Nigerian Families Grapple with Escalating Food Costs

As Nigerians grapple with the prolonged spectre of the prohibitive cost of food, analysts believe focusing on the normalisation of the exchange rate and the taming of the rising inflationary rates alone without addressing other issues like insecurity and smuggling of food items across borders will only prolong the Nigerian food crisis, writes  Festus Akanbi

The rising cost of food, a fallout of the rising inflationary trends has continued unabated as consumers grapple with an upsurge in the price of petrol and diesel which automatically translated to the high cost of moving food items from farms to markets. 

Nigerians are worried that despite the marginal decrease in dollar rates in recent times, the prices of food items in the country remain stubbornly unaffected. This disconnect highlights the complex web of factors influencing the cost of living, from local production challenges to distribution inefficiencies, which continue to impact consumers disproportionately.

Data compiled by Picodi, an international e-commerce organisation shows that the average Nigerian household spends about 59 per cent of its income on food. It was considered the highest in the world, according to the report published in August 2023.

Picodi researchers analysed statistical data from 105 countries and calculated how much money people spend on their groceries worldwide. Nigeria ranked 105th out of 105 countries.

The report said food and non-alcoholic beverages make up 59 per cent of Nigerian’s spending on goods and services.

The rise in the prices of key food commodities is mostly caused by insecurity, high cost of transportation of products, climate change, and the instability of the exchange rate of naira, experts said.

The director of the Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf,  said inflation has a major negative impact on the poor and middle-income earners in the country.

Yusuf notes that factors responsible for inflation are obvious, the first being insecurity, which prevents many farmers from accessing their farmlands.

The 2023 Global Report on Food Crises, (GRFC) establishes that the number of people experiencing acute food insecurity and requiring urgent food and livelihood assistance is on the rise.

In most communities, the situation is so bad that parents no longer ask their children if they are satisfied with the food, but if they have eaten.

Market Survey

A random survey showed that early last year, a paint of egusi was N1,500, today, it goes for N6,500. A paint of beans is now N6,000; a Derica cup of rice is N1,500 depending on the area of purchase and the quality. Garri, a paint bucket is now N2,600; a kilo of frozen chicken is N5,000 as opposed to N1,600 which was sold last year, and a paint of crayfish now goes for N6,000.

A medium-sized sliced bread, which was sold for N750 in January 2023, now sells for N1,700. A piece of egg rose by 100 per cent to N200 in January from N100 in the same period of 2023, while a crate of eggs now sells for N4,000 for large sizes as against N2,800 sold last year.

At Jolasco Market in Lambe, Ogun State, Mrs. Ajoke Enilolobo, who sells provisions, said that the price of 70g of instant noodles (Indomitable) rose from N3,000 sold early last year to N9000, while 120g Indomie noodles (Superpack) now goes as high as N12,300 as against N4,500 it was previously sold some years back.

At Ishaga Market, in Iju, Lagos, the story was the same as sellers of food items lamented a sharp drop in sales in recent times. One Alhaja Serifatu Ajagbe said many of the customers end up quarrelling with market women over arguments about the prevailing prices of commodities. Buyers complained that prices of essential food items are getting beyond reach these days. A family man, Mr. Philip  Ochanja said he came to the market on Monday to buy some chickens to mark his daughter’s birthday but regretted that the prices were prohibitive and that he had to settle down for frozen fish since a small chicken was sold for N10,000.

Rising Inflation

Nigeria’s headline inflation for March 2024, according to the National Bureau of Statistics (NBS) rose to 33.20%, while Food inflation soared to 40.01%. 

This signalled a consistent rise in headline and food inflation in the country, spurred by energy costs, logistics challenges, and insecurity. In Q1 2024, the Central Bank of Nigeria (CBN) made good its intention to target inflation by hiking the monetary policy rate twice (400bps in February 2024 and 200bps in March 2024 ), which led to an increase from 18.75% to 24.75%. 

As expected, reactions to the spike in food prices vary. Although food price increases have been a common phenomenon for a long time, market watchers said last year’s devaluation of the naira was responsible for the current scenario. 

They believe that the current challenge was caused because of the smuggling of food items from Nigeria to the neighbouring countries by farmers and market women who decided to cash in on the fate of the naira. 

States’ Interventions

Some states have waded into the food crisis. An example is the Lagos State Government, which through the Ounje Eko initiative designated a few buying spots for Lagos residents to purchase food items at discounted rates. 

The Governor, Babajide Olusola Sanwo-Olu had directed that Ounje Eko food markets should commence discounted sales of food items across the five divisions of Lagos effective from Sunday, March 17, 2024. 

The state government said food items – rice, beans, garri, bread, eggs, tomatoes, onions, and pepper, among others – would be sold at a 25 per cent discount to residents.

To prevent sharp practices and ensure the foodstuffs reach a large number of Lagosians, a voucher system was introduced as the pilot scheme began. 

There are plans in Akwa Ibom for a state agency to procure and sell food items at lower prices. In  Kano State, authorities raided warehouses where traders are suspected of hoarding food supplies.

 In Yobe State, the government banned bulk purchases of grain from local markets to stop hoarding and exports across Nigeria’s borders, saying it was to stem the tide of food scarcity and high cost of grains.

In Niger State, Governor Mohammed Umar Bago announced a ban on the mass purchase of foodstuffs from local markets. He ordered security forces to confiscate trucks carrying products in bulk and share the food with the people.

In Enugu State, Governor Peter Mbah said his administration would eradicate hunger and poverty in the state and unlock the rural economy through investment in agriculture and agro-industrialisation.

In Zamfara State, Governor Dauda Lawal recently hosted the Sweden Ambassador, Annika Hahn-Englund, in partnership on how to grow the state economy and address the current hardships.

Insecurity

Analysts said the wave of insecurity rocking the country in the form of communal clashes, militancy, farmers-herdsmen conflict and the rise of Boko Haram insurgency has further threatened the development of the agricultural sector as most Northern farmers have been killed, displaced from the native lands and their farm.

In the light of all these pressures of insecurity, many crop farmers and pastoralists were forced to abandon their lands and relocate to the neighboring countries of Niger, Chad, and Cameroun which have drastically caused a reduction in the production of food and skyrocketed prices of foodstuffs.

The analysis showed that insecurity affects economic growth by drying out investments, increasing unemployment, and dwindling government revenue, amongst others. Despite these effects, government capital expenditure on internal security did not grow astronomically to match the hydra-headed problem.

The President of All Farmers Association of Nigeria, Kabir Ibrahim, said achieving food security is impossible in the presence of insecurity, adding that the government must escalate efforts in combating insecurity as neglecting this issue may perpetuate ongoing challenges.