On the 29th of May 2023, President Bola Ahmed Tinubu announced the removal of petroleum subsidy. This meant that the government would stop paying the difference between the market price of petroleum and the pump price. i.e. the price it is sold to customers. Following the announcement, the price of petrol moved from N185 to N450+
Business owners have felt the impact of subsidy removal with the rapid increase in the cost of supplies, delivery charges, and power generation following in quick succession.
But with every major economic event, business owners have seemingly quietened and moved on with trademark Nigerian resilience. Today, we speak to 5 business owners about how they are truly navigating a challenging economy.
Wunmi- Online Fashion Store Owner
I am looking internally to cut costs
Business before the new President was fine I guess. I mean we still had issues. Now, delivery fees have skyrocketed. Deliveries used to be as low as N1000. Now the lowest is N1500 and that's if it is a short distance. Gokada is super high, from 3,000 to 8,000. For suppliers, everyone has increased their prices.
it's quite hard to increase my prices abruptly. I try to look internally to reduce costs like managing electricity. But for custom-made outfits, customers have had to pay more. For instance, an order for a birthday dress for a recent client moved from N20,000 to N45,000. We finally settled on N35,000.
Heritage - Foodstuff & Food products
I had to increase my prices and invest in packaging
I sell foodstuff in bulk and also in retail. People pick up from my house and place orders online through WhatsApp and Facebook. The cost of transportation has immediately impacted the cost of the foodstuff I buy. Sellers are adding transport costs to make a profit and I also have to add my own cost.
For instance, cow cheese used to be purchased at N600 to N800 from Ilorin. Now it is sold for N1200 and I sell it for N1500 instead of the previous price of N1000. Apart from increasing prices, I have invested in my packaging to attract more customers. I have also added variety to products by adding spicy and non-spicy variants of products.
Ayomide- Gadgets and Accessories
I have started bundling deliveries
The major change post-subsidy has been the cost of logistics and getting new products. Before subsidy removal, people could order products from anywhere and send a dispatch rider to pick them up. Now they are going to shops that are closer to them. We also offer phone repairs and that has also reduced.
I think that things will continue to pick up with people realising that it is what it is. Some of our customers have gone to other people close to them and discovered it is not the same quality, so they are coming back.
However, we had to say goodbye to one of our staff who found a higher-paying job closer to home.
Orezimena- Christian Merchandise Store
The next time I see black shirts, I am buying in bulk!
I run a store that sells t-shirts and tote bags. We are navigating an increase in prices and supply chain constraints. For some reason, suppliers don't just have black shirts! I think it is probably the cost of importation.
I have a plan to increase my prices this month. I am already speaking to customers to let them know what is coming. For the supply chain issue, I have made up my mind to buy in bulk. I can't keep saying we don't have black shirts when customers ask.
Rukky - Hair Business
I had to increase staff salaries
I buy hair and make it into wigs so we use a lot of electricity. What we could do with N3,000 naira fuel now requires us to use N15,000 fuel. We haven't increased prices because already my goods are luxury goods so it is already on the high side.
I also had to increase staff salaries because they were complaining about transport costs. I think what the government has been trying to do is to provide constant electricity but even that comes at the cost of a massive bill every month.
A lot is going on coupled with dollar costs too. As a business person, you want to pass the cost to your customer but they are feeling these same increase too.
How is your business navigating today's economy? Tweet at us to share your experience.