Effects of rising Nigerian costs on the real estate industry

Nigeria, the largest economy in Africa with nearly 210 million people and known as the “poverty capital of the world” since 2016, has continued to experience unprecedented increases in the costs of goods and services.

It is a major cause for concern, particularly when public goods and the essential requirements of life become prohibitively expensive for the typical Nigerian. Food, housing, clothing, high-quality education, energy, and even health care that was ostensibly meant to be affordable have seen significant price increases in recent years. This trend is expected to continue.

Notably, a country with more than 42 percent of the population is now below the poverty line of $1.9 a day when other variables like unemployment and income inequality have risen. This country has 91 million people living in poverty.

The strike launched by (ASUU) the Union of Academic Staff of Universities represents a significant danger for education at the tertiary level; at the secondary and primary levels, they address the problem of kidnapping schoolchildren in various parts of the country.

However, the healthcare industry is plagued by a never-ending exodus of talented workers, inadequate funding, and total welfare for specialists. Other serious problems that require quick solutions are inflation and the instability of the naira in international markets, the crisis of fuel subsidies and the increase in the cost of energy.

Although there has been no adjustment to the minimum wage for workers, financial analysts are concerned about the inexplicable and absurd increase in the costs of products and services in all areas of the economy.

There are few excuses for rising prices of goods and services around the world, which is not unique to Nigeria. This is mainly due to the COVID-19 outbreak, which has resulted in a contraction of the global economy and the disruption of supply chains. Despite this, it is not enough to justify the high increase in Nigeria’s overall cost of living that has occurred in recent years. As a result of increasing rates of famine, disease, and misery, the economy can no longer maintain itself at its current level.

Due to the lowering of a quota implemented by the OPEC countries and the conflict in Ukraine and Russia, the increase in oil prices in the global market is denying Nigeria potential economic returns. This is contributing significantly to the financial woes of an import-dependent economy.

The financial problems of the typical Nigerian seem to be exacerbated by all these hardships, and there is currently no sign of an end in sight. People allocate a part of their discretionary resources, which are already dwindling, to the provision of services in the areas of health, education and security by private companies. The economic well-being of the typical Nigerian is already at risk and there is no clear path for the development of the country.

There is vacant real estate on the market that is currently for sale; however, there are very few buyers interested in acquiring these properties due to the high prices. This is especially problematic when you consider the fact that federal home loan initiatives are almost non-existent or do not work effectively.

Long lines at gas stations, coupled with unregulated rates and meters charged by unscrupulous marketers, have caused the temporary closure of companies whose survival depends mainly on the availability of fuel.

The price of a one-hour domestic flight ticket has risen by 100 percent to N50,000 as a result of a 300 percent increase in the price of aviation fuel from N170 to N550. This is yet another catastrophic event as it means that for the vast majority of Nigerians, this amount is almost double the minimum wage, which is N30,000.

The justifications offered for these excessive price increases on products and services are often completely unfounded and frivolous, and lack the pragmatism necessary to support such a significant increase in costs.

Rising living expenses in Nigeria will increase the prevalence of hunger, malnutrition and violent crime. The rate of population increase is about 2.5 percent per year, which is a high-level but unmanageable growth rate for a failing economy.

The Nigerian economy does not adhere to conventional economic principles. Regardless of how market forces interact with each other, there is never a decrease in the price of products and services.

There is hardly a price stabilization board to safeguard customers, monitor or control the excessive increase in the price of goods and services throughout the economy. This makes it difficult to maintain price stability. Exchange rate fluctuations, post-COVID-19 recovery measures, the Ukraine-Russia war, rising levels of insecurity and rising transport costs in Nigeria are expected to contribute to further increases in inflation .

A country that already has the largest number of people living in poverty in the world has become economically unsustainable. If the leadership and policy makers cannot meet the urgent needs of the overwhelming majority of Nigerians, it would rather make more Nigerians miserable and live in extreme poverty.