• Monday, May 20, 2024
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Nigeria sees fastest yearly spike in food prices as poverty deepens

food market

Border closure, Covid-19 disruptions and recent #EndSARS protest, which took a violent turn two weeks ago, have led to the fastest yearly rise in food prices as poverty rate continues to accelerate in Africa’s most populous nation.

The average food prices of key staples across major cities in Nigeria have surged by over 50 percent in the last one year, causing food inflation to hit 16.6 percent in September – highest in 30 months.

This is happening at a time the country’s poverty rate is nearly 50 percent due to a ‘command-style’ economic management, bleak oil future and pandemic that has continued to ravage the world.

It also coincides with a period of 56 percent unemployment and underemployment, according to the National Bureau of Statistics (NBS), with 14 million jobless youths agitating for a better life.

BusinessDay survey at some markets in Lagos, Abuja, Port Harcourt and Onitsha shows that a 50kg bag of local parboiled rice sold for an average of N17,000 in July 2019, now sells for an average of N28,000, indicating a 65 percent increase.

Similarly, a 50kg bag of foreign rice, which was sold for an average of N14,000 before the border closure, now goes for N32,000 at Lagos markets. This shows a 129 percent increase in 14 months. In Onitsha and Aba, South-East Nigeria, a 50kg bag of rice goes for between N28,000 and N35,000 today.

“Food prices started galloping when the government shutdown the borders last year. The pandemic further quickened rise in food prices and, now, the looting and curfew are fuelling another increase,” Haruna Mohammed, a tomatoes seller at Mile 12 Market in Lagos, states.

“Traders and farmers in the North are afraid that looters will attack their trucks and loot their produce, so they are reluctant to take food items to the South-West, South-East and South-South regions,” Mohammed further notes.

He explains that curfew imposition in some states has worsened the situation, thus causing scarcity of food items as only a few commodities find their ways to markets in those regions.

Likewise, the burning down of markets and looting of warehouses of businesses have made food prices in the country to make rapid climbs, a market leader in Abuja says.

According to market survey, a 25-litre gallon of vegetable oil goes for N17,500 today in Lagos, as against N10,500 a year ago, indicating a 67-percent price rise in 14 months. On the other hand, a 25-litre gallon of palm oil now sells for N14,500 as against N9,000 in July 2019, representing a 61-percent price increase.

Also, a big basket of tomatoes that was sold for N6,000 last year is now being sold for N15,000 in Lagos, representing a 150-percentage point increase in price. A small basket of tomatoes sold for N4,000 in Lagos markets last year now goes for N8,500, indicating a 113-percent price increase. It is cheaper in Kano and Kaduna because of competitive advantage, but it is 10 to 20 percent higher in Port Harcourt and Abuja.

More so, a 100kg bag of onions now sells for N80,000 in Lagos markets as against N30,000 sold a year ago, indicating a 166-percent rise in price.

Also, a 10kg carton of frozen turkey now sells for N19,000 in Lagos as against N12,500 sold a year ago and N15,500 sold a month ago, indicating a 52-percent and 23-percent rise in prices, respectively.

Furthermore, a 10kg carton of local frozen chicken now sells N12,500 as against N9,500 sold a year ago and N10,000 a month ago, while a carton of foreign frozen chicken now sells for N17,000 as against N11,000 sold a year ago and N,12,000 sold a month ago.

In Oil Mill Market in Port Harcourt, a 50kg of local parboiled rice sold for N17, 500 last year and N30,000 last month, but it now sells for N33,500. This shows a 91-percent and 12-percent rises in price, respectively.

Foreign parboiled now sells for N38,500 as against N16,000 sold a year ago and N35,000 sold last month.

A big basket of tomatoes at the Port Harcourt market now sells N15,500 as against N7,500 sold last year, while a bag of pepper now sells for N15,000 as against N9,000 sold a year ago.

A big basin of garri now sells for N5,500 as against N2,500 sold last year.

In Wuse Market in Abuja, a 50kg bag of local parboiled rice, which was sold for an average of N17,000 a year ago, now sells for an average of N27,000.

Also, a 50kg bag of foreign rice, which was sold for an average of N14,000 last year, now sells for N37,000.
A 25-litre gallon of vegetable oil goes for N18,000 now as against N10,500 14 months ago, while a 25-litre gallon of palm oil now sells for N15,500 as against N9,000 sold last year.

“No matter how much you take to the market, you still cannot buy anything because prices have kept escalating,” Ronke Ademola, a teacher and a mother of two, says.
“The government is not even doing anything to address the issue of food price hikes,” she notes.

Nigeria is poverty capital of the world, according to World Poverty Clock of the Brookings Institute.

The economy has been in shambles and GDP per capita has been declining every year since 2016, a sign that the economy is unable to provide sufficient opportunities for its rapidly growing population. Nigeria’s GDP fell by 6 percent in the second quarter of 2020, but there is yet no clear-cut plan to eliminate poverty and unemployment.

“It has been difficult for Nigerians and purchasing power keeps eroding. People can hardly feed properly owing to the current economic situation we are experiencing,” Abiodun Olorundenro, manager, Aquashoots, states.

Border closure has significantly failed to improve local production, but has enriched few who are benefitting at the majority of consumers’ expense.

The Lagos Chamber of Commerce and Industry has asked the Federal Government to re-open the Nigeria-Benin Republic border to cut rising prices and poverty. But the Federal Government seems adamant despite the proposed start of the African Continental Free Trade Area (AfCFTA) agreement in January 2021.

“The best bet for Buhari is to re-open the border to allow free flow of goods and food. Then, make local producers competitive. You do not make them competitive by shutting the borders, because you are shielding them from competition, which is a bad strategy. If you close the border till 2025, there is no evidence that local production will rise,” one analyst notes.

The foreign exchange management has also attracted criticism from several quarters. With oil price lows, foreign exchange inflows have declined by over 40 percent in the last two years, resulting in acute dollar scarcity in the economy.

However, the government has focused on the demand side, which has led to worsening scarcity that has further widened inflation and inequality. “We believe demand management strategies alone are not sustainable solutions to the recurring foreign exchange crises. It is thus imperative to address supply side issues. This could be policy related and could also be related to fixing the structural factors impeding output and competitiveness in the economy,” Toki Mabogunje, president of the LCCI, told journalists at a press conference in Lagos recently.