Aswani market traders decry crippling inflation

Aswani market traders made good business selling and repairing air conditioners and fans for residents of Lagos’ humid cities, but they are beginning to worry as inflation threatens their livelihood. ARINZE NWAFOR writes

Aswani Market feels the bite of the inflationary crisis that has hurt businesses in the country badly. The Lagos market is an artisan hub, known for mechanics, electronics, and appliance trades, and recently the traders have struggled under the weight of skyrocketing costs and dwindling customer purchasing power. Aswani has three sections: refrigerator and air-conditioner dealers, electrical and electronics dealers, and curtain dealers.

Lagos, just like much of Nigeria, is very humid, and Aswani traders make good money providing the convenience of supplementary ventilation. According to a World Weather Attribution publication, Nigeria is one of the countries in the Guinea zone that experienced dangerous levels of heat in February 2024.

The publication read in part: “The most severe heat occurred from February 11-15, 2024, with temperatures above 40°C. In Nigeria, doctors reported an increase in patients presenting for heat-related illness, people complained of poor sleep due to hot nights, and the national meteorological agency issued several warnings about the heat.”

However humid Lagos is, selling air conditioners or new fans has slowed down as most customers cannot afford these ventilation products.

The PUNCH visited the Aswani market in the waning months of 2024 to learn how the spiralling prices of goods, import duties, and operational costs push businesses to the brink. The traders are now calling on the government to provide much-needed relief through reduced importation costs, better credit facilitation, and tools such as cranes to boost efficiency.

The President-General of Aswani International Market, Remigius Ngharamike, is deeply familiar with the challenges traders face. Ngharamike, who specialises in air conditioners, fridges, and associated services, outlined the plight of his sector, including high electricity tariffs.

“Last year (2023), we sold about N150,000. But now, before you can get a good air conditioner, we’re talking about N200,000, N250,000,” Ngharamike said. “And the high tariff of light also affected our business.

“Because of the high cost of living, the tariff towards electricity is so high. At times, for those who are using prepaid (meter), if you don’t have money, you cannot afford to have an inverter AC; automatically, you forget about anything about AC.

“Even so, many people are selling the one they have already. Instead of maintaining it, they will sell it off because of the high cost of repair bills, thereby affecting our business. Unlike before, in a day you can sell two, three, or four (AC units). But now, in a week, you hardly sell two or three. We have fewer customers now than before.”

The refrigerator sector has offered little reprieve. “The demand for fridges is lesser than the demand for air conditioners. It’s just like somebody living in a duplex; you can go for only one fridge and one freezer. But in that duplex, let’s assume you have five rooms; automatically you will have five air conditioners. So, you see the difference? That’s why somebody can maintain one fridge for 10 or 15 years.

“But air conditioners, maybe when you are leaving from a smaller apartment to a bigger apartment, the demand, you have to upgrade. So, in that case, there’s not much difference as far as you want to cover up through the fridge (sales).

“Fridge is something that the demand always comes once in a while, but AC, even if somebody did not buy, you can go for servicing. Somebody can call for maintenance of the AC; you can go for installation. We don’t have much advantage in the sales of fridges. So, the thing is affecting us seriously,” the Aswani market president asserted.

For Ngharamike, resilience comes from years of experience and diversification, as he submitted, “I’m an engineer by profession. I do conduit piping as a person. The advantage I have, many other people may not have it. Because if I don’t even sell here, I do contract jobs; I do AC conduit piping for buildings. At times, I cover through that means. When the demand here is low, then you cover up by doing some other maintenance for people and thereby making your money to cover this side.”

New entrants, such as freshly settled apprentices, face an uphill battle to survive the harsh market conditions. “For younger traders, the main hurdle is finance,” he said. “Without enough capital, they struggle to stock goods or compete. Microfinance loans could be a lifeline, but the interest rates need to be reasonable.”

Import costs and exchange rate volatility are also pressing concerns. According to Ngharamike, “In the previous years, importers could get one and a half horsepower of an air conditioner, split unit, be it LG, Samsung, or Panasonic; you could get it from an importer at a rate of N80,000. This was around two or three years back. But now, before you could get one and a half horsepower, today, you’ll be looking at N200,000 as an importer.

“So, you can imagine the difference; the margin was so much that even if you don’t have enough capital, you can go for direct ‘tokunbo’ (foreign, fairly used products) or for fairly used, Nigerian-used. You can get Nigerian-used, which is very okay and is still standard. You can get it from your source for between N130,000 and N150,000, depending on the grade.

“We can sell for like N200,000 or N180,000, but anything direct tokunbo, you can’t get less than N230,000 or N250,000.” The cost is very high because of the import duty and the exchange rate. That is how it’s affecting most of us. And you know, in business, you sell what you have.”

