Household demand for basic foodstuffs in a recessed economy: a case study of Southwest Nigeria

Abstract

Purpose The economic recession that Nigeria recently passed through caused distortions in economic and well-being of Nigerians. The purpose of this paper is to examine the effects of the economic recession on households’ demand for basic foodstuffs in Southwest Nigeria. Design/methodology/approach Data were collected from 380 respondents drawn from urban areas of Lagos, Osun and Oyo states using multistage sampling technique. Descriptive statistics and Quadratic Almost Ideal Demand System were employed to analyze data collected. Findings The study showed sharp increase in the prices of basic foodstuffs during recession. Households were compelled to spend higher percentage of their monthly income on basic foodstuffs. Also, 51.1 percent of the respondents were government workers who experienced inconsistent or modulated monthly salary during the period. The percentage of households that were food insecure was 36.4 percent. Osun State had the highest monthly per capita expenditure (₦5,147.13) on foodstuffs, followed by Lagos and Oyo states while rice had the highest expenditure share (0.26), followed by yam (0.18), beans (0.106), vegetable oil (0.104) and garri (0.101). The breakdown also showed that 11.7, 18.1 and 17.7 percent of the total household monthly expenditures in Lagos, Osun and Oyo states, respectively, were spent on basic foodstuffs. Research limitations/implications There purchasing power of naira reduced significantly during recession, thus compelled households to spend more on basic foodstuffs compared to similar purchases before economic recession. Practical implications The reduction in purchasing power of naira affected the formal and informal sector. Irregular salary for civil servants reduced their expenditure on goods and services. Originality/value The study is original and topical, serving as literature of accounts that transpired among the households as far as demand for basic foodstuffs is concerned during the economic recession.