What SBM’s Jollof index says about inflation in Nigeria’s regions
…Onitsha, Awka overtake Lagos as cheapest place to prepare meal
For the first time in four years since SBM Intelligence, an arm of SB Morgen, started tracking prices of key household items across major markets in Nigeria, Onitsha and Awka collected the mantle of the most pocket-friendly cities to cook jollof from Lagos.
According to SMB Intelligence, an organisation devoted to the collection and analysis of information, the two cities in Anambra, a state in south-eastern Nigeria, attained the position in April 2019, overtaking Lagos which occupied the position since 2015 when the research firm started tracking the data.
“For the first time since we began tracking the index, Lagos is no longer the most pocket-friendly city to cook jollof. Onitsha and Awka in Anambra State have taken the mantle to become the cheapest region to cook jollof in the markets we tracked,” SBM said.
Onitsha and Awka were able to break the almost five-year record due to the high level of farming activities recently reported in Anambra State.
According to SBM Intelligence, the people in the region produce more than they consume, which allows them the opportunity to take the excess to the market.
“The price of making jollof in the South-East has trended downwards because asides from meat that is not a large-scale business for the people from South-East, many people in the zone farm every other food item,” SBM said.
According to the SBM data analysed by BusinessDay, Nigerians currently spend between 56 percent and 60 percent of their income on food on the average. This, according to the report, is among the highest in the world.
Thus, reductions or increases in the price of food have an outsized impact on the quality of life of Nigerians, and by extension, on how much Nigerians have as income to allocate to other essentials such as clothing, housing, transportation, healthcare and schooling, and then discretionary income.
“We believe that it must be a strategic imperative for the government of Nigeria at all levels to make food cheaper for Nigerians,” SBM recommended.
According to the report, the national Jollof Index has followed a similar path as inflation rate, as not only has the price stabilised but it started to decline in the early months of 2019.
Figures by the National Bureau of Statistics (NBS) as analysed by BusinessDay revealed that Nigeria’s inflation rate has decelerated for the third consecutive month in March 2019 to reach its lowest level in six months.
The CPI, which measures the composite changes in the prices of consumer goods and services purchased by households over a period, slowed by 11.25 percent on year-on-year (yoy) basis in March 2019, representing a 0.06 percentage points drop from 11.31 percent recorded in February 2019.
This was largely driven by the continuous decline in food inflation, which dropped for the fourth straight month to 13.45 percent in March from 13.47 percent in February, even as core inflation, which excludes the prices of volatile agricultural produce, also declined by 9.5 percent from 9.8 percent.
“Nigerians continue to manage funds by buying ingredients in smaller bits as opposed to bulk buying and storing which may reduce cost of the foodstuff,” SBM noted.
Of all the jollof-making ingredients tracked by SBM, only one was the same price across all the 11 markets they tracked in six states across the country – tinned tomatoes, at N70 for the small tin.
The research firm said the price difference of foodstuff across different cities in Nigeria is mainly found in the logistics of moving the products.
“We also must fix our transportation and logistics of moving foodstuff across the country. For instance, eight small pieces of tomatoes cost only N50 in Kano. A mere five hours away in Abuja, the same eight tomatoes cost N200, four times their Kano price,” SBM explained.
Further analysis of the regional survey by SBM revealed that from April 2018 onwards, the price disparity in food items in markets like Wuse and Nyanya in Abuja became much wider, and by February 2019, it cost 25 percent more to make jollof with ingredients bought from Wuse market than it did in Nyanya market.
In the North West, where SBM visited Kano’s Sabon Gari market, prices stabilised and dropped at a quicker rate than the national average since October 2018, experiencing a 5 percent drop.
According to the price-tracking organisation, it visited the markets in the South West,
specifically two markets in Lagos as well as two in Ibadan. SBM said in the report that the prices in Ibadan were higher than those in the Lagos markets, with markets in each city essentially converging, but having only very slight disparities.
“The key ingredients that drive the difference in Lagos and Ibadan are vegetable oil and protein (beef and turkey), all being higher in Ibadan than in Lagos,” it said.
Lastly, the firm’s visit to two markets in Calabar – Bayside and Municipal – located in the South-South region revealed that prices have been on a sharp and steady decline. According to SBM, the key ingredient that has declined in price in the region is rice, after seeing a huge spike in price from April to June 2018.