In the first half of 2022, Nigerians’ consumer spending increased to N57.08 trillion due to rising inflation. According to the National Bureau of Statistics’ ‘Nigerian Gross Domestic Product Report (Expenditure and Income Approach),’ this is a 14.39 percent increase over the N49.89tn spent in the same time in 2021.
The National Bureau of Statistics (NBS) defined household final consumption expenditure as “imputed expenditure incurred by resident households on individual consuming items and services.” This is known as a residue.”
The agency also revealed that, in real terms, household final consumption increased by 6.94% and 17.64% in the first and second quarters of 2022, respectively. It stated that the growth rates were lower compared to those of the corresponding quarters of 2021, which recorded 47.16 per cent and 42.40 per cent respectively.
It said, “The observed trend since 2020 indicates that real household consumption expenditure declined in Q1 and Q2 accounting for negative growth rates informed by the COVID-19 pandemic.
“However, positive growth rates were recorded in Q3 and Q4 of 2020 as well as the four quarters of 2021. As the economy recovers from the shock of the pandemic, Q1 and Q2 2022 growth rates have shown lower rates relative to the corresponding quarters of 2021.
“On a quarter-on-quarter basis, real household consumption expenditure grew by -8.50 per cent in Q1, and 2.32 per cent in Q2 2022. In nominal terms, household final consumption expenditure grew by 8.14 per cent in Q1, and 20.99 per cent in Q2 2022.”
The NBS stated in its report that household consumption accounted for 76.79% of real GDP at market prices in Q1 2022, and 78.99% in Q2 2022, leaving little room for investments and other activities.
Household spending was defined by the Organization for Economic Cooperation and Development as the amount of final consumption expenditure made by households to meet their everyday needs such as food, clothing, housing (rent), energy, transportation, durable goods, health costs, leisure, and miscellaneous services.
It went on to say that it accounted for around 60% of GDP and was an essential element in economic demand analysis.
Since 2021, headline inflation has risen from 16.47% in January 2021 to 18.60% in June 2022. It increased to 18.60 percent.
In its September inflation report, the NBS stated that the disruption in the supply of food products, increase in import cost due to the persistent currency depreciation, and the general increase in the cost of production were driving higher prices for goods and services.
