It is trite that Nigeria’s economy faces significant challenges due largely to elevated inflationary pressure, the removal of subsidies, and currency rate devaluation, all of which have severely impacted household well-being. Other challenges include rising farmer-herder clashes, natural disasters, and greed-induced factors. The removal of petroleum subsidies in 2023 further exacerbated the situation, increasing transportation and production costs, thereby compounding the financial strain on households. These economic shocks disrupt income levels, purchasing power, and consumption patterns, acting as abrupt disturbances to economic stability. They have exacerbated existing vulnerabilities, deepening inequalities and putting families at greater risk of food insecurity, highlighting the urgent need for comprehensive policies to address these issues and support the most affected segments of the populace.
“This inflationary pressure has eroded purchasing power, making it increasingly difficult for households to afford a variety of nutritious foods, thereby exacerbating the food insecurity situation.”
Recent economic shocks
In recent years, Nigeria has faced a series of economic shocks that have significantly impacted household livelihoods. These shocks have not only eroded purchasing power but have also heightened food insecurity, disproportionately affecting low-income and vulnerable populations across the country.
The country has experienced a sharp rise in inflation, particularly affecting food prices, which have increased disproportionately compared to income levels. NBS data reveals that supply chain disruptions, higher manufacturing costs, and fluctuations in the global market have driven food inflation to unprecedented levels. As a result, many families have been forced to cut down on food expenditures, often sacrificing dietary diversity. This inflationary pressure has eroded purchasing power, making it increasingly difficult for households to afford a variety of nutritious foods, thereby exacerbating the food insecurity situation.
The removal of gasoline subsidies has further strained the economic situation for families, as this policy change aimed to reallocate government spending. The elimination of these subsidies has led to higher transportation costs, which have been passed on to consumers in the form of increased food prices. This impact is particularly pronounced for low-income and rural households, who already struggle with limited financial resources. According to NBS (2024), the removal of subsidies has had especially severe consequences for staple foods like rice and beans, which are essential to the daily diets of many Nigerians. Additionally, the devaluation of Nigeria’s currency has caused a significant rise in the cost of imported food commodities. GHS statistics indicate that families are increasingly opting for local alternatives due to the high prices of imported goods. However, this shift has not been without challenges, as the availability and quality of local foods can be inconsistent. Consequently, the combined effects of inflation, subsidy removal, and currency devaluation have intensified the food security crisis, underscoring the need for targeted economic and social policies to support vulnerable populations.
Understanding how households adapt their food consumption patterns in response to these shocks is critical for crafting effective policy interventions. The 2024 National Bureau of Statistics (NBS) General Household Survey (GHS) Panel Wave 5 provides invaluable insights into these dynamics by capturing detailed data on household expenditures, food consumption, and coping strategies. This report offers a robust foundation for analysing the interplay between economic challenges and food security, guiding policymakers in designing targeted measures to alleviate the burden on households and foster resilience amidst ongoing economic uncertainties.
Read also: How Nigeria can move from consumption to production-driven economy – AFDB
Food insecurity in Nigeria
The current state of food security in Nigeria, according to the NBS GHS survey, paints a worrying picture, with over 60% of families expressing concerns about their ability to afford adequate food in the past year. The accessibility and availability of food remain significant issues, influenced by regional differences. Urban households, while facing higher living costs, benefit from access to a wider variety of food options. This is in stark contrast to rural families, who primarily rely on subsistence farming and consequently have more limited food choices. These disparities highlight the complex nature of food security in Nigeria, where geographical location plays a crucial role in determining access to sufficient and diverse nutrition.
The challenges exacerbating food insecurity are deeply rooted in socioeconomic inequalities. The NBS (2024) reports that rural families are particularly vulnerable due to lower income levels and inadequate infrastructure, which restrict their access to food. Moreover, regional disparities are pronounced, with the northern regions experiencing higher levels of food insecurity compared to the southern parts of the country. This north-south divide underscores the need for targeted interventions that address the specific needs of these regions. Efforts to improve infrastructure, increase income opportunities in rural areas, and reduce socioeconomic inequalities are essential for mitigating the impact of food insecurity and ensuring a more equitable distribution of resources across the country.
Analysis of General Household Survey (GHS) findings
The NBS GHS Panel Wave 5 reveals significant shifts in food consumption patterns among Nigerian households, driven by economic shocks. Many households have reduced their intake of protein-rich and diverse foods, increasingly relying on cheaper staples to manage rising costs. Vulnerable households, particularly those in lower-income brackets, report a decline in meal frequency, underscoring the severity of food insecurity.
Regional disparities are evident, with rural households more affected by price hikes due to limited access to alternative income sources, while urban households face heightened costs from inflation-driven price surges. The survey highlights stark socioeconomic differences, with low-income househfood consumption patterns in Nigeriaolds allocating a larger proportion of their earnings to food, further straining their budgets. Overall, the findings emphasise the erosive impact of rising food prices on purchasing power, disproportionately affecting Nigeria’s most vulnerable populations.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
