By Okafor Joseph Afam | December 17, 2024

For millions of Nigerian households, the festive season comes at a time when inflationary pressures are tightening their grip, leaving many unable to afford even the most basic staples. Rice, a key feature of Christmas meals, has become a luxury item, further straining the budgets of already cash-strapped citizens.

According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate rose to 34.6 percent in November 2024, up from 33.88 percent in October. Food inflation climbed sharply to 39.93 percent compared to 32.84 percent recorded a year earlier.

The price of a 50kg bag of local parboiled rice now averages N100,000, marking a 66 percent increase from N60,000 in December 2023, according to a BusinessDay market survey. This price hike comes against the backdrop of Nigeria’s minimum wage of N70,000—less than $50 per month—exacerbating a cost-of-living crisis for the majority.

“How do I afford a bag of rice for N100,000 when I earn only N100,000? What will I have left to feed my children and for our upkeep?” Bola Ademosu, a teacher at Ketu Market in Lagos, lamented. “We have been managing, but how far can we go with prices surging like this?”

Rice, a symbol of celebration and sustenance for millions of Nigerian families, is now priced beyond the reach of many. Jollof rice—a staple at Christmas celebrations—costs 5.1 percent more this year. According to the Jollof Index report, preparing a pot of the delicacy for a family of five now costs N21,300, leaving many households in despair.

The Pain of Cash Scarcity

While battling soaring prices, Nigerians are also grappling with a worsening cash shortage. Despite efforts by the Central Bank of Nigeria (CBN) to increase currency circulation, the demand for cash during the festive season remains unmet, leaving citizens stranded at banks and Point of Sale (PoS) outlets.

“I now look for vendors that accept bank transfers because getting cash has been nearly impossible,” Tayo Odebulu, a staff member of the National Hospital, told BusinessDay.

Usman, a PoS operator in Abuja’s Central Business Area, echoed her frustrations: “I couldn’t open my business for days because banks are unwilling to disburse cash. I was only able to withdraw N20,000, which is not enough to run my operations. I’ve had to increase my charges; if you want N5,000, you’ll pay N300 as a fee.”

A senior bank official, who spoke on condition of anonymity, admitted that even banks are struggling to meet customer demands: “There’s simply not enough cash available. We’re hopeful this will be resolved soon, but for now, we’re in a tight spot.”

Festive Season Strain

Financial experts attribute the spike in cash demand to the yuletide season, during which economic activities naturally surge. Ayokunle Olubunmi, head of financial institution ratings at Agusto Consulting, explained that the festive period often brings increased transactions as Nigerians spend on travel, gifts, and food preparations.

However, Olubunmi noted that the CBN’s cost-cutting measures—such as reduced currency printing—and its drive toward a cashless economy have contributed to the shortage. “The CBN is actively promoting electronic payment channels to reduce reliance on physical cash, but it has not yet met the realities of Nigeria’s predominantly cash-based economy,” he said.

Ayodeji Ebo, managing director at Optimus by Afrinvest, agreed that the increased demand for cash during the holidays is expected. However, he highlighted a shift toward PoS terminals for withdrawals, noting their growing popularity due to convenience, albeit with higher fees.

Looking Ahead

As Christmas nears, the confluence of skyrocketing food prices and persistent cash shortages paints a bleak picture for Nigerian families. Experts stress the urgent need for the government to address inflationary pressures, while balancing efforts to transition toward a cashless economy.

For now, many Nigerians are bracing for a subdued celebration—struggling to put rice on the table, let alone partake