Food prices in Africa’s most populous nation are to keep surging as naira – the country’s currency – has weakened to a three-year low in the parallel market, compounding the challenge of worsening insecurity, which already affects local food production.
This was the view of experts who spoke at the 2021 edition of BusinessDay’s Agribusiness and Food Security Summit Thursday, who reiterated that the worsening state of insecurity in the country continued to obstruct farming activities and deter agric investments in key crop-growing states, while putting existing agribusinesses in constant peril.
They also noted that prices of farm inputs ranging from improved seeds, fertilizers, herbicides, pesticides, and poultry feeds would further accelerate due to the dollar crisis and shortfall in supply, forcing another upsurge in the prices of staple foods across the country.
“The skyrocketing prices of food is a factor of the low purchasing power of naira, as most of our farm inputs are imported and FX is required to import them,” said Kabir Ibrahim, national president, All Farmers Association of Nigeria (AFAN), during a panel discussion on Security Dimensions of Food Insecurity.
At the time of filing this report, data from abokifx.com showed the naira exchanged at 525 to a dollar at the parallel market, from a previous rate of 500 on June 28 – the day the Central Bank of Nigeria halted dollar sales to Bureau De Change (BDC) operators.
This situation has widened the spread between the official rate at N411 per dollar and the N525 parallel market rate to 28 percent.
Africa’s biggest economy is import-dependent and due to FX volatility and insecurity among other issues, food prices have been making rapid climbs since August 2019 and are not likely to slow down soon.
“I have not visited my 1,000 hectare farmland in Katsina State since last year owing to the activities of bandits and kidnapping in that area. So, how can we feed ourselves if farmers are abandoning their farmland,” Ibrahim remarked.
He emphasised the need for the government to provide adequate security, ensure farmers can use findings of research institutes, and automate farm processes to ensure that farm inputs are produced locally and sold at a universal price if the country is to halt rising food prices.
Growth in the agricultural sector has been inconsistent and constantly slowing. In real terms, the sector slowed from 3.42 percent in Q4’2020 to 2.28 percent in the first three months of 2021.
Similarly, Nigeria spent N630.2 billion on food importation in the Q1’2021, compared with N262.1 billion spent in the corresponding period of 2020, a 140.5 percent increase.
Also speaking at the panel session, Suleiman Ladan, a lecturer at the Department of Basic and Applied Sciences, Hassan Usman Katsina Polytechnic, Katsina State, said the current insecurity crisis had significant implications for the country and might lead to a food crisis if nothing was done to address the issue quickly.
“Bandits and kidnapping have made farming almost impossible in major agricultural producing areas,” he said, and urged the government to address the issue holistically and as a matter of urgency to ensure food security.
On his part, Ramesh Moochikal, group CEO, TGI Agribusiness, said the Nigerian government had constantly focused on the production aspect with very little done to ensure the affordability and accessibility of agricultural commodities in the country.
According to Moochikal, a serious headway would have been achieved in the country’s quest for food security if the affordability of agricultural commodities was greatly considered.
He called for collaborative partnerships to boost food production in the country while urging the government to address the issues of banditry, kidnapping and terrorism threatening the country’s food security agenda.
Similarly, Salihu Musa Umar, CEO of Farmers and Herders Initiative for Peace and Development (FHIPD), urged Nigerians to see the issue of insecurity as a national issue and not as a regional one.
“As long as we do not see insecurity as a common problem, confront it and address it, we would be in a very serious food crisis,” he said.
He recommended that the government must deploy every possible human and material capacity to improve security in the country, end impunity, and fully implement the Livestock Transformation Programme to the fullest as well as ensuring that states implementing anti-grazing laws consider present realities to address the worsening security issues in the country.