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Nigerians pay most for food since 1999

Nigerians pay most for food since 1999

Nigerians are paying the most for food under this administration than they have in the last 22 years (1999). No fewer than 63 percent of Nigerians spend over 70 percent of their income on food as inflation rises spontaneously under the regime of President Muhammadu Buhari, marking the highest since 1999.

When President Buhari took office in 2015, he promised to diversify Nigeria’s oil-denominated economy by investing more in agriculture and encouraging farming. The government aimed at food self-sufficiency and increased foreign exchange earnings.

Despite the administration’s professed commitment to developing the agricultural sector, and indeed investment worth over N862.4 billion in the sector, agriculture has grown at the weakest rate under the Buhari administration than any other government since the return of democracy in 1999.

The sector has grown at an average of 15-16 percent in the past six years. This is according to data from Statisense, a data consulting firm.

By comparison, the sector grew by 133 percent under the Obasanjo administration; 19.1 percent under President Musa Yar’Adua’s short tenure and 22.2 percent under Goodluck Jonathan’s government.

In terms of the agricultural sector’s contribution to the GDP, the Buhari administration has so far done better than only the Jonathan administration, based on an analysis by Statisense.

Data evaluated by the firm show that the sector contributed an average of 27.5 percent under President Obasanjo, 25.6 percent under President Yar’Adua, 21.75 percent under President Jonathan and 21.90 percent under President Buhari.

The firm reveals that food inflation rate has increased by 142.2 percent in this current regime compared with rates of previous regimes in the last 22 years.

Read Also: Nigerians hurting as food inflation exceeds global record

“The rate of food inflation in Nigeria is at its worst under the regime of President Muhammadu Buhari, when compared to previous administrations,” the firm states.

The report further details the pattern of food inflation since 1999, which showed that the food inflation rate in the country had grown by 1,083 percent in about 22 years.

Data from the firm note that food inflation in the country grew by 94.1 percent during the Obasanjo’s administration of eight years, 47.6 percent during the Yar’Adua’s administration of three years, 60.3 percent during the Jonathan’s administration of five years, and 142.2 percent during the current regime.

The Emir of Kano, Aminu Bayero, in July urged the President to pay more attention to the problems of security, poverty, and food inflation in the country.

He commended the President for carrying out so many infrastructure projects in the state and across the nation in spite of the global economic meltdown caused by the Coronavirus pandemic, but urged that more attention be paid to the problems of security, poverty and food inflation.

Ken Ife, an economic policy analyst for the World Bank and UNIDO, states that a lot still needs to be done, especially in meeting local demands for consumer goods both as a lifestyle essential and as an important driver of economic activity.

“The consumer goods sector, like others, is having its fair share of pandemic induced challenges including forex scarcity, rising inflation and import bottlenecks,” he says.

“These, combined with a shrinking disposable income, have made many foreign products, which hitherto posed a fierce competition to local players, out of reach for many consumers,” he states.

John Akerele, an agribusiness expert, states that Nigeria is currently experiencing extremely high food inflation rate largely because of insecurity and the poor economic situation in the country.

“Insecurity in the North, where most of the agricultural produce from Nigeria come from, has prevented farmers from going to the farm.

“When farmers can’t farm at the large scale they usually would, it means harvest will be lean and there will be limited produce which more money will then be required to purchase,” he says.

The rising prices of food staples are pushing many households below the poverty line. Based on the selected food price watch data for September 2021 released by the National Bureau of Statistics (NBS), major consumer staples showed significant increases year-on-year. Though food inflation has been trending down in recent months, food prices are still on the rise.

This is because the descent in food inflation has been largely due to base effects and not improved fundamentals. Despite the recent moderation in the food prices month/month, Nigeria is still far from averting a food crisis.

This is mainly because the use of fertilizers by farmers has been limited given the rising costs of fertilizers, further exacerbated by the ineligibility to source FX from the official market in importing fertilizers.

The food supply chain disruptions caused by the pandemic translated to an increase in price across food items in the country. Insecurity in the country, ranging from incessant attacks on farmers by herdsmen to banditry and kidnappings, have further worsened the situation, leading to a greater risk of food crisis.

The closure of the borders also contributed to the increase in food prices. However, despite the reopening of the land borders, food prices continue to rise.

According to Fitch, the average Nigerian household spends above 62 percent of its income on food, and the figure is substantially higher for the 83 million Nigerians who live below the poverty line. Also, local production still lags behind significantly when compared with domestic consumption.