By Ajibola Olarinoye
“There are people in the world so hungry that God can not appear to them except in the form of bread.”
The quote stated above was made by the late Indian activist, nationalist, and brilliant lawyer, Mahatma Ghandi, who was unfortunately assassinated in 1948.
Without any shadow of doubt, the statement vividly depicts the current abject poverty in Nigeria, which is largely caused by the skyrocketing prices of foodstuffs in our markets
In Nigeria at present, the way in which prices of foodstuffs are increasing has been a source of worry to stakeholders due to the effects such a dangerous factor has on society. A Yoruba popular proverb says “Ti Ounje ba Ti Kuro Ninu Ise, Ise Buse”. The English interpretation is “If the Issue of Feeding Has Been Resolved, Poverty Has Been Defeated to a Large Extent”. The proverb also shows the importance of easy access to at least three square meals daily for every individual in every society. If poverty is so severe that it has got to the extent of affecting access to nutrition, it could lead to a high level of frustration, in which the multiplier effect is a high crime rate in society.
It is so glaring that since 2015 in Nigeria, prices of foodstuffs have been on the up, making life extremely difficult for average Nigerians who are living on low incomes. The civil servants in the country are also part of the groups that are at the receiving end of this current abnormal inflation in food prices.
If we juxtapose the prices of some foodstuffs between 2015 and 2021, it shows that the increase is astronomical and indeed shocking.
For instance, a bag of foreign rice between 2015 and now has increased from N10,500 to N30,000, while a bag of local rice which was sold for N6,000 then is now N22,000.
Also, in 2015, a basin of garri which was N3,000 then is now N11,000;. A cup of beans in 2015 was N30, but it is now N120; an average tuber of yam in 2015 was N200, but is now sold at N1,000; a sizeable frozen fish in 2015, which was N100, is now N800. The analysis above overtly shows that prices have experienced an increase across all items relating to foodstuffs.
Another factor that made this matter very excruciating and annoying is that the incomes of many workers in Nigeria have remained stagnant since 2015 amid a high increase in food prices. Some organisations are not willing to increase workers’ salaries anytime soon, despite the massive efforts being made by the employees for years to ensure that organisations are running seamlessly.
For instance, a worker whose monthly income was N35, 000 in 2015 could easily buy some food items and still have little savings at that time, but that is hardly possible now considering the current abnormal inflation.
Between N25,000 and N35,000, many average income earners now find it extremely difficult to spend on basic needs in life, such as feeding, transportation, energy consumption, and other important amenities. They also find it very difficult to save in the face of the current economic realities. Lots of men who are above the age of 40 have not gotten married because of the rising cost of maintaining a family-a situation which has left a sizeable number of matured ladies unmarried in the country.
A report from the National Bureau of Statistics states that Nigeria’s inflation rate since 2013 to date has experienced an increase from 8.48 per cent to 17.93 per cent in May 2021. In 2013, the inflation rate was 8.48 per cent, while it dropped to 8.06 per cent in 2014. In 2015, when the present government took over, it skyrocketed to 9.01 per cent with a yearly change of 0.95 per cent and has continued to rise dramatically.
The report added that in 2016, the inflation rate increased to 15.68 per cent, about a 6.67 per cent increase from 2015. In 2017, it remained at 16.52 per cent, with about a 0.85 per cent increase from 2016.
In 2018, the inflation rate went down to 12.09 per cent without about-4.43 per cent from 2017.
The NBS report added that the inflation rate stood at 11.40 per cent with a yearly change of-0.70 per cent, while in 2020 and 2021, as at May, the inflation rate stood at 13.2 per cent and 17.93 per cent respectively.
The rising cost of foodstuffs in Nigeria, coupled with the stagnation of income, has pushed millions of citizens below the poverty line, as many reports have stated. Experts have been worried that if the skyrocketing rate of inflation is not reined-in, more millions of people will also join the poverty circle and this will pose a serious danger to the country.
Another report by the NBS released in 2020 stated that the Nigerian Living Standards Survey (NLSS) estimated the number of people living in abject poverty to be 82.9 million. The report shows that 40.1 per cent of Nigerians are classified as poor by national standards.
The report also recorded a poverty line of N137,430 for each person per year, a figure that translates to an average of N376 per day. With this figure, there is no vestige of doubt that more Nigerians now live on less than one dollar a day, which translates to about N500 per day.
Speaking on the development, the Governor of the Central Bank of Nigeria, Godwin Emefiele, has indentified insecurity as a major reason responsible for the inflation of food prices in the country.
Emefiele said this while presenting the communique from the Monetary Policy Committee (MPC) meeting recently.
According to him, inflation, which has increased for the 18th consecutive month, was worsened by food inflation, adding that insecurity in many food-producing areas of the country was a major contributing factor.
“MPC noted with concern the continued uptick in inflationary pressure for the 18th consecutive month as headline inflation continued to rise to 17.33 per cent at the end of February 2021 from 16.47 per cent in January 2021.”
” This specific uptick in food inflation was the major driving factor for the uptick in headline inflation.
“This was due to the worsening security situation in many parts of the country, particularly the food-producing areas, where farmers faced frequent attacks by herdsmen and bandits on their farms,” he said.
