- 11th May 2020
- Posted by: Hakeem
- Category: Economics
Nigerians incurred N40.20 trillion as household consumption expenditure in 2019. This is according to the Consumption Expenditure Pattern report published by the National Bureau of Statistics. In 2009, the last time the report was published, Nigerians spent N21.62 trillion on consumption expenditure.
The data covered the period from October 2018 to September 2019.
The 2019 expenditure pattern report, which measures Nigeria’s spending pattern in both food and non-food items, revealed that of the total, 56.65% of the household expenditure in 2019 was spent on food, with the balance of about 43.35 spent on non-food items.
According to the definition, Household consumption refers to the amount spent personally by all Nigerians to acquire goods and services within the country. The data is based on household consumption only and excludes consumptions from the private sector, government, and exports.
Food consumed outside the home, followed by transportation costs and starchy roots, tubers, and plantains were responsible for the largest proportion of household expenditure, representing a combined 24.16% for total household expenditure in 2019.
How Nigerians Spend
In no particular surprise, 56.65% of Nigeria’s consumption expenditure was on food items. Transportation was second highest on the spending list with N2.5 trillion while health and education come next with N2.46 trillion and N2.42 trillion respectively. Also interesting to note that Nigerians spend more on telecoms than on rent, fuel/electricity.
The spending pattern captured in this survey is indicative of Nigeria’s poverty rate which is over 80 million according to prior data published by the NBS.
Spending on Food
Nigerians spent a whopping N22.7 trillion on food between the period recorded for the survey. In clear evidence of Nigerians culinary preferences, skew more towards carbohydrates with Starchy Roots, Tubers, and Plantain dominating with about N2.5 trillion. Rice a major staple food item that the government has been looking to ban cost Nigerians about N1.9 trillion while vegetables cost N1.7 trillion.
Surprisingly, alcoholic drinks were bottom on the ladder for food and beverage items with just N150 billion. We understand this does not capture alcoholic drank in bars, pubs, hotels, functions, etc. It only covers was is consumed in the household.
Urban and Rural Nigeria
The data also cut across various states in the country as well as urban and rural Nigeria. For example, in Rural Nigeria, after food which takes on 61.3% of consumption, healthcare takes on another 7.3%. Transport and education is next with 5.59% and 4.7% respectively.
However, in Urban Nigeria, Food represents 51.5% of expenditure followed by Education and Transport with 7.5% and 7.38% respectively. Telecommunication, rent, fuel, and electricity all fall between 6% and 7%.
In terms of State, 12.6% of National Spending occurs in Lagos State while Oyo and Delta are next with 5.83% and 5.38% respectively.
In Nigeria’s economic capital, Lagos State, Lagosians spent about N2.4 trillion on food items representing 48% of total consumption expenditure while 52% was on non-food items, the only state with that record. Next was Transport, Rent and Telecoms with 10.5%, 8%, and 7.5% respectively.
What this means: This data is especially critical at understanding the consumption patterns of Nigerians. On the back of this data, it is obvious that Nigerians incur over 56% of their consumption expenditure on food items. Food and beverage businesses are one of the easiest to start and operate in Nigeria and there is a hungry population primed to consume it.
This data now show Nigerian only apportion 23% of their consumption expenditure to critical sectors such as telecoms, healthcare, electricity, entertainment. According to the report, poorer countries like Nigeria spend more on food while developed economies spend less.
For a developing country like Nigeria, the consumption pattern is skewed towards food i.e. food is higher than the non-food items. In most developed countries, it is the opposite, where the consumption pattern is skewed towards non-food items. The more developed a society becomes, the less it spends on food and the more it spends on nonfood items. Lagos is a clear indication of a state with an emerging economy. Lagos state’s expenditure on non-food items was more than its expenditure on food.