The burden extends to repair services. “The cost of servicing ACs has doubled,” Ngharamike revealed. “What used to cost N5,000 now goes for between N10,000 and N15,000, and even that barely covers our overheads.”

He urged the government to provide soft loans and reduce import duties. When The PUNCH queried him about accessing loans from the Bank of Industry, Ngharamike said, “For now, I don’t think anybody here has benefitted from that. And we are traders; none of us have industries. Because when you approach them, they say they want those that have industries, small-scale industries, but here we are purely traders.”

Further, the businessman called for intervention in importation, adding, “Also, bringing down the cost of importation will help. In those days, one could go to Hong Kong, say, two or three times a year, but this time around, you hardly go once. When you calculate the high cost of the goods, the importation, at the end of the day, you see that you are just doing an exchange without making any gain. So, automatically, you just (prefer to) remain here and manage the little  you have.

“But if the cost of importation is very low, people can go two or three times and make their gain. Even those that are selling new ones, it’s affecting them. The cost of going to China now to bring goods there is not here. It’s not a small thing. So, these are the areas the government should help the traders.”

Another trader, John Umeh, a dealer in fan parts, painted a stark picture of how inflation has disrupted his seasonal business.

Umeh said, “The situation of the country affects everybody because we are not doing as we were doing before. Formerly, we will not see anybody staying idle in a shop at this time. Everybody will be at his or her workshop, working, busy, and you will see customers coming.

“But today, we are not seeing anybody. Nobody is coming again. Everybody is complaining. Even those that are buying from us are complaining, ‘There is no money.’”

Umeh reckoned that the crux of the problem lies in importation. He remarked, “Nine years ago, clearing a 40-foot container cost N7m to N8m. Today, it’s N24m,” he said. “This has driven up the prices of goods. For instance, a coil that once cost N7,000 now sells for N36,000. Customers complain, but we can’t lower prices without losing money.”

Umeh shared the difficulties of maintaining inventory. “Importers’ goods often remain stuck at Apapa Wharf for months due to clearance delays. This ties up capital and worsens shortages,” he explained.

Adaptation has been key for Umeh, who noted, “You need technical skills to survive,” as he explained the need for traders to be skilled technicians.

“During low sales periods, I rely on repair jobs. Customers prefer fixing their industrial fans to buying new ones,” he revealed. “For instance, a new industrial fan costs N150,000 now, compared to N45,000 before. Many choose to repair rather than replace.”

The businessman also emphasised the importance of government support. “Technical work needs better tools and equipment,” he stressed. “If the government could provide grants for machinery like cranes, we would do better than this. And if you had all those cranes, it would improve your productivity.

“You have that crane, you have tools to work; it will save more energy, lives, and upgrade the work.”

Umeh bemoaned the lack of vocational training for youth. “Most young people don’t want to learn technical skills. If the government invests in training programmes and equipment, we can create jobs and build a more sustainable economy,” he said.

Meanwhile, the Deputy National President of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, weighed in on the challenges facing the Aswani market traders, calling for more organisation and education to help them benefit from government policies.

Kuti-George noted that the BOI loans are notably harder to access due to the lender’s stringent conditions. “The BOI loan is discriminatory, alright. What I know about it is that the conditionalities can be discouraging because there are usually many.

However, he acknowledged the government’s recent efforts to improve credit access. “The N75bn that the Federal Government just gave to BOI to disburse to MSMEs in the country, they can access it. I attended a town hall meeting on it a few days ago, and it was explained there. The president even increased it from N1m to N5m,” the NASSI leader said.

Kuti-George also advised traders to engage with business development service providers to navigate the loan process, saying “They may need to talk to those we call business development service providers who are registered with BOI to assist them. I am one of them. The other thing they may need to do is to come together to form an association, if they haven’t gotten one, or they join an existing thriving association.”

Concerning the need for cranes in the Aswani market, Kuti-George submitted, “BOI will always be happy to finance equipment rather than to give cash to somebody.”

All efforts by The PUNCH to have the Chief Executive Officer and Director-General of the Small and Medium Enterprises Development Agency of Nigeria, Charles Odii share the needs of the traders, especially the availability of cranes, proved abortive.

The voices from Aswani Market reflect a broader struggle faced by Nigeria’s small businesses. Nigeria’s inflation is 34.6 per cent, having increased by 0.72 per cent from October 2024’s 33.88 per cent.

President Bola Tinubu on January 1 addressed the crippling inflation and promised to bring it down to 15 per cent by boosting food production and promoting local manufacturing of essential drugs and other medical supplies.