Tayo Aduloju, the Chief Executive Officer of the Nigerian Economic Summit Group (NESG) has called for a collaborative effort among governments to address the increasing food crisis in the country, which according to him could lead to higher inflation.
This is as the nation’s inflation rate increased to 34.19 percent in June 2024, and food inflation at 40.87 percent on a year-on-year basis.
According to Aduloju who addressed the press on the quarterly media engagement of the organisation on friday, Nigeria currently cultivates far lesser land than before and this he said was affecting general food output. He noted that the Nation’s population was growing faster than its ability to produce food as output.
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“First, it’s a question of whether we have created enough food. It’s the availability of food at the scale we require? We’ve also pointed to all the security threats, we’ve broken security threats beyond human security to soil security, water security, land security, input security, so fertilizer, pesticides, etc. And pull that together to say that the system is under stress and it will be tackled with a system approach.
“There is also an affordability problem, what has been driving inflation is more than just the production of food, it is that the effects pass through on anything we import.
So even if the food was in the market, once we imported it, the pocket’s ability to afford it has diminished and that is a wallet problem.
“We think in the second half of the year that growth will improve if some of these things in the pipeline happen. Inflationary pressure will likely amplify if the food situation does not improve because, of course, if you look at the composite component of food inflation in the overall headline, it remains very high,” he said.
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Speaking on the 150-day Duty-Free Import Window for Food Commodities, suspension of duties, tariffs and taxes on the importation of certain food commodities recently announced by President Tinubu’s administration, Aduloju said that it is a short-term intervention to ensure that people don’t go hungry, adding that there is need to build a resilient food system in the country.
“Whilst it was received with mixed feelings, I think some people viewed it as an attack on the productivity side.
The truth is, if you go by the cultivation rate this year, we are not on track to produce enough food for ourselves this year. That’s what the numbers are showing.
“So it seems as if the intervention is a short-term intervention to ensure that people don’t go hungry. It’s a one-year response. I don’t think it’s a food system. We shouldn’t call it a food system response. It’s actually a one-year response. But ultimately, it’s not sufficient, we must get this food system back to work,” he said.
According to him, there is an ongoing engagement with state governments to about agricultural processes in 36 states, to ascertain the agricultural activities in states.
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Speaking further the CEO commended the government’s Order to introduce zero tariffs, excise duties, and VAT on specialised machinery, equipment and pharmaceutical raw materials, stating that if nothing was dome to reduce the cost of medicines in the country, it may lead to unmanageable health outcomes to a significant degree.
“And so we think the government is in the right direction with the pharma, health, value chain financing reforms and conversations. We think CBN will continue its inflation targeting and foreign portfolio investments will improve significantly if the government continues its signaling, especially if its stabilisation plan goes into real execution and it delivers on some of these executive orders.
“If they are well executed, we’ll see some ease in the system,” he added.
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