Nigeria’s Worst Flooding in a Decade: A Threat to Inflation, Agricultural Productivity

Tosin Oshinubi

Climate change is a global threat, manifesting in different forms across different regions.

In Nigeria, the incidence and severity of flooding are at the highest levels in over a decade. The National Emergency Management Agency (NEMA) reported a deluge of flooding incidences from June through October 2022, across 15 states. Essentially, overrun riverbanks submerged thousands of acres of farmland, and left 1.3 million homeless and hundreds dead.

Floods have historically had strong adverse impacts on agricultural productivity, with loss of arable land and the disruption of farming cycles. Nigeria already suffers some discernible level of food insecurity, largely owing to conflict and failing supply-side infrastructure. Factoring in additional pressures from the floods, the United Nations Food and Agriculture Organisation (FAO) estimated that 19.4 million Nigerans experienced food insecurity between June and August 2022.

Given that the National Bureau of Statistics (NB) reported a 15-year-high inflation reading of 20.8% in September 2022, lower agric production capacity could worsen already-bloated food prices. This formed the basis of a recent report released by CardinalStone, which assessed the impact of the flooding on agric GDP, inflation as well as the vulnerability of FMCGs.

The report revealed that ten of the affected states are key producers of major food crops, whose shortages could have a reverberating effect on the food basket of the NBS’ consumer price index (CPI). Specifically, rice output faces the greatest risk. Nigeria’s foremost rice producer, OLAM–responsible for 25% of domestically production and 18% of total consumption–disclosed that its Nasarawa farm has been entirely submerged in water. Undoubtedly, if this situation lingers, there could be a material slowdown in national economy given that the agric sector accounts for a quarter of the GDP.

History provides perspective. In the third quarter of 2018, prolonged torrential rainfall caused flash flooding in 12 states–some of which were key food baskets–and inflicted severe damages on crop fields. Agric sector growth in in that quarter slumped to 1.9%, significantly lower than the the preceding 5-year average of 3.8%. Against this backdrop, CardinalStone analysts estimate the extended flooding could “yank off a cumulative 1.0% from Q3 and Q4 GDP growth rates”, with the effect being likely 0.7% and 0.2% moderations in agric and headline GDP growths for full-year 2022.

With food (and energy) prices being critical drivers to inflation trends; it therefore becomes imperative for the Nigerian government to firm up efforts towards combating the current crisis. Additionally, supranational commitments must be hedge against future occurrences–a Herculean task but one that could help yield great socioeconomic value.

Dr. Tosin Oshinubi – Chief Operating Officer and Transformation Lead, Cardinal Stone Securities