In a typical recession, the demand for goods should decline due to low purchasing power. Consequently, the supply of commodities should be disproportionate... Leading to a glut. If we follow the basic law of demand and supply in economics, the prices of most items (especially those unrelated to forex fluctuations) should fall. But this is not happening right now in Nigeria. Everything is going up up up, including things produced in our backyards. Worse still, purchasing power is at an all time low as incomes have stagnated or even reduced since 2015.

How would you explain this unprecedented phenomenon of stagflation in Nigeria's current economic crisis? Is what we are facing far worse than a recession?

I keep telling people that this is not a proper recession.

But it happens this way in Nigeria because we are not producing anything so all things are tied to the availability of dollars to import the things we need.

In normal recession, stuff like farm produce would be wasting at low prices cos of no money

You are making sense ... cash supply is dwindling yet prices of goods are going up even when demand for a lot of good have fallen

that is why Nigeria is a unique country... where the impossible becomes possible. Basic economic theories/principles has never worked in Nigeria. Eg basic economic theories states That's inflation and unemployment moves in opposite direction. it even goes ahead to recognize that a situation where they both move in the same direction is called Stagflation but stresses that this situation does not exit in reality. but Nigeria has successful proven the miracle is possible

Shouldn't this be a front page topic, Seun, lalasticlala, mods? Does one have to 'lobby' for everything in Naija?

Very confused too

But I think the inflation on things we produce in Nigeria are mostly artificial. Foreign products are understandable.

My own theory:
The lesser the transactions available the more profit people seek for the few transaction they can perform thus driving commodity price up . . .
There is also the dollar angle. Even local produce are not exempted from the dollar influence. Petrol for transportation of goods is tied to dollar cos we import it, fertilizer too, insecticides too . . .

The simple reasons why Nigeria is prone to stagflation is easy to see. None of the structural issues with Nigerian economy have been fixed. The oil still imported since refineries aren't good. The manufactured goods are imported since Nigeris is yet to fix power sector. The inflation is high because of lack of forex coming into country which effected most oil dominated economies.