Consumption expenditure reaches N57tr, shoots up 14.39%
By Jeph Ajobaju, Chief Copy Editor
National consumption expenditure jumped 14.39 per cent from N49.89 trillion in the first half of the year to June 2021 (H1 2021) to N57.08 trillion in H1 2022, fuelled by rising inflation, according to the National Bureau of Statistics (NBS).
The NBS defines household final consumption expenditure is spending including “imputed expenditure, incurred by resident households on individual consumption goods and services. This is calculated as a residual.”
The Organisation for Economic Co-operation and Development (OECD) defines household spending as the amount of final consumption expenditure made by households to meet their everyday needs such as food, clothing, housing (rent), energy, transport, durable goods, health costs, leisure, and miscellaneous services.
OECD says this accounts for about 60 per cent of Gross Domestic Product (GDP) and is an important variable for economic analysis of demand.
Newly released NBS report on “Nigerian Gross Domestic Product Report (Expenditure and Income Approach” shows household consumption rose 6.94 per cent in real terms in the first quarter to March (Q1 2022) to 17.64 per cent in Q2.
The growth rates were lower against 47.16 per cent in Q1 2021 and 42.40 per cent in Q2 2021.
“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,” the report said.
“However, positive growth rates were recorded in Q3 and Q4 of 2020 as well as the four quarters of 2021.”
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Post pandemic recovery
“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,” the NBS added, according to reporting by The PUNCH.
“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.”
Household consumption accounted for 76.79 per cent of real GDP at market prices in Q1 2022, and 78.99 per cent in Q2 2022, leaving little for investments and others, according to the NBS.
Headline inflation rose from 16.47 per cent in January 2021 to 18.60 per cent in June 2022, and shot up to 18.60 per cent in September 2022.
The NBS explained in its September inflation report that the drivers of goods and services prices include disruption in the supply of food products, increase in import cost due to persistent currency depreciation, and general increase in production cost.
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