Nigerians have grudgingly accepted a N10 to N20 increase in the price of pure water. Despite claims of falling inflation, no one expects the price to return to its pre-Covid price of N5.
A recent Nairametrics market survey reveals the price of a sachet of water, popularly known as “pure water” has risen from N10 to N20. This price doubling is likely to affect the majority of Nigerians, considering it is the most popular and convenient source of drinking water for most people in cities and villages who can’t afford bottled water.
The price increase persists despite Nigeria’s inflation rate falling for the second month in a row, to 17.93% in May 2021, down from 18.12% in April 2021. This drop has not been significant enough to alleviate inflationary pressures impacting the average Nigerian when a basic consumable such as pure water has doubled in price.
John Maynard Keynes was the first to create the idea of sticky prices, which states that as prices rise, it is difficult for them to fall. This notion is clear in Nigeria, where the price of pure water has risen from N5 to N10 and now N20. Regardless of inflationary trends, it is possible that prices will never revert to N5.
The country’s double digits inflationary trend is due to the Covid-19 pandemic, expanding foreign debt, currency scarcity and extreme insecurity issues. It has resulted in the increase in prices of consumer goods, and in the case of sachet (pure) water, a doubling of price.
Nairametrics spoke with a few key players in the market to obtain a better understanding of the situation.
What the producers are saying?
In a conversation with Cephas Kris, Operations Manager at Tabby-water, he stated that the rise in pure water prices is mostly due to the rising cost of raw materials and factory inputs in the manufacturing process.
“Prior to the lockdown, a kilogram of nylon cost N750, a packing bag cost N3000 per pack, and water cost N1000 per set. However, a kilogram of nylon now costs N1650, a packing bag N7000, and water N1500. The price of pure water climbed by more than 100 percent as the price of raw materials grew by more than 100 percent. Furthermore, the cost of maintaining machinery has skyrocketed…for example, engine oil which was once N4500 for 4liters and is now N9000,” he said.
Ogheneokokezi Daniel Efue, General Manager of Zeeno Global, also attributed the price increase to rising manufacturing variables, particularly personnel costs.
“The increase in the market prices of food and transportation caused agitation among pure water packagers, who began demanding an increase in their wages/per bag from N3-N4. Some water companies would pay up to N5 for each bag. Other water firms have threatened to close their operations, and some have actually done so due to business finance risks,” he said.
What the consumers are saying?
Elijah Chidiuto Onyemachi, a Lagos resident, postulated that price increase in pure water is a manifestation of the society’s poverty and misery.
“Poverty manifests itself in many ways, one of which is a lack of access to basic necessities. Water is one of these amenities, and such unfathomable rise reflects a manifestation of economic misery that spans all classes of society. I have to buy a full bag grudgingly. For N200, one complete bag contains 20pscs. Whereas N100 naira, which should be half a bag, only gets you 6 pieces,” he said.
Chioma Onyido, an Abuja resident, expressed shock about the hike in the price of pure water, claiming that it has considerably reduced her disposable income and made leaving the country a more preferable option.
“To be honest, the increase in pure water came as a surprise to me. How can the price of pure water double when I’m still battling to double my income? This, combined with other growing obstacles, has made leaving the country more appealing. Something as minor as a N10 increase can chew its way through my wallet. Now I pay N200 for a bag of water? It seems like only yesterday that pure water was sold for N5, and experience has shown us that this price will never fall. I’m tired of this country,” Onyibo said.
The way out…
Dr Jeremiah Ogaga Ejemeyovwi, lecturer and consultant at Covenant University, began by stating that addressing the primary source of inflation will be critical in lowering prices. He, however, stated that the decrease in inflation is insufficient to have a significant impact on the economy.
“The fundamental source of inflation is cost pull, which is exacerbated by import dependency. To overcome this problem, we must boost the economy by expanding exports, local factor input production, and diversification of various export structures in Nigeria. However, the recent fall in inflation is too tiny to have any real impact on the economy, and things will continue to be the same or worse until a real structural change occurs,” Ejemeyovwi said.
Article originally published here.