing has changed yet, even as the naira has strengthened against the dollar,” he says, pointing out that the government doesn’t give dollars to the business people. “So when you go to the black market, you get dollars at over N500. Central Bank of Nigeria or the banks don’t give dollars; rather, when you take (dollars) to them they buy at government price.”
Okoria adds that the way the dollar has reduced in value against the naira, if it were the other way round foreign goods would have automatically doubled in price. “But since the dollar has come down, we wouldn’t see the effect right now till in about a month’s time. This is because the raw materials being bought are usually in dollars,” he says. So like many of his colleagues, he waits to see when the naira stabilises, perhaps gaining on the dollar for about two to three months, and then the effect will be felt, positvely. This is why most dealers who deal directly with manufacturing companies watch the market and don’t really by in stock, he informs.
A sales officer for a sugar manufacturing company, Gabriel Peter, also hasn’t noticed any visible impact the exchange rate has in his area of business so far. He agrees it’s too early and like many of his colleagues, waits to see the naira stabilise. For the moment, he is busy trying to sell old stock at the usual price. “People are still scared because it (naira) fluctuates easily. So many of us still have old stock,” he says and offers an example: “If my distributor bought 300 cartons of sugar last month at a particular price, of course she’s not going to sell below that presently. Until she buys afresh, then it will affect the price.”
Even Kalu Ejike’s fashion design business is yet to experience any change. Still trying to get on his feet, he buys linen, thread and several other items on a daily bases. Since linen rose from N100 to N150 in 2016, there hasn’t been any change in price, either up or down. But like some of those in his ilk, he remains hopeful that the naira will stand strong for a while.