Consumption spending in Nigeria increased to N57.08 trillion in the first half of 2022 due to rising inflation. According to the National Bureau of Statistics’ “Nigerian Gross Domestic Product Report (Expenditure and Income Approach)” report, this is a 14.39% increase over the N49.89tn that was spent during the same time of 2021.
Household final consumption expenditure was defined by the NBS as “imputed expenditure” that resident households incurred on their own personal consumption of goods and services. A residual is calculated for this. The agency further disclosed that household final consumption grew by 6.94 per cent and 17.64 per cent in Q1 and Q2 2022 respectively, on a year-on-year basis, in real terms.
It stated that the growth rates were lower compared to those of the corresponding quarters of 2021, which recorded 47.16 per cent and 42.40 per cent respectively.
It said, “The observed trend since 2020 indicates that real household consumption expenditure declined in Q1 and Q2 accounting for negative growth rates informed by the COVID-19 pandemic.
“However, positive growth rates were recorded in Q3 and Q4 of 2020 as well as the four quarters of 2021. As the economy recovers from the shock of the pandemic, Q1 and Q2 2022 growth rates have shown lower rates relative to the corresponding quarters of 2021.
“On a quarter-on-quarter basis, real household consumption expenditure grew by -8.50 per cent in Q1, and 2.32 per cent in Q2 2022. In nominal terms, household final consumption expenditure grew by 8.14 per cent in Q1, and 20.99 per cent in Q2 2022.”
According to the NBS, household consumption made up 76.79% of real GDP at market prices in Q1 2022 and 78.99% in Q2 2022, leaving little room for investments and other expenditures.
The amount of money spent by households on final consumption, such as food, clothes, housing (rent), energy, transportation, durable goods, health expenditures, leisure, and other services, is referred to as household spending, according to the Organization for Economic Cooperation and Development.
It also said that it represented around 60% of GDP and was a crucial element for demand analysis in economics. From January 2021 to June 2022, headline inflation increased from 16.47 percent to 18.60 percent. Up much more, to 18.60 per cent in September 2022
In its September inflation report, the NBS stated that the disruption in the supply of food products, increase in import cost due to the persistent currency depreciation, and the general increase in the cost of production were driving higher prices for goods and services.
