Nigeria: H1 2023 household spending hits N61.07 trillion amid inflation rise-NBS

In the initial half of 2023, household consumption in Nigeria amounted to N61.07 trillion, as reported by the National Bureau of Statistics.

Amid ongoing double-digit inflation, household consumption in the first half of 2023 increased by 2.83%, reaching N61.07 trillion a rise of N1.68 trillion compared to the N59.39 trillion recorded during the corresponding period in 2022.

The National Bureau of Statistics revealed these findings in its latest report on Expenditure and Income Gross Domestic Product (GDP).

As outlined in the report, the largest portion of GDP expenditure was attributed to household consumption. This category encompasses the imputed expenditure made by resident households on individual consumption goods and services.

In Q1 and Q2 of 2023, Household Consumption Expenditure experienced year-on-year growth rates of -24.95% and 3.30%, respectively, in real terms. These rates were lower than Q1 of 2022 but higher than Q2 of 2022. Notably, Household Consumption constituted the largest share of real Gross Domestic Product at market prices, accounting for 57.18% and 64.05% in Q1 and Q2 of 2023, in contrast to 78.02% and 63.65% during the corresponding quarters in 2022.

The report highlights a discernible pattern since 2020, where real household consumption expenditure faced declines in Q1 and Q2 of that year, reflecting negative growth rates due to the pandemic’s impact. Subsequently, positive growth rates were observed from Q3 of 2020 during the recovery phase. However, starting from Q2 of 2022 through Q1 of 2023, negative growth resurfaced, influenced by escalating prices, a cash crunch earlier in the year, and ongoing challenging economic conditions.

Moreover, there was a positive growth of 3.30% in Q2 of 2023, signaling a shift from the negative trend in the preceding quarter. The growth rates for Q1 and Q2 of 2023, while lower than the corresponding quarter of Q1 2022, were higher than Q2 of 2022. Examining a quarter-on-quarter basis, real household consumption expenditure declined by 20.29% in Q1 of 2023 but rebounded with a 11.68% increase in Q2 of 2023.

Quarter-on-quarter growth stood at -18.11% in Q1 of 2023 and 9.28% in Q2 of 2023, contrasting with the previous year’s figures of -2.59% and 2.95% in the corresponding quarters. Notably, Household Consumption constituted 57.18% of real GDP at market prices in Q1 of 2023 and rose to 64.05% in Q2 of 2023.

Due to persistent inflationary pressures, Nigerians are experiencing heightened costs for identical or in October, reflecting a 0.61% uptick from the previous month and marking a ten-month consecutive rise in inflation. Projections suggest that Nigeria is poised for continued economic instability in 2024, primarily attributed to the sustained double-digit inflation. The Central Bank of Nigeria (CBN) has indicated that prevailing inflationary pressures are likely to persist in the near future. According to the National Bureau of Statistics (NBS) Commodity Price Index report for October 2023, essential sectors contributing to the inflation surge include food and alcoholic beverages, housing, water, electricity, gas, and other fuel, along with clothing and footwear daily necessities for Nigerians.