Looming food crisis threaten 21 million in South-Eastern Nigeria

The threat of a looming food crisis anticipated to manifest sometime between the second and third quarter of this year has sent shivers down the spines of many Nigerians as the Nigerian economy currently battles multiple economic shocks along it’s path to recovery.

However, just like the proverbial “all fingers are not equal”, for the 21 millions Nigerians’ in the South-Eastern parts of the country, it’s rather, “all shocks/shivers are not equal” as they brace tighter for the incumbent storm masked as the ‘looming food crisis’.

Aliko Dangote, chairman, and chief executive of Dangote Group, at the 4th annual food processing and nutrition leadership forum in Lagos, warned that Nigeria should expect an outbreak of food scarcity in the next three months as adverse consequences of the Russian-Ukraine war begin to come home to roost.

He indicated that the war’s impact which began with the steep rise in wheat prices may soon spread to other foods commodities including maize and other components of input for industrial food production, triggering low production and low supply and subsequently scarcity which could translate into crisis.

Based on the selected food price watch data for February 2022, released by the National Bureau of Statistics (NBS), major consumer staples witnessed significant increases between January and February this year.

As expected, the steep price increases of the food items across various baskets has been consistent with the increase in food inflation which began soaring incessantly since the pandemic hit.

Read also Nigeria should expect food scarcity by June – Dangote

However, evidence from the NBS report revealed that prices of staple food items in the South-Eastern region pose a greater threat for it’s residents as it has more than doubled it’s fellow regional counterparts in the last 2 years.

The data also revealed that on a year-on-year comparison, food prices in this region grew by more than 45-50 percent on the average as compared to other regions which witnessed 30-40 percent price increases within the same period.

Femi Kehinde, Structuring and originating analyst at Africa Exchange (AFEX) told Businessday that Rural-Urban migration and stifled production and manufacturing activities in the region are the major catalysts to the surge in food prices evidenced in the report.

“Rural-Urban migration in that region has drastically crippled any hope for multiplier effect dynamics.

“There’s currently no viable manufacturing firm in the region. The region is and has been famous for its level of subsistent agriculture rather than commercial agriculture and this has driven most of the youths there to urban areas in search of greener pastures.

“A lot of Easterners have migrated to both the North and the West, hence the larger percentage of their contributions are reflected in these regions rather than their origins,” Kehinde said.

“When was the last time you went home?,” he asked. “That contribution expected from you has been diverted and growth (in the form of production) leaves the South-East at the mercy of these other regions which are developing”.

“Is there any place in the East one can call ‘food basket’ of even the region?,” Obinna Ahuchaogu, an Abuja resident who is a businessman told Businessday.

“Cassava, which we started has been taken over by Benue. We also are no longer into Yam. If I want to travel home now, I would rather buy yam here than buy there because it’s more expensive there because of its scarcity.

“The East is fast becoming a burial destination for deceased Easterners who were residents in either Northern or Western regions rather than the production hub it used to be back in the 80’s.

“The issue is that the region lacks available manufacturing companies or business opportunities drives up the level of unemployment in the region and as a result, migration tendencies heighten,” he said.

The lack of multiplier effect as a result of dampened productivity has eaten deep into the region’s core to the point of likening these regions with illicit activities.

Dami indicated how the region was ranked second nationally in terms of illicit activities.

“The level of unemployment in the region has groomed a significant number of fraudsters.

“When you remove Edo State, the next set of yahoo yahoo boys tormenting the country are from the East.

“The rest that aren’t into yahoo yahoo are strictly importers. That’s why prices of commodities (especially food) in these regions are usually high.

“Because of the high import dependent reputation, other regions capitalize on it by increasing prices of commodities exported to the region,” he said.

Looming food crisis also fueled by exit of investors

The wake of insecurity in the region has also deterred a lot of prospective companies from investing in the region.

Emeka Ucheaga, a financial analyst at Credit Direct told Businessday that the level of insecurity in the region has seen a lot of the company’s clients’ migrating from the region.

“We have witnessed many investors’ closing accounts of their branches at the East and migrating to either Lagos or it’s environs on the back of insecurity scare.

“This single factor has a very significant impact on how the region’s economic space would fare, not to talk of having constant transactions within the region. There definitely would be a spike in the prices of commodities in the region, not to even talk about food commodities,” Ucheaga said.

“That’s one of the reasons why most of the big industrial farms are located in either the West or the North.

“Unlike Obasanjo’s farm, have you heard of an Ucheaga farm or a Nwachukwu farm or an Okafor farm in these regions? There’s a reason why people aren’t investing in these regions,” he added.

David Ibidapo, a senior research analyst at AFEX in an interview with Businessday Indicated that the challenge witnessed in the region emanates from two major strategic standpoints.

He indicated that on one hand it is strongly correlated with the naira amount/value spent on individual food commodities in the region while on the other hand, was the relative proportion spent on those items (in percentages) relative to other items in the spending basket.

“The general sense is that, the closer you are to you are to subsistence, the greater your spending on food would be, as a proportion of your total spending.

“One could spend 70 percent of their income on food in Bauchi and still spend less money than someone in Anambra. The reason could be that either incomes are lower in Bauchi or food prices are lower in that region than in Anambra,” Ibidapo said.

He further indicated that the geographical location of the region also mattered a lot.

“Food prices naturally are expected to be higher in those regions as their geographic location are located farther from the food baskets of the country than the North,” he said.

“Also, the inclusion of transportation cost and level of insecurity in these food baskets also play a crucial role in determining their landing costs when they arrive at their various destinations,” he added.

He however noted that the two factors stated were not entirely absolute as there are other regional economic interactions that come into play during the course of these transactions that also contribute to these price elevations in the region.

Read also: Global food prices hit record high on Russia-Ukraine war – FAO

Data from the February 2022 food price watch data by the NBS showed that the average price of brown beans in the South-East stood at N809.66 as compared to the N289.27 which it was sold for in the North-Eastern parts of the country. Beef in the South-East sold for an average of N2,428.80 while in the North-East it sold for N1,349.19; Bread sold for N550 in the South-East while it sold an average of N400 in the North.

White garri averaged N401.22 in the South-East meanwhile in the South West it averaged N299.64.

Wheat and wheat related commodities averaged N1,277.93 in the South East while in the North Central wheat averaged N853.01.

A tuber of yam which averaged N191.71 in North Central went for N403.69 in the South-East.

While relating it to the national space, Ibidapo indicated that the persistent increase in the prices of food items despite the protectionist measures implemented by the government suggests that local production still lags in consumption significantly.

“Considering the weak harvest season due to the impact of the global pandemic amidst higher distribution cost linked to higher PMS prices following the deregulation of the downstream sector, we believe price of food items will continue to trend upwards.

“We also expect the pass through impact of the devaluation in the local currency to put further pressure on imported food inflation.

“Overall, we think the government needs to review the protectionist measures in place in order to avert the looming food crisis which is gradually becoming a reality,” Ibidapo said.