Speaking further, he lamented that the apex bank was making massive interventions in the agricultural sector, lamenting that rising insecurity was limiting expected outcomes as regards supply to the markets.
He said that the rate of insecurity is a major contributory factor to the rise in food prices.
In order to ameliorate the situation, the CBN Governor called on the Federal Government to collaborate with relevant stakeholders to urgently address the problem of insecurity across the country.
Secondly, Emefiele added that the hike in the pump price of petrol, the upward adjustment of electricity tariffs as well as the depreciation in the value of the Naira also contributed to the rise in food prices in the country.
Also lending his voice to the hike in prices of food items, John Isemede, the former Director General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said that the current alarming rate of inflation in foodstuffs is caused by weak production basis
He also identified issues such as lack of value addition, lack of export culture, more money in circulation, and fewer goods/perishable goods without storage silos and cold rooms, etc.
According to him, if the government is saying it is diversifying into agriculture, there ought to be impressive government interventions to move the farming community away from archaic subsistence farming to commercial and large-scale agriculture supported by modern equipment.
He added: “Subsistence farming is what we have been relying upon. We are a country that doesn’t have commodity boards compared to what we have in Cote d’Ivoire and some other West African countries. How can we feed ourselves? Where are the silos for storage?
” The government should also look at centralizing the taxation system. You can imagine the number of taxes a food truck coming from Jos, Maiduguri, Makurdi – the North – will pay to revenue agencies before arriving in the southern market.
” This is part of the reason why food prices are escalating. The government should find a way of harmonizing and centralizing tax collection by these revenue-collecting organs of government.
” In fact, the government should completely exempt food trucks or locally-grown, produced food items from tax or levies.
” Government interventions were wrong-headed, like the closure of borders. It breached the ECOWAS Agreements.
” The government ought to have used tariffs to discourage Nigerians’ unbridled appetite for imported goods and re-invest the gains in its diversification efforts into agriculture.
He also berated the Federal Government for not carrying the organized private sector along as it ought to.
“Before the ban too, the government ought to have taken the organized private sector into confidence so as to prepare them for the policy whereby they could fully look at reaping the gains: growing local capacity and production.”
” Any time the government bans any product, it should discuss with the private sector concerns that could maximize and reap from such a policy.
“Ban here and there without local capacity, no plans in place/trend to be self-sufficient – is dangerous.”
‘Low production of such goods after the ban would automatically jerk up both prices and lead to hoarding.
“We are a nation that is import-based, not export-thinking.”
On his own part, the National President, Maize Growers Processors and Marketers Association of Nigeria (MAGPAMAN), Dr Edwin Uche, blamed the high cost of food commodities on the advent of the COVID-19 pandemic, which, according to him, greatly affected service delivery within the agricultural sector.
The agriculture expert decried the situation whereby movements were restricted and farmers could not grow much in 2020: a situation which, according to him, resulted in the current situation Nigerians are facing.
“The year 2020 was a challenging year globally and the advent of the COVID-19 pandemic affected the movement of service delivery within the agricultural sector. Most of the agrochemicals and what we need to drive agriculture in the north come from the south.”
“The Central Bank of Nigeria (CBN) intervention like the Anchor Borrowers’ Programme was fully activated to see how we could be able to bridge the gap experienced between March and September 2020.
“Before then, we could not harvest what we planted during the dry season, especially in 2019, and could not have an established dry season for 2020 and an early wet season for 2020. We managed to do late wet season and dry for the season 2020/2021. ”
Explaining further, the stakeholder stated that the output from the field was very low and it affected the products in the market.
“This is not just a Nigerian factor, but a global issue. Agriculture suffered a major blow globally due to COVID-19,” he said.
He, however, said that the association is doing everything possible to motivate farmers to work with the relevant government agencies.
“The federal government, through the CBN, has voted in billions of naira to support agricultural interventions. We are doing everything possible to engineer our farmers and motivate them to work with the necessary government agencies that have to do with agriculture to grow enough to support both local and industrial use in 2021 and beyond.
“We will have a massive harvest towards the end of the wet season. We believe in a short while, the cost of production will go down,” he added.
In his own opinion, Segun Ajayi-Kadir, Director General of the Manufacturers Association of Nigeria (MAN), said the spiralling prices of foodstuffs is not a surprise to the association.
According to him, the manufacturing sector has remained in recession even after the technical exit of the country’s economy.
He added: “The current inflationary condition is a major contributor to the low-export penetration of goods manufactured in the country, some of which are largely in the agricultural sector of the economy into the international market. His
opinion is sync with that of the CBN Governor, Godwin Emefiele, on how insecurity has caused the current spiralling inflation.
He said: “Note too, the disruption by insecurity of the feeder, i.e., supply of raw materials to the food manufacturing segment of our association”. Suggesting a
solution to the situation, the MAN boss advised the government to pursue consumer price stabilization measures that will enhance growth in agricultural output.
He also advised the government to support the manufacturing sector to guarantee improved output that can reduce the intensity of too much money, chase after fewer goods, and further diversify the country’s revenue sources.
The expert said that this can only be achieved by deliberately and sincerely collaborating with the productive sector to grow the non-oil sector.
Rising Prices of Foodstuffs and Ineffective Economic Policies in Nigeria
By Ajibola Olarinoye