Naira scarcity to impact Valentine’s Day spending

Nigerians may find it difficult to spoil their loved ones with lavish gifts this Valentine’s Day as Naira scarcity bites harder on Nigerians and the economy.

The drawback is that Nigerians have recently had to deal with a significant cash deficit, making it challenging to build such a money cake at this moment.

Valentine’s Day is typically associated with giving, going to the movies, lighting red candles, going out to dinner, and having a little extra fun for lovers. It goes without saying that these activities demand significant financial outlays, which in turn have effects on the national economy.

This historic day, however, may be in jeopardy due to recent and underlying problems in the largest economy in Africa, including persistently high inflation and excessively prolonged cash shortages. We quickly review some of the issues that can prevent couples from overspending on Valentine’s Day.

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Nearly all Nigerians are familiar with inflation, one of the key macroeconomic concepts in fundamental economics. Every month, the consumer price index data, which is used to determine the monthly inflation rate, is made available by the National Bureau of Statistics (NBS).

Inflation has become a particularly hot economic topic in Nigeria due to the country’s ongoing rise in the cost of goods and services.

Due to the conflict in Ukraine and Russia, the global energy crisis, the depreciation of the local currency, and other factors, Nigeria’s inflation rate is currently at a nearly 17-year high standing at 21.34% in December 2022.

Prices for several prominent commodities and services have increased by over 100% year over year throughout the nation, significantly reducing the purchasing power of the populace. This is made worse by the fact that there haven’t been any genuinely profitable investments, which has lowered investor confidence nationwide.

READ ALSO: Nigeria stands to lose $18m GDP monthly over Naira scarcity, expert warns

Therefore, those who wish to shower their significant others with gifts on Valentine’s Day this year will have to pay more than they would have, say, last year.

The CBN’s hawkish stance, which led to the MPR being raised to a record-high 17.5%, portends the apex bank’s attempt to reduce surplus liquidity by restricting access to credit.

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Although some whose business requires a loan for sustainability will have to obtain it at a premium. A high-interest environment oftentimes means that people do not have as much money lying around for merriment.