Despite the disbursement of N1.09 trillion in eight years by the Central Bank of Nigeria (CBN) to boost staple foods production in the country, the average prices of yam, rice, and garri have risen the most during the period, according to data from the National Bureau of Statistics (NBS).
Prices of the three products have risen by over 200 percent in the last eight years, contributing significantly to the surge and double-digit growth in headline inflation over the period.
Godwin Emefiele, former CBN governor had during the last monetary policy meeting said the apex bank has allocated N1.09 trillion to farmers under the Anchor Borrowers Programme (ABP), with rice growers accounting for the highest percentage of recipients of the money.
The ABP, targeted at making Nigeria self-sufficient in rice, cassava, fish, wheat, palm oil, and other commodities, has been heavily linked with corruption and has failed to realise its objective.
According to NBS selected food prices report across Nigeria’s 36 states, the average price for one kilogram (kg) of yam tuber rose by 298.4 percent to N444.6 in April 2023 from N111.6 in January 2016, one kg of rice imported rose by 274.3 percent to N781.5 from N208.8 and one kg of white garri sold loose grew by 207.5 percent to N362.5.
These staple foods, which are everyday meals for most consumers, have contributed to the double-digit growth in the headline inflation rate, worsening the living conditions of cash-strapped consumers in Africa’s biggest economy.
Data from the NBS also show that the double-digit inflation rate started in February 2016 at 11.38 percent from the single digit of nine percent in January of that year.
And since then, it remained in double-digit territory at 22.22 percent in April 2023, one of the highest in the world. Before inflation got to double-digit territory, it was previously in that territory in December 2012 (12 percent).
Food inflation which constitutes more than 50 percent of the headline inflation rate has more than doubled from 9.78 percent in May 2015 to 24.61 percent in April 2023.
“Since February 2016 to date, the country has recorded a double-digit monthly inflation rate, with an adverse effect on the size of its middle class,” Chinyere Almona, director-general of Lagos Chamber of Commerce and Industry, said.
“Furthermore, the inflation rate of 22.22 percent is the highest in about 17 years, with significant and worrisome impacts on both the household and business sectors,” she added.
She said apart from eroding purchasing power, it has led to inventory stockpiles. “If left unchecked, the high inflation may further constrain production, lead to a steeper rise in poverty figures, frustrate economic growth, and lead to higher unemployment and non-competitive exports, especially in the sub-region,” she said.
She recommended government implementation of fiscal measures, such as reducing/removing taxes on staple food items to protect the most vulnerable as well as spur demand-side growth.
Also, a piece of egg rose by 198 percent to N88.2 percent, one bottle of evaporated canned milk increased by 187.6 percent to N378.8, one kg of brown beans sold loose grew by 158.7 percent to N615.7, one kg of frozen chicken rose by 155.5 to N2,853.2 and a 500g sliced bread rose by 138.9 percent to N577.4.
Food inflation which constitutes more than 50 percent and has been the main driver of headline inflation rate has more than doubled from 9.78 percent in May 2015 to 24.61 percent in April 2023.
“Higher prices of local staples such as rice, bread, yam, and wheat, especially in non-rural areas, is estimated to have pushed an additional five million Nigerians into poverty between January and September 2022,” the World Bank said in a recent report.
Experts have blamed the surge in food prices on some of the unorthodox policies such as the border closure policy and FX restriction on some importers of certain commodities among others.
A 2022 report by SB Morgen, titled ‘Nigeria’s history of inflation: A tale of the destruction of value’, identified the 2019 border closure policy, high import tariffs, and the current exchange rate regime of the CBN as major factors stifling supply, thus fuelling a surge in prices of various commodities.
Incomes have declined to $2,065.7 in 2021 from $2,679.6 in 2015, data from the World Bank show, and a continuous spike in prices is reducing the ability of Nigerians to afford some of the necessities of life such as food, water, shelter, and clothing.
All these have contributed to an increase in poor people to 95 million in 2022 from 70 million in 2016, according to the World Bank.
“The minimum wage, which was $82 in 2019, had dropped to $26. Consumer price inflation had heightened, making it one of the highest in the world,” it said in its latest Nigeria Development Update report.
Last year, the NBS put the number of Nigerians living in multidimensional poverty at 133 million, compared to 82.9 million considered poor in 2019 by national standards.
When people cannot meet the basic necessities of life, they will resort to social vices such as kidnapping, which is now a new business in Nigeria, Damilare Asimiyu, a senior analyst at Afrinvest Securities Limited, said.