Food, a basic need for human existence, is going out of reach for more Nigerians as the prices of yam, maize, rice, and fish have more than doubled in the last one year.
Add to this, an unemployment rate that is now ranked as the second-highest in the world — 23.2 million Nigerians, equivalent to the population of the Republic of Niger don’t have jobs. Another 15 million which is as big as the population of Somalia are underemployed. As such, the number of Nigerians who can afford basic food items is shrinking; their disposable income has been falling since 2015.
At the same time, the prices of basic food items are rising with no clear sign of slowing. And the COVID-19 pandemic has made things worse. The rate at which food prices are sold quickened at a disturbing pace of 21.79 percent in February, the highest on record. It shows how things are getting out of hand: the prices of more than 37 food items have increased in the last year based on the latest data from the National Bureau of Statistics (NBS).
The latest data from the NBS shows prices of nearly all staple food items from egg to rice down to garri and maize went up in a year. The price of yam, a popular staple that can be grated into flour, boiled, fried, or pounded, increased by 128.30 percent. The price of maize increased by as much as 73 percent. The price of rice, the most consumed staple, increased. Local and imported went up 22.15 and 29.67 percent respectively.
“Nigeria’s middle-class is increasingly disappearing. If you juxtapose the sustained drive in the prices of food and other commodities with stagnant income or most cases disappearance in income, you will see that the standard of living of many Nigerians has deteriorated,” said Ayorinde Akinloye, associate and investment researcher at United Capital Plc.
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“With the pandemic affecting further the income of Nigerians, the rate of contraction in the middle class would have accelerated between last year and this year. Hence, we have a larger bottom of the pyramid sort of market,” Akinloye said.
Nigerians are struggling to eat. The abrupt increase in the prices of most food items explains why in 2020, 5 out of every 10 Nigerians reduced their food consumption between July and December, in response to the pandemic.
Generating revenues in an ailing economy growing below the pace of population in the past five years has made fast-moving consumer companies adopt the strategy of packaging sachets to cater for more Nigerians falling into the bottom of the pyramid. Premium brands have also joined the train as they battle to keep a share of consumers falling income. For them producing goods in sachets to meet the increasing lower-end population appears inevitable if they must stay afloat. For these consumers, struggling to eat is not their only problem.
The sudden rise in the prices of virtually all staples mean food is becoming a luxury item for many Nigerians. In their struggle to eat they will spend more of their income on food at the expense of other basic needs, like health.
Africa’s biggest economy has been spared the worst of the COVID-19 pandemic, with 12,175 active cases and 2,049 deaths. Yet, falling sick could be costly as there is less money to spend on health.
“Nigeria is heading to a point where it is either you are poor or you are rich,” Damilare Ogunbiyi, a Lagos-based economist told BusinessDay.
“Many in the middle-class are increasingly becoming poor as income is fast falling while prices of food are rising abruptly,” he said
Food prices which have been the main driver of inflation are rising due to several factors. Supply chain disruptions, including the incessant attacks on farmers by herdsmen in the food processing regions as a major cause. High input costs such as fertilizers are another. An unstable naira due to the shortage of dollars to import inputs and a protectionist policy that shut the country’s land borders for months made a bad situation worse, affecting both imports and exports. And despite the various agriculture interventions of the Central Bank of Nigeria, unresolved infrastructure problems around the food supply chain outweigh the expected results.
Thus, more and more Nigerians, overburdened by increasing prices, struggle to eat.
Already, 4 out of 10 Nigerians live below N137,430 a year, according to NBS. And the country is 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.
That is the legacy 78-year-old President Muhammadu Buhari must contend with, a hungrier and poorer country, after overseeing two economic recessions in five years, despite promising to lift 100 million Nigerians out of poverty.
