Tackling Food Price Inflation, The need for coordinated response by state governors

This article canvasses the viewpoint that state governments should wholeheartedly support the successful implementation of the ongoing economic reform programme and that they should do so in a coordinated manner because they are major beneficiaries of the programme—through monthly allocations from the federation accounts that have doubled since the largely successful attempt to remove fuel subsidies in May 2023.

Since the February 15, 2024, meeting between the President and state governors on ways to ameliorate the current economic hardship, a number of state governors have announced measures meant to address the pervasive cost of living crisis. These measures cover transportation, healthcare, food prices, security, housing, and road infrastructure; clearing large tracts of land for farmers at a subsidised rate; preparing for the next planting season; setting up a multi-billion-dollar intervention fund; inaugurating a food security committee; and instituting food subsidies for poor residents.

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Granted that the economic situations in the various subnational states may not be exactly the same, it is, however, obvious that the responses by the state governments have in some cases not demonstrated the sense of urgency needed to address the immediate cost of living challenge represented by high and unyielding food price inflation.

It is therefore necessary for state governors to come together under the aegis of the Nigerian Governors Forum to design an intervention template that will be flexible enough to accommodate the individual realities in each state while at the same time setting a certain minimum standard for intervention.

 “it is, however, obvious that the responses by the state governments have in some cases not demonstrated the sense of urgency needed to address the immediate cost of living challenge represented by high and unyielding food price inflation.”

The intervention template could be defined by principles such as the ones stated below:

1. Agree on a minimum percentage of monthly Federation Account Allocation Committee (FAAC) allocation all state governors will commit to ameliorating the economic hardship caused by the reform programme

2. Agree on three key areas of intervention, which are food prices, transportation costs and cost of healthcare.

3. All state governments should commit more directly and more substantially to agricultural production in their states, especially southern states whose attitude to agriculture has hitherto been largely ambivalent, with a few exceptions.

This they can do by committing not less than 10 percent of their annual budget to agriculture, through subsidised land clearing and tractor hiring programmes, the supply of subsidised agricultural inputs like fertilisers, pesticides, and herbicides, and the provision of agricultural extension services.

4. Make special commitment to vulnerable groups to be directly impacted. These will include orphanages, old people homes, widows and the fatherless, and internally displaced persons (IDPs), where they exist. This is apart from general measures to bring down the cost of living.

5. Agree in principle on the possibility of joint bulk purchases of drugs and medications for public hospitals among states on the basis of geopolitical zones.

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6. And as much as possible, be guided by United Nations Sustainable Development Goals number 1, 2,3, 6 and 10 (No poverty; Zero hunger (No hunger); Good health and well-being; Clean water and sanitation; and Reduced inequality) in the planning and execution of the intervention programmes.

7. Seek technical assistance from international development partners like the United Nations agencies led by the United Nations Development Programme (UNDP); the European Commission, and major bilateral development partners like USAID and GIZ, among others. If the Nigerian Governors Forum can come up with a credible template for ameliorating the hardships Nigerians are currently going through, these multilateral and bilateral assistance agencies can even align their development assistance with it.

8. Collaborate with the Nigerian National Petroleum Corporation Limited (NNPCL), the Independent Petroleum Marketers Association of Nigeria (IPMAN), and other reputable companies in the Compressed Natural Gas (CNG) space to rapidly expand the installation and deployment of CNG for targeted interstate and urban goods and passenger transport vehicles.

9. Consider also a data-driven approach, leveraging on the robust data base of the Nigeria Bureau of Statistics.

The multidimensional poverty report prepared by the National Bureau of Statistics in 2022 revealed that 133 million Nigerians were multidimensionally poor, which is a combination of income poverty, education poverty, and poverty in access to basic infrastructure. That translates to 2 out of 3 Nigerians being multidimensionally poor in 2022. Of all multidimensionally poor people in Nigeria, 65 percent live in Northern Nigeria and 35 percent live in Southern Nigeria, and of the ten poorest states in Nigeria, nine are in Northern Nigeria. Nigeria’s multidimensional poverty index of 0.257 is one of the highest in Africa and globally. The current economic hardship would only have made the situation worse.

It is necessary to quote these poverty data so as to put the work the federal government and the subnational states have to do in proper perspective. It is not enough to hurriedly put together some palliatives, which barely scratch the surface of providing relief to the poor and vulnerable groups from the current economic hardship. It is necessary to gather relevant and available statistics about the socioeconomic conditions the majority of Nigerians are living under in 2024, design a structure or framework (the intervention template), and commit resources to implementing the intervention programme.

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The truth is, Nigeria has the necessary resources to cushion the effects of the present economic hardship. The proposed implementation of the conditional cash transfer for fifteen households by the federal government is one of the key ways to do this. Another is a concerted and coordinated effort by state governments.