- Nigerians embrace products, say they’re cheaper
Following the prevailing economic hardship in Nigeria, food producers have devised different methods of packaging their food items in sachets so that people can afford them.
Checks by The Point at the weekend revealed that virtually all goods and products that are edible are now processed and packed inside nylon and sachet materials.
Some of the items that are now displayed at markets include foods that were hitherto sold in bags, congo and tin cup measurements.
They include rice, beans, garri, noodles, tomato pastes, salt, groundnut oil, palm oil, beef, flours, chicken parts, several brands of packaged powdered paps, corn and cassava flours, among others.
To address the rising cost of rice in Nigeria, small sachets priced at N800 have made a comeback in the market amid an alarming price surge for larger quantities.
Currently, a 50kg bag of local rice is being sold for between N80, 000 and N120, 000, depending on the brand and region.
“It also helps me to prevent unnecessary wastage because once you buy so many foods and you keep them at home, these children can finish them before you return from work.”
These prices exceed the average monthly income of many Nigerians.
A local rice producer, Big Bull, has begun selling these N800 sachets to make rice more accessible to consumers.
While some of the traders display these products in their shops and kiosks, others take to social media to advertise the goods.
When The Point sampled the opinions of some marketers of the packaged foods, they revealed that it was to draw sales by packaging the food items in smaller units.
A food seller in Osogbo, capital of Osun State, Abike Adaramola, explained that more people have been patronising the goods in sachets because of the affordability.
She disclosed that aside from its prices, the sachet foods can easily be stored and preserved.
“It is obvious that bags of rice and beans or garri are not within the reach of many struggling Nigerians. So, these packaged foods in sachets come handy. Aside from the fact that they are cheaper when compared to the bagged items, they are easily stored and preserved. For instance, if you buy a 330g of rice that is in nylon, it costs N1, 200 and it is affordable.
“We have powdered pap and palm oil in sachets now. So, one can easily store them in the fridge. These items can easily serve as gifts too. Many of my customers buy these packaged items as gifts and people appreciate them,” Abike said.
Displaying different brands of packaged food items on her social media pages, a marketer of starched foods, Ajoke Foods, said the business has been rewarding.
According to her, she delivers food items to people across the country through waybill, adding that consumers, who could not afford buying bulk items, find it easier to go for small sizes.
“I sell different brands of food items and they are in sachets and nylons. People buy them because they are affordable. I also sell cocoyam powder and yam flour, which are in sachets,” Ajoke mentioned.
For some of the consumers, the items are cheaper to purchase when compared with congo measurements and bags.
A Nigerian, John Godwin, a father of two children, posited that the smaller sizes of the food items assist his family in rationalizing food.
Godwin said the purchase of packaged foods has not only been affordable, but that it has been assisting his family to manage the little he is able to provide.
“It also helps me to prevent unnecessary wastage because once you buy so many foods and you keep them at home, these children can finish them before you return from work. But, with these smaller sizes, I prefer buying them often, it saves me money rather than saving up for a long time to buy them in bigger containers,” he said.
Manufacturers adopt sachet marketing to survive
High poverty and inflation rates in Nigeria are leading many businesses, including those in tech, to also adopt sachet marketing to survive.
For Nigerians, the end result is a huge depletion of their purchasing power and ultimately, less money in their accounts.
About three years ago, a Chinese satellite TV provider with a strong presence in Nigeria, StarTimes, added daily and weekly subscriptions – with fewer channels – at N60 and N300 respectively, to its existing monthly option.
“The Nigerian market is diverse, and the potential for profit remains high. However, we can’t overlook the economic instability which has, in some way, affected purchasing power. At times like this, it becomes pertinent for industry players like ourselves to cushion the effect of this situation on customers,” the Chief Executive Officer, Patrick Michael, said.
Fast-moving consumer goods businesses (FMCGs) have also adopted it for items like “‘pure water”, powdered milk and instant noodle packs.
A Nigerian economist, Shakirudeen Taiwo, said this has allowed the companies to cater to up to 80% of the market.
But in recent years, brands have ramped up the strategy, as a new economic reality set in.
These products are now sold in even smaller sachets or small nylon bags.
“As at last count, we have over 85% of households in Nigeria living below $3-5 per day, which is huge. So, companies start modeling their products to fit this income bracket of people since they make up the bulk of the population,” Taiwo said.
He explained that doing this helps businesses reach more customers and maximise profits as they can sell more products at a cumulatively higher price. But more importantly for buyers, it cushions the effects of inflation even if they have to sacrifice quantity and in some cases, quality, too.
The Point also discovered that the trend is playing out in Nigeria’s tech industry and influencing how more startups are thinking about product pricing.
Many technology firms appeal to younger Nigerians because they ease bureaucratic and expensive processes of investing, saving, buying insurance, and accessing loans by introducing lower fees and cheaper payment plans, among other things.
As inflation rises while purchasing power inversely declines, more companies in various sectors of the economy are turning to sachet products, even service providers that previously served only the upper and middle class.
“A trip to the mall will show you that the concept of sachetisation is gaining more traction. We might also start seeing it in terms of services. Companies offering integrated services might start offering specific services at lower prices to ensure affordability and business survival,” Taiwo said.
Concerns about public health and safety
Meanwhile, The Point discovered that many of the packaged food products are unregistered thus posing great risks to public health and safety.
Further checks revealed that the items only carry their brand’s names and product labeling.
