Anthonia Ani looks forward to July with expectation. It is around the time that secondary schools in the Kwamba local government of Niger State hold ceremonies for graduating students, and her small store, offering food items needed to prepare the day’s ‘Item 7,’ was a popular destination for them, some of whom had become ‘regular customers’.
Ani’s goods are part of the many goods loaded onto trucks that leave Onitsha’s main market, a sprawling square where everything from textiles, electronics, cosmetics, to food items is traded. From there, goods snake their way through the country, feeding small shops like hers.
“It’s the peak season of our business,” said Ani, who runs the shop with her husband. But this year was disappointing. She told BusinessDay that she didn’t experience sales as usual, as schools and other consumers cut down on spending to save costs.
“Anybody coming now will say that they just have to manage what they have,” she said. “In fact, they are not inviting parents for the graduations anymore, they want only the graduates. The amount of spices and the condiments they bought compared to what they need has dropped.”
Ani’s experience is not isolated and rather reflective of a cautious population who, with rising prices and limited income, realise they can no longer afford what they used to, and now seldom visit the market.
The output of Nigeria’s trade sector is on a downward slope for the third straight quarter, according to the latest GDP figures released by the National Bureau of Statistics. And compared to last year, it experienced a slowdown in the first half.
Output dropped from 2.04 per cent between September and December 2024 to 1.78 per cent in the first quarter of 2025. By the second quarter, it headed downwards once more to a 1.29 per cent growth.
The sector’s GDP growth in the first half of the year dropped by 0.53 per cent compared to last year, stunting its contribution to total GDP.
Experts say low consumer purchasing power, influenced by double-digit inflation, has discouraged big purchases from micro, small, and medium enterprises (MSMEs)—which make up per percentage of Nigerian businesses.
“We have weak consumer demand at the moment,” said Femi Egbesola, president of the Association of Small Business Owners Association of Nigeria (ASBON). “Even though data shows there’s a form of stability, inflation (rate currently at 20.12) is still very high compared to other nations. And because inflation is high, the take-home of an average worker is low in terms of purchasing power.”
He said that people now buy less than they used to and concentrate on basic needs. “And for that reason, the trade would definitely slow down because the demand slows down.”
Read also: Nigeria’s trade strengthens in H1 2025 from economic recovery
Victoria Babalola, a Lagosian, is one of those people who have watched their purchasing power slip despite earning three times the country’s minimum monthly wage of N70,000, a salary which many Nigerians, especially in the informal sector, still earn below.
Her salary has not changed, but food prices have.
“Foodstuffs are more expensive now compared to last year,” she told BusinessDay. “The money you used to buy one kilo of chicken one year ago might only buy you half a kilo now.” A bowl of custard, which she enjoys, now costs 100 per cent more than it did a year ago. Her appetite has had to adjust to the times. “I don’t even order out anymore,” she said.
She now spends with caution, leaving just enough money in the bank in case of rainy days. “If life throws you lemons, you want to quickly make lemonade,” she said.
Adeleke, like Babalola, considers himself a victim of the economy. A family man who leaves home to guard gates in Lekki, one of Lagos’s wealthy neighbourhoods, for a little over the minimum wage, he regrets not being able to buy as much as he could.
“Before, I can buy one bag of rice. Now it’s very expensive, so I will just buy half bag. It’s not easy oh,” he told BusinessDay.
Low demand means traders are being forced to drop prices of their products to encourage patronage, squeezing their profit margins thin with little left to compensate for operational costs.
The journey from Onitsha comes with layers of added cost, including port charges and clearing fees in Lagos, where the goods sit for a week, incurring demurrage. This comes with haulage costs, which have surged with rising diesel and petrol prices.
Bad roads also increase travel time, truck maintenance, and the risk of goods being damaged or spoiled.
“Transportation alone takes a greater part of what one can gain from the goods,” Ani said. She told BusinessDay that even when food prices come down, her prices must remain up or else she runs into a loss.
As many businesses require adequate power to survive, many shops around here resorted to buying small fuel-powered generators to run their businesses, due to the unsustainable power supplied from the national grid, which comes with high electricity bills.
“They say they prefer to buy the fuel at that high rate, than to be paid money for what they will not even make any profit out of it.”
Despite the band system introduced by the government to regulate tariffs, many of the vendors do not even know what band they are on or how much electricity they use, she confirmed. They are simply charged intermittently based on the size of their shops.
As for Ani, there are no more lights in her shop, not from the national grid or from a mobile generator. “I don’t need it,” she claimed.
Egbesola pointed to how a cocktail of barriers, including high costs of importations, borrowing costs and currency devaluation, leaves many businesses in a tight place
He said they are now seeking locally sourced raw materials to replace those from the expensive port.s
“They are also doing backward integration, and you know when we do less import, definitely trade will shrink,” he said.
While the Central Bank insists that liquidity has improved, businesses say access is still limited and unpredictable. “Scarcity is still there, and you know when there’s scarcity, organisations, particularly manufacturing companies, will not be able to import in their raw materials, their equipment, as they should, and when that happens, their production will slow down.”