• Monday, December 04, 2023
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Nigerians spend 60% more for a pot of Jollof rice than 3yrs ago – SBM

Jollof rice

Nigerians are spending 60 percent more on average for a family pot of Jollof rice than they did three years ago, according to the 2019 July Jollof Index by SBM Intelligence, Nigeria’s leading geopolitical intelligence platform, and experts have blamed it on the partial closure of the borders.

Ayodeji Ebo, managing director, Afrinvest Securities Limited, said the spike in the Jollof Rice Index over the past three years mirrors the rise in the general price of food products.

“The recent partial and subsequently full border closure can be blamed for the current rise in price of rice, a major variable in the index,” Ebo said.

“The land borders account for the major channel for importing rice into the country which will have significant weighting on the index. With food accounting for over 50 percent of total trades (N300 billion) within the Seme, Cameroun and Benin borders as at 2014, the border closure will have significant impact on food prices,” he said.

The SBM Jollof Index is a composite index that tracks how much it will cost to make a pot of Jollof rice across 12 markets in seven states in the six geopolitical zones for a family of five or six, the average rural and urban family size in Nigeria.

The July 2019 edition of the SBM Jollof Index chronicled the trend of the index over the three years from July 2016 to June 2019.

“Since April 2019, there has been a slow rise in the Jollof Index. Even during the Sallah festivities, this slow increase trend continued. However, from late July and August, the Jollof Index has been driven to the highest it has ever been, eclipsing even the 2016/2017 highs, fuelled by the drastic measures the government took to curb smuggling of rice and inadvertently poultry and vegetable oil,” the report said.

In August, Nigeria announced the closure of its land border with Benin Republic in order to tackle cross-border smuggling of rice and other commodities.

From July-September, rice, groundnut oil, turkey and chicken were the major food commodities that increased by market price.

Before the border closure, a bag of imported rice cost N14,500-N15,000 while a bag of locally produced rice cost N13,500 but after the closure, a bag of imported rice now costs N26,000 and a locally produced bag of rice cost N18,000- N19,500.

Also, the price of a kilo of imported turkey has increased by 30.8 percent to N1,700 from N1,300, while a kilo of imported chicken increased by 36.4 percent to N1,500 from N1,100.
It was also noticed that the price of the Nigerian chicken has increased. Around the markets surveyed, the prices of major breeds of local chicken such as a whole broiler and old layer increased by 16.7 percent from N3,000 to N3,500 and by 17.6 percent from N1,700 to N2,000, respectively.

Since mid-2018, there had been a general decline in the Jollof Index as the effects of the recession receded, and inflation dipped from highs of 2016/2017, bringing some respite to Nigerians who already spend as high as 60 percent of their income on food.

In 2016, the US Department of Agriculture said that Nigeria spends over half of its household income on food, the highest in the world.

Ibrahim Tajudeem, head of research, Chapel Hill Denham, said that Nigerians love Jollof rice and that if they have to spend 60 percent more to eat Jollof rice, they are going to cut down on some other items that they consume which means that an increase in the cost in the major element of Jollof will lead to a reduction in the demand of other goods and services.

Apart from the increase in Jollof, inflation in Nigeria rose to 11.24 percent in September from 11.02 in August, which was its lowest in almost four years, according to the National Bureau of Statistics inflation report released on Tuesday.

Also, food price growth accelerated for the first time in four months rising by 34 basis points to 13.51 percent year on year in September. Food constitutes over 50 percent of the consumer price index.

With Christmas being just two months away and Jollof rice being a major food for the celebration, Nigerians may spend higher at Christmas as a 50kg bag of imported rice could cost as high as N50,000 in December if the land borders remain shut.

Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers, said that Christmas will definitely be worse as many rice sellers are currently hoarding rice with plans to hike the price significantly in December and this was bound to impact cost of Jollof rice.

“I think people will opt for other substitutes like Spaghetti and local ball foods like pounded yam may be other options for consumers in December,” Akinloye said.