Numerical assessment of economic crisis on consumers purchasing power in Nigeria

Abstract

The uncertainties influencing consumers’ purchasing power in Nigeria and other developing economies have become recurring issues which pose serious threat to the survival of its citizens and business collaborations. Waves of instabilities in vital economic indicators significantly affect consumer purchasing power and spending decisions in the market. This study focuses on modeling the resulting impact of Nigerian economic crisis on the purchasing power of consumers using second derivative block Adams Moulton methods (SDBAMM). Following the instability display of the absolute wave errors (AWEs) of the modeled equation, the discrete schemes of partition p=4 of SDBAMM gave better and faster computational solutions than other lower partitions p=2 and 2 when compared with other applied numerical methods in literature. This study recommends that adopting stronger monetary policy tools by the Nigerian government to manage tariff uncertainty, inflation and exchange rate waves will improve consumers’ purchasing power and reduce economic fluctuations in the Nigerian markets.