Rising Food Prices and Economic Burden on Nigerian Households

Agriculture Page 

In an economy where many people have given up on luxury, the current rise in prices of food items is becoming a national embarrassment as households face a life of hunger and starvation, reports Festus Akanbi 

It is a sad irony that the reform programme of President Bola Tinubu, which was intended to reposition the economy has turned out to be an albatross one year after he unveiled his economic agenda as Nigerians groan over an unabated rise in food prices.

Observers say the ripple effects of these policies, especially the removal of fuel subsidy became more evident in the skyrocketing prices of goods and services as well as the transportation costs across the country, with a ripple effect on food inflation.

Last November, the Food and Agriculture Organisation (FAO) said at least 26.5 million Nigerians in Borno, Sokoto and Zamfara states as well as the Federal Capital Territory, Abuja, may face a food crisis between June and August 2024.

The organisation said the current cycle is happening after an unusual lean season which witnessed several shocks, ranging from persistent insecurity situations like insurgency and banditry but little did FAO realised that the scourge of food scarcity would spread to all corners of the country.

As transportation costs rise in tandem with the removal of fuel subsidies, so is the cost of moving farm produce to the market where they are being sought. Transporters blame the problem of bad roads and the high cost of diesel and other forms of fuel which they burn while transporting the goods to the urban centres.

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.

High Cost of Food

A common narrative among households these days is the issue of the prohibitive cost of food. This played out prominently during the negotiation for a new minimum wage by organised labour who painted a gloomy picture for the Nigerian workers because of the escalating prices of food items.

The problem became pronounced during the Muslim festival last week when many families could not afford basic food items like rice, beans, meat, tomatoes, pepper and other ingredients. 

The current hard time which is keeping prospective buyers away from the market is also taking a toll on traders who now complain of poor sales in recent times.

“Things are getting worse. The gap is excess. I can no longer restock my shop the way I used to do back then. And also I must say that my customers’ purchasing power has reduced. I don’t know where we are heading in this country,” a trader was quoted as saying.

She explained that a 50kg bag of foreign long-grain rice is now sold between N72,000 and N80,000 as against N62,000 it was previously sold while a 50kg bag of Nigeria rice is sold between N61,000 and N65,000 as against N47,000 it was sold before. And 100 kg of white beans (small) is now N120,000 from N75,000.

She explained that between November to December last year, 50kg diamond flour was N40,000 and it has also increased to N52,000. While a 25-litre of vegetable oil sold at N36,500 now sells between N52,000 and N54,000, a bottle of 75cl is sold for N1,800 as against N1,400 it was previously sold.

“The prices are highly unstable and are affecting people’s pockets. I know the government has been intervening but they need to do more in these continuous price increases,” she said.

“The way food commodities are going up, prices may likely never come down to the way they were before. I just hope we are not going into an era where it will be so hard for the less individual to get what to eat,” she added.

Insecurity Yet to Abate

The national president of the All Farmers Association of Nigeria (AFAN), Ibrahim Kabiru, said insecurity remains at the heart of the food crisis in the country.

“Firstly, the purchasing power of our currency is a very big issue for us and there is also the scarcity of food. The reason why we have food scarcity is because of insecurity that prevents the farmers from going to the farm to produce appreciably well,” he said.

Kabiru said the concerns are worsened by the actions of hoarders and middlemen who divert such food items before getting to the markets.

Kabiru said Nigeria has always recorded low prices during harvest because farmers sell off what they have to buy things that they do not have and they sell at a low price.

“So, essentially now, I mean at present, what we have in the system is that the farmers are just getting value for what they produce. They are saying that they are basking in making good money from what they produce. So, reporting will be that there is food inflation which is not good for the country but the only way to arrest the situation is to scale up productivity,” he added.

Analysts listed the failure of governments, especially at the state level to give priority to agriculture as well as the smuggling of food items, apart from the problem of insecurity which is driving many farmers away from farms, as the major issues compounding the food crisis in the country. They argued that with arable land in the country, Nigeria has no reason to suffer food scarcity.

Cross-border Smuggling of Food Items

Another problem is the booming smuggling of food items to the neighbouring countries where traders are cashing on the devaluation of the naira. It created a scenario where traders from these countries come to Nigeria with their foreign currency to buy cheap food items from Nigerians.

To checkmate this in his state, the Niger State Governor,  Umar Bago said he decided to stop bulk purchases of food items like maize, sorghum and beans from local markets to neighbouring countries, adding that food items purchased in the state markets were not stopped from being taken to other states. He said the decision was to regulate the level of sales and ensure people were not exploited by smugglers.

“We have markets in the local government headquarters; we have local markets in the bushes; now these aggregators, saboteurs, and even smugglers go to these villages.

“For a farmer to give you a bag of paddy, it may take him two to three days because it’s manual. Imagine arresting two hundred trucks of paddy crossing the Benin Republic from Niger State.

To defuse this time bomb, we need to address the core factors influencing the rise of food scarcity in Nigeria. Conflicts like armed banditry and kidnapping in key producing areas, poverty, climate change, inflation, and rising food prices are key drivers of this alarming trend.

Banking on Agriculture

Perhaps, it is in light of this that some state governments have decided to focus attention on agricultural development in their domains. However, the seriousness of the agricultural projects at the state level is a different ball game given the tendencies of successive administrations to throw away inherited projects from their predecessors.

Speaking on the decision of his administration to make agriculture a priority, the Oyo State Governor, Seyi Makinde said the situation in the country has made it necessary for states to focus on areas where they have comparative advantages.

“So, we had to find a way to stimulate the economy quickly. Our comparative advantage is the arable land. If we are to achieve accelerated development, we have to build our economy around this advantage.”

Makinde who went round with editors and newspaper columnists at a recent tour of the state said, “We went to Israel and they were showing us around the parks, which are known as Kibbutz. I asked them how many farmers they have in the whole of Israel, and they laughed at me. But they answered and told me they have 10,000 farmers. Israel is a major player in agribusiness in the entire world.

“So, we knew there was something wrong with the approach we had been adopting before now as far as agriculture is concerned, not only in Oyo State but across the country.

“So, for us to be able to increase productivity, we knew that we needed innovation, technology, and new actors across the whole of the value chain – from production to the markets. What we have done is to create that system that can drive the new actors into the sector and that is what we are seeing here today at the Fasola Agribusiness Industrial Hub. We deliberately picked the Fasola Farm Estate, which had been left to ruin by successive governments, as a pilot for our agribusiness development plan. The outcome of that decision is the world-class facility you are seeing here today.”

Experts believe Nigeria will experience stability in food prices if the government can follow the above programme to the letter.