Aswani Market, a bustling hub for artisans specializing in mechanics, electronics, and appliances within Lagos, Nigeria, is grappling with the debilitating effects of rampant inflation. The market, renowned for its air conditioner and refrigerator dealers, electrical and electronics specialists, and curtain vendors, is facing a stark reality: dwindling customer purchasing power and escalating operational costs threaten their livelihoods. While Lagos’s humid climate typically fuels demand for cooling solutions, the soaring prices of these essential appliances have left many customers unable to afford them, resulting in a significant decline in sales. Coupled with rising import duties and electricity tariffs, traders are finding it increasingly difficult to maintain their businesses, forcing some to contemplate selling off their existing stock rather than incurring mounting repair costs.
The impact of inflation is acutely felt across the market, particularly in the air conditioning sector. Remigius Ngharamike, President-General of Aswani International Market and an air conditioner specialist himself, highlights the dramatic price increases. Air conditioners that previously sold for N150,000 in 2023 now command prices upwards of N200,000 to N250,000. This surge in cost, coupled with exorbitant electricity tariffs, has significantly dampened demand. The refrigerator sector, while less affected, offers limited respite as refrigerators are durable goods and less frequently replaced compared to air conditioners, which often require upgrades when customers move to larger residences or experience malfunctions. Ngharamike, drawing on his engineering background and experience in conduit piping and AC installation, emphasizes the importance of diversification as a survival strategy in these challenging times. He supplements his income through contract work, enabling him to weather the downturn in sales.
New entrants to the market, especially recently trained apprentices, face the most significant hurdles. Lacking sufficient capital, they struggle to compete with established traders or maintain adequate inventory. While microfinance loans offer a potential lifeline, the often-exorbitant interest rates present a daunting obstacle. The volatility of exchange rates and escalating import costs further exacerbate the situation. Import prices for air conditioning units have doubled in recent years, driven by both increased duties and fluctuating exchange rates. This has forced traders to rely more on locally used or “tokunbo” (foreign, fairly used) goods, which still come at a premium. The cost of servicing existing units has also doubled, further squeezing profit margins for traders. Ngharamike advocates for government intervention in the form of soft loans and reduced import duties to alleviate the burden on struggling businesses. He points out the difficulty traders face in accessing loans from institutions like the Bank of Industry, which primarily caters to small-scale industries rather than traders. He further emphasizes the need for reduced import costs to encourage more frequent procurement trips abroad, which have become increasingly infrequent due to the high cost and diminishing returns.
John Umeh, a dealer in fan parts, echoes the struggles outlined by Ngharamike. He describes a market paralyzed by inactivity, with traders sitting idle in their shops due to the lack of customers. The escalating cost of clearing imported goods, which has tripled in recent years, has directly translated into significantly higher prices for essential components. For instance, a fan coil that once cost N7,000 now sells for N36,000, a price hike that deters customers despite the traders’ inability to lower prices without incurring substantial losses. Umeh highlights the logistical challenges posed by clearance delays at Apapa Wharf, which tie up capital and exacerbate inventory shortages. Like Ngharamike, Umeh emphasizes the importance of technical skills for survival. He relies on repair jobs during periods of low sales, catering to customers who opt to repair their industrial fans rather than replace them due to the threefold increase in the price of new units.
Umeh advocates for government support in the form of grants for essential equipment like cranes, which would significantly boost productivity and efficiency within the market. He also laments the declining interest in vocational skills among young people and suggests government investment in training programs to address this issue and foster a more sustainable economy.
Segun Kuti-George, Deputy National President of the Nigerian Association of Small-Scale Industrialists (NASSI), acknowledges the challenges faced by Aswani market traders and calls for improved organization and education to enable them to access government support programs. He notes the stringent conditions associated with Bank of Industry (BOI) loans, which often deter potential applicants. However, he also acknowledges recent government efforts to improve credit access, such as the N75 billion disbursed to BOI for MSMEs, and advises traders to engage with business development service providers for assistance in navigating the loan application process. He also encourages traders to form or join existing associations to strengthen their collective bargaining power and improve their access to resources. Kuti-George reiterates the BOI’s preference for financing equipment purchases rather than providing cash loans, suggesting that a collective request for cranes could be a viable approach.
The struggles faced by Aswani market traders underscore the broader economic challenges facing small businesses in Nigeria, struggling under the weight of a crippling 34.6% inflation rate. While President Bola Tinubu has pledged to combat inflation through measures aimed at boosting food production and promoting local manufacturing of essential goods, the traders’ plight highlights the urgent need for targeted interventions to support small businesses and ensure their survival in this challenging economic climate. Access to affordable credit, reduced import duties, and investment in infrastructure and vocational training are crucial to revitalizing these vital economic engines and securing the livelihoods of the countless individuals who depend on them.
