Impact of Inflation on Consumer Purchasing Power in Abakaliki, Ebonyi State

Inflation erodes household purchasing power and disproportionately affects low- and middle-income consumers in developing economies, making it a central concern for economic policy and business planning in markets like Ebonyi State. This study examines the impact of inflation on consumer purchasing power in Abakaliki, the Ebonyi State capital. The research is anchored on the Quantity Theory of Money, which establishes a direct relationship between money supply growth and price level increases, and the Fisher Effect, which analyses how inflation expectations influence real purchasing capacity. A cross-sectional survey design was adopted. The population comprised 3,200 household heads in Abakaliki metropolis. A sample of 356 respondents was drawn using systematic random sampling from residential zones across the city. Data were collected via structured questionnaires and complemented by secondary price data from the National Bureau of Statistics. Multiple regression and correlation analyses were applied. Findings reveal that food price inflation exerts the most severe negative impact on household purchasing power, with low-income earners allocating over 68 percent of monthly income to food purchases during inflationary periods. The results further show that rising transport and housing costs compound the purchasing power erosion effect, limiting households' capacity to invest in health, education, and savings. It is concluded that sustained inflation significantly and measurably diminishes consumer welfare in Abakaliki, with the most severe impacts concentrated among the urban poor. The study recommends that government authorities prioritise agricultural supply chain improvements and targeted price stabilisation subsidies for essential food commodities to protect vulnerable consumer segments.

Keywords: Inflation, consumer purchasing power, Abakaliki, Quantity Theory of Money, household welfare