• Thursday, April 25, 2024
businessday logo

BusinessDay

Naira policy series: Prices of perishable produce fall on naira scarcity

Taming the food crisis: The bulk stops at the President’s desk

Prices of fruits, vegetables, and other perishable commodities have declined in most rural communities as demand continues to drop owing to naira scarcity.

Despite the deadline extension of the naira swap policy, cost-conscious consumers are finding it difficult to meet their daily cash needs for transactions and this is affecting demand.

The situation is forcing many to cut down on purchases as they are unable to find naira for their transactions as most of the businesses especially in the food sector are informal and still heavily cash reliant.

“I had to reduce the price of the tomatoes I brought from Kaduna to Lagos to sell as people were not willing to buy because of the naira scarcity,” Rabiu Musa, a farmer who was at the Mile 12 Market to sell his fresh tomatoes, told BusinessDay.

“Those that wanted to buy did not have the naira owing to the scarcity and I do not take transfers. I had to reduce my price so that I could sell it or I would lose everything as my produce is highly perishable,” Musa said.

According to him, the naira scarcity is negatively affecting his business. “Cost of inputs and transportation is going up daily because of fuel scarcity and now naira scarcity. How do we farmers survive all these?” he asked.

A survey at the Mile 12 Market shows that a big basket of fresh tomatoes which was sold for N12,000 two weeks ago now sells for N11,000 and traders attribute the decline to the scarcity of the naira notes.

The drop in the prices of perishable items is more in rural communities where the scarcity of naira is more severe.

In Mbaise community in Imo State, the price of a 25-liter gallon of palm oil dropped to N16,000 from N24,000 in two weeks as the naira scarcity intensified.

“Prices of fruits and cassava are just dropping because people are not buying owing to the scarcity of naira,” James Onyebuchi in Mbaise said.

“We haven’t seen much of the new naira notes here and the old notes have been deposited in the banks during the initial deadline. Now there is no cash whether old or new,” Onyebuchi said.

He added that the situation is forcing farmers with perishable food items to lower their prices so they can sell before they lose out completely.

Anthony Offiong, a farmer in Ikom, Cross River State, told BusinessDay that farmers who have perishable produce in Ikom are reducing their prices so that people can still buy.

Read also: Nigeria’s minimum wage fails to cover basic food items – Report

“Cassava and vegetables have short shelf-life and we need to sell them quickly but people cannot buy them due to naira scarcity.”

Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), said the naira problem could put the country’s N100 trillion component of its national GDP at risk.

“The crippling of business transactions at the distributive trade end amid the currency crisis would not only undermine the trade and agricultural sectors but would have a knock-on effect on the manufacturing value chain and the services sectors.

“This is because whatever is produced has to be sold. The trading end of the chain has been greatly disrupted by these crises,” he said.

Yusuf added that the trade sector contributes about 14 percent of GDP at an estimated N35 trillion while agriculture contributes 25 percent, valued at an estimated N62 trillion.