Inflation eats away at Nigerians’ savings in commercial banks ahead of holiday shopping
- The pace at which the prices of goods and services are rising has reached a new high
- Latest data from the National Bureau of Statistics shows inflation figures hit their highest level in 17 years in September
- Rising inflation has severely eaten away at Nigerians’ savings in commercial banks ahead of holiday shopping
Nigerians are expecting a tougher festive season due to rising inflation, which has eroded their savings.
The National Bureau of Statistics announced on Tuesday, October 17, 2022 that Nigeria’s inflation rate rose to 20.77% in September.
The last time Nigeria’s headline inflation rate exceeded 20% was in 2005, 17 years ago.
How Inflation Affects Savings
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This means if a bank customer has N100 in a savings account paying 4.2% interest. The bank customer will have at least N104 in their account after one year.
However, with an inflation rate of 20.77%, a Nigerian would need at least N120 to have the same purchasing power.
Yes, a bank customer has made money, but inflation has reduced his purchasing power.
Indeed, you will lose money if your savings do not increase at the same rate as inflation.
An expert talks about the impact of the inflation rate
Financial experts fear that rising inflation rate in Nigeria will affect the standard of living of Nigerians.
According to Paul Alaje, Senior Economist at SPM Professionals, the high rate of inflation means that someone who had N100,000 at this time last year has less than N85,000 this year for no crime.
Mr. Alaje said that this situation may put several families at risk as some members may lose their jobs due to non-payment of their employees due to a drop in sales.
Furthermore, Ben Ekeyi, a public financial management consultant, said that Nigeria’s inflation rate has hurt the purchasing power of Nigerians in various ways.
Ekeyi noted that one of the impacts includes reduced ability to purchase necessary and required goods and services, especially when there has not been a corresponding increase in income.
States with highest food inflation in Nigeria
In another report Legit.ng revealed that food inflation remained the biggest inflationary spike in Nigeria.
According to reportNigerians were forced to increase their food budgets nationwide in September 2022.
Although the problem is widespread, some states have experienced the highest levels of inflation.