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SACHET ECONOMY - What has Changed?

This article was written in 2020 for a now-defunct website. Much of what I wrote back then has not changed. As I understand, it has gotten worse as more people have sunk further into multidimensional poverty. As far as hunger goes, Nigeria ranks 103rd out of 121 countries facing hunger in the 2022 Global Hunger Index (GHI). Even these figures like GDP don’t do justice to the reality of how hard it has become to secure a meal for millions of Nigeria, it gives a glimpse.

Sometime in 2020 on Nigerian Twitter space, someone posted the sachet of Baileys (also known as Irish cream), a popular alcoholic beverage flavored with cream, cocoa, and Irish whiskey. That single post started conversations and social media threads on the sachet economy in Nigeria. “Sachetization” of everything in 50g, 35g, 23g, and even lesser quantities are not about companies choosing economic packs or rebranding. It is about the shrinking middle class. The once vibrant consumer base of many products and beloved household brands can no longer afford their products. To keep up with falling demands, many brands are choosing the miniaturization of the consumable route to stay at the level consumers can still have a taste of their favorite products at the very least.

Popular brands of consumables that have chosen the sachet route which began with sachet water moved on to powdered and evaporated milk sachets, then to cereals, toothpaste, spices, margarine, baby food, liquid soap, disinfectant, hair products…..just about any consumable you can imagine has a sachet option in Nigeria. While companies are choosing this option to keep their profits rolling in, the environment will be at the receiving end. Used sachets like plastic are not environment-friendly, Nigeria is already battling with plastic waste which contributes to drainage blockage, and flooding during raining season. Environmental sustainability in Nigeria is a story for another day.

The “sachet craze” reflects how more Nigerians have become poor. A recession was looming right before the numbers came out. Nigeria is officially in a recession as GDP contracts by 3.62% in Q3 2020. Nigeria's Real GDP contracted for the second successive quarter by 3.62% in Q3 2020, compared to -6.10% in the second quarter of 2020 and 2.28% growth recorded in Q3 2019. This is bad news in economics language but for the ordinary Nigerian man on the street, it probably will not make so much sense. These figures do not translate to anything tangible for ordinary people who are out looking for the next meal. What millions understand is that a bag of rice is above the minimum wage of N30,000 (the amount that millions of Nigerians earn less than as monthly income) and onion is now the new gold. People shocking screaming as they haggle for the right price to buy “ordinary onions” which have become so expensive a bag goes for as much as N58,000, it used to be N15,000. To simplify this, N100 can barely get any onion. The onion issue is just a piece of the big puzzle of the economic reality of millions of Nigerians.

Nigerians are broke and hungry, there is no better way to write that. In September 2002, UN World Food Programme (WFP) Executive Director David Beasley at a virtual session on the Protection of Civilians in Armed Conflict (Segment on food security risks in DRC, Yemen, Northeast Nigeria and South Sudan) spoke of food insecurity in Nigeria’s northeast region where 4.3 million people are food insecure. October/November 2020 Cadre Harmonise (CH) analysis of the Food and Agriculture Organization of the United Nations (FAO) projects that 13.9 million people in parts of Nigeria are at risk of being food insecure in 2021. The Nigerian 2019 Consumption Expenditure Pattern by the National Bureau of Statistics (in collaboration with The World Bank) revealed that Nigerians spend more on healthcare (₦2.4 Trillion) and transport ((₦2.5 Trillion) than services including telecoms ((₦2.2 Trillion), a larger percentage expenditure is on food at 56.6%. The consumption expenditure showing food, healthcare and transportation spending as the top three proves Maslow's hierarchy of needs; for the average Nigerian, survival before anything else and making basic needs is the greatest motivation. The figures and bad news can go on and on. The challenge now is how these data are being transformed into working public policies and positively move millions from hanging on the survival thread of living hand to mouth.

After everything is said and done, how can Nigeria progress in the smallest ways post-coronavirus?

The Nigerian Federal Government in March 2017 launched The Economic Recovery and Growth Plan (ERGP) for 2017 – 2020. The plan aimed at economic progress was supposed to “leverage the ingenuity and resilience of the Nigerian people”. Despite the lofty projections of the plan with five main priorities like macroeconomic stabilization with low inflation, agriculture as a tool for food security, energy sufficiency, improved transportation infrastructure and driving industrialization; recent figures from national statistics say otherwise. Adding to that is the impact of coronavirus, which is as bad as anyone can imagine for Nigerians; education, businesses, jobs, families, and religious activities were all negatively impacted.

“This crisis shows that if we fail to bring equity into the policy toolkit, many will fall further behind. This is particularly important for the ‘new necessities’ of the 21st century, such as access to the Internet, which is helping us to benefit from tele-education, telemedicine, and to work from home,” says Pedro Conceição, Director of the Human Development Report Office at UNDP.

As millions of Nigerians continue to wallow in different dimensions of poverty, policies that can positively affect the poorest must be implemented at all levels to reflect meaningful development. Economic jargon, committee gathering and whatever is being done at leadership levels must have the “human face”. If it has no positive reflection on the lives of ordinary people on the street, then it will not be sustainable in the long run. Rising government expenditure in a growth-locked economy without delivering on human welfare is counterproductive. As millions spend on basic needs to survive, less on luxuries, it is clear how normal economics must become focused on efficiency and human welfare. Producing products in sachet is not exactly any form of innovation and that should be a wake-up call to Nigerians especially key actors in the policy areas to embrace the present state of a poorer Nigeria and focus on providing tangible solutions that can put food on the tables of Nigerians.

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