They, however, lack the declaration of content of ingredients under composition, expiry or best before and manufacture dating as well as the batch or lot numbers. According to the Pre-Packaged Food, Water and Ice (Labelling) Regulations 2019 of the National Agency for Food and Drug Administration and Control, it is prohibited to manufacture, import, export, distribute, advertise, sell or use a pre-packaged food without a date marking, batch number, registration number, name of the food, brand name, labeling information, list of ingredients, name, address and contact information of the manufacturer or distributor, among other requirements.
Date marking involves a legible display of “the day, month and year of manufacture on the label; when a food must be consumed before a certain date to ensure its safety and quality the “Use-by Date” or “Expiration Date”, the “Best-Before Date” or “Best Quality Before Date” shall be declared.”
Also, many of the packaged items examined by The Point lacked a NAFDAC Registration Number, the manufacturer’s details, except cell phone numbers.
“As inflation rises while purchasing power inversely declines, more companies in various sectors of the economy are turning to sachet products, even service providers that previously served only the upper and middle class.”
The NAFDAC REG NO or NRN is a unique registration number or certificate of registration issued after a product has passed the quality and standard test carried out by the agency.
However, many consumers appeared unperturbed as they opted for the packaged food items.
Last month, the Director General of NAFDAC, Prof. Mojisola Adeyeye, urged manufacturers and distributors of alcoholic beverages to comply with the ban on sachet and PET bottle alcohol.
While emphasising that alcohol in PET bottles has been banned, she warned distributors and retailers to desist from selling and distributing the prohibited products.
Adeyeye referred to the ministerial ban and the agreement signed by the Distillers and Blenders Association of Nigeria in 2018.
The agreement, which introduced a phased withdrawal process, has now reached its final stage to ensure the complete removal of these products from the market.
She explained that NAFDAC stopped registering and renewing licences for such products in 2018, giving manufacturers sufficient time to exhaust their stock and cease production.
She added that enlightenment campaigns and stakeholder engagements have been conducted to encourage compliance with the ban.
Adeyeye expressed concern about alcohol consumption among teenagers and young adults, highlighting that sachets make alcohol cheap and easily accessible, with potentially devastating consequences.
She reaffirmed the agency’s commitment to protecting public health through strict regulatory measures.
Food inflation rises in Nigeria
Food inflation in Nigeria has been increasing, with high prices for staple foods and other items.
This has contributed to overall inflation in the country. Many citizens are finding it difficult to cope with the hunger ravaging Africa’s most populous nation.
Nigeria’s inflation rate is projected to decline to 27.1 per cent by December 2025, according to the latest NESG-Stanbic IBTC Business Confidence Monitor report.
This forecast offers a ray of hope to businesses and consumers struggling with prolonged economic difficulties, as it suggests that structural reforms are beginning to yield positive results despite lingering challenges.
Inflation remains a central concern for Nigeria’s economy, with rising fuel costs and currency depreciation driving up expenses across all sectors.
The report noted that inflationary pressures were particularly acute in 2024, following the removal of fuel subsidies and the liberalisation of the foreign exchange market.
However, the BCM anticipates a gradual easing of these pressures in 2025.
The report forecasts that headline inflation will remain elevated through the first nine months of 2025 but will decline significantly in the fourth quarter.
The report stated, “We expect headline inflation to remain sticky in 9M:25 but settle below 30.0 per cent from September 2025 as high petrol cost gets smoothened out of the year-on-year headline inflation, barring any unexpected negative shocks to petrol prices.
“This expectation, in addition to our prognosis on the USD/NGN pair, fiscal deficits, and food supplies, informs our forecast that the headline inflation may average 30.5 per cent y/y in 2025 and settle at 27.1 per cent by December 2025.”
The anticipated easing of inflation is also expected to influence monetary policy. According to the report, the Central Bank of Nigeria’s Monetary Policy Committee may adopt a more accommodative stance in late 2025, potentially reducing interest rates to stimulate economic activity.
The report further highlighted that business performance in December 2024 experienced a slight recovery due to seasonal festive demand.
The Current Business Performance Index, which measures economic activity across sectors, rose to +0.77, an improvement from -2.74 recorded in November.
This marked the first positive reading since September 2024, reflecting a modest uplift in business activity.
However, the performance across sectors was uneven. Agriculture emerged as the top-performing sector with a net balance of +13.93, spurred by heightened harvest activities and increased demand for produce.
Non-manufacturing industries also showed resilience, recording a net balance of +5.80.
In contrast, the manufacturing, trade, and services sectors faced significant challenges.
The Future Business Expectation Index, which reflects optimism about future business conditions, settled at +28.61 in December 2024, down slightly from +33.17 in November.
Despite the decline, the index still indicates cautious optimism among businesses for improved conditions in the first quarter of 2025, particularly in agriculture, manufacturing, and non-manufacturing sectors.
Challenges that tempered business optimism include high operational costs exacerbated by inflation and exchange rate fluctuations.
Frequent power outages remained a critical issue, forcing many firms to depend on expensive alternative energy sources. Insecurity, limited access to financing, and cumbersome tax regulations further compounded the difficulties faced by businesses.
Although access to credit improved modestly in December, with a net balance of +8.25, the high cost of borrowing continued to act as a barrier to investment.
The report also highlighted persistent structural challenges hampering economic growth. The Cost of Doing Business Index surged by +50.32 in December, reflecting the mounting pressures on firms.
Despite these challenges, the report offered a cautiously optimistic outlook for economic growth in 2025.
Nigeria’s GDP is projected to grow by 3.5 per cent in 2025, up from an estimated 3.2 per cent in 2024.
This growth is expected to be driven by improved conditions in key sectors such as agriculture, manufacturing, and non-manufacturing industries.
The easing of inflation and the stabilisation of exchange rates are anticipated to bolster consumer spending and economic activity.
