The most pressing socio-economic challenge in Nigeria today is the cost of living crisis. From the cost of food and healthcare to rent and transportation, everything has become so expensive for Nigerians. Since the sudden removal of fuel subsidies and currency floating in June 2023, the prices of almost everything skyrocketed, making many more Nigerians unable to afford their basic needs.
Food inflation in Nigeria has worsened steadily over the past few years. Driven by several factors, including the continuous farmer-herder crisis, which limits farming activities in many parts of the country, poor storage and transport infrastructure, which leads to high post-harvest damages and losses, a weak currency, as well as external factors such as the Russia-Ukraine war, just to mention a few.
The rapid rise in the prices of food items and the threat of food insufficiency prompted the federal government to declare a state of emergency on food security in July 2023. Unfortunately, little has changed since then as the food inflation rate went even higher, from 26.98 percent in July 2023 to 37.77 percent in September 2024, according to the National Bureau of Statistics.
The directives outlined in the declaration—such as including matters pertaining to food and water availability and affordability within the purview of the National Security Council, creating synergies between the ministries of agriculture and water resources, establishing a National Commodity Board to stabilise food prices through food reserves and land banks, and providing grains and fertilisers to farmers—have all been tried in the past and have largely failed.
Nigeria is not producing enough food!
As mentioned earlier, domestic food production is hampered by several factors. But an unarguable fact is that enough food is not being produced in Nigeria. For instance, according to 2016 figures from the Lake Chad Research Institute (LCRI), the domestic consumption of wheat in Nigeria was 4.2 million metric tonnes, whereas local production was a paltry 300,000 metric ns. It is a similar unpleasant situation with other staple foods such as rice.
This is perhaps partly responsible for Nigerians spending a huge proportion of their incomes on food.The most recent data compiled by the Economic Research Service of the U.S. Department of Agriculture show that Nigerians spend more than half of household expenditures on food. That is the highest in the world. This chunk of household income spent on food means that further increases in the prices of food have a severe impact on the people.
While declaring a state of emergency on food security is understandable considering the precarious situation the country finds itself in, many of the solutions proposed were short-term and government-centric, with little involvement of the private sector. Nigeria needs to focus on addressing the underlying issues preventing sufficient food production, such as insecurity, limited access to finance, and poor land administration, and prioritise investments in rural infrastructure and agricultural technology.
Duty-free food import as a way forward:
Nigeria’s major agricultural imports include wheat, fish, sugar, and milk. But the country also exports some agricultural produce, including sesame seeds, cashew nuts, cocoa beans, ginger, frozen shrimp, and cotton.
Due to the biting cost of living crisis and the high cost of food, the federal government in July announced a temporary suspension of duties and other taxes on the importation of selected food items including maize, husked brown rice, wheat, and cowpeas through both sea and land borders. However, more than 3 months after the announcement, the government is yet to implement this policy.
The Nigeria Customs Service (NCS) claims to be awaiting the list of beneficiaries and guidelines from the ministry of finance. But there are speculations that the Customs is delaying the implementation of the duty-free food import policy due to concern about the expected shortfalls in revenue generation. However, this raises the question of what the priority of the government should be: affordable food for the people or more revenue for the government?
Considering all the challenges occasioned by limited food production and the failure of past government initiatives, one would expect that the government through its relevant ministries and agencies would at least make it easier to import food at a time like this. Moreover, the African Continental Free Trade Area (AfCFTA) can be leveraged to import affordable food from other African countries while efforts continue to increase local production. On the basis of a free market, it is completely okay to import what we don’t produce in sufficient quantities while exporting things we produce in excess.
For most Nigerians, putting food on the table has become more difficult in recent times, and it is the duty of a responsive government to implement policies such as the duty-free import of selected food items in order to reduce the impact of the cost of living crisis on the people.
Stephen Oyedemi is operations director at Ominira Initiative for Economic Advancement, and a fellow of the Initiative for African Trade and Prosperity (IATP). His core interest lies at the intersection of technology, economic freedom, and human well-being.
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