In less than a year, the average prices of most staple foods like garri, maize, and beans, consumed by the average Nigerian have doubled.
This shows the ordinary Nigerian is getting poorer in the face of dwindling income and high unemployment rate as they can no longer afford these commodities.
Recent data on selected food prices by the National Bureau of Statistics (NBS) show that between March 2020 and March 2021, the average price of 1kg of white garri, maize, beans, and local rice has increased by 66.5 percent, 57.4 percent, 43 percent and 25 percent respectively.
“The average Nigerian spends more than 50 percent of their income on food items. So, a sharp increase in the price of these major staples is like a tax on the poor who spend a higher proportion of their income on food,” Omotola Abimbola, a macro and fixed-income analyst at Lagos-based Chapel Hill Denham said.
The insecurity situation such as the kidnapping of farmers from their farmlands in various parts of the country, obsolete agricultural practices, low level of agricultural mechanisation, supply chain disruption caused by the COVID-19 pandemic and the high cost of living are driving up food prices. According to NBS, food prices accelerated to 22.9 percent in March 2021, the highest on record and among the highest in the world.
Food is a basic necessity for human existence. In their struggle to eat and cope with the persistent increase in food prices, consumers have been pushed to reduce the number of times they eat in a day as five out of every 10 Nigerians (58 percent) reduced their food consumption between July and December 2020 in response to the pandemic.
Already, about four out of every 10 Nigerians live below N137,430 a year, according to NBS, which makes the country home to some of the world’s largest number of poor people.
With prices of basic items rising even amid a falling income, it will swell further the number of poor people, widen inequality, and heighten social upheaval.
“Intergenerational poverty is bound to happen if things don’t get better. When people don’t have money to save, it means there is no capital stock for the future, so future living standards will automatically be lower,” Glory Etim, an analyst at SBM said.
In order for the country to alleviate pressure on food prices, Damilola Adewale, a Lagos-based economic analyst suggests that insecurity challenges must be addressed, commodities in which Nigeria has a comparative cost disadvantage should be removed from FX exclusion list and implementation of policies that would attract investment in the processing value chain is imperative.
“Logistic constraint is another pressure point for food prices. Though the government is doing well in rail infrastructure, we need to find a way of connecting road and rail networks for efficient transportation of food from farms to markets,” he further added.
