The silent crisis of increasingly expensive food, going out of reach

One major concern that most Nigerian households share in common today is the rapid increase in food prices.

A recent survey by BusinessDay showed that the prices of food items in Nigeria are at their highest levels ever as the country faces its worst food inflation since the fourth quarter (Q4) of 2017.

Food inflation reached 21.79 percent in February 2021, according to the National Bureau of Statistics (NBS), making it the highest since 2017 when it recorded a food inflation rate of 20.31 percent.

The rise has seen the prices of all classes of food jump almost on a daily basis, leaving Nigeria’s large population of middle and lower-income class citizens struggling to get food items and basic ingredients for cooking.

With prices of food accelerating at 21 percent and the economy growing at 0.10 percent, it exposes the silent crisis of food unaffordability that is at play in the country.

A bag of rice that sold for about N7, 000 around 2016 now sells for as much as N40, 000 for some brands.

A sachet of tomato that sold for N50 now sells for N150, while a loaf of bread has risen from N250 to N400.

A major food sector that has been particularly hit is poultry on which millions of Nigerians rely for their protein needs. A kilogramme of chicken that previously sold for N800 now sells for N2000, while a crate of egg that sold for N700 now sells for N1500.

Seyi, a seller, said about a year ago, “when things were still normal”, a bag of rice sold between N20, 500 and N25, 000.

By 2020, a bag rose to about N28, 000 and N30, 000. Lately, it has jumped to N40, 000 for foreign rice.

A market survey conducted by BusinessDay revealed how several factors have contributed to the rise in poultry prices, and how the government’s efforts have yielded little or no impact in solving the problem.

In an interview with some of the marketers, they stated that the rise in insecurity in the food baskets of the country is one of the major reasons for the hike in prices of food items in the country.

Poultry farmers, livestock feed processors and marketers also stated that the major reason for the rise in the prices of key ingredients for poultry feeds is as a result of the hike in prices of poultry products.

The supply of maize and soybeans has fallen steeply in recent months, they said, and a key reason has been insecurity that has put farmers off work last year, Covid-19 disruption, weather changes, and challenges with importation.

Obinna Chibuzor, a poultry farmer at Mararaba stated that “The maximum price we have noticed for the past 20 years ranges between N108, 000 to N110, 000 but now, I just came back from Abuja yesterday, I was told that it has gone up to N500, 000 per tonne which has never happened.”

At AMAC market at FHA in Lugbe, Abuja, Simon told Businessday that a crate of egg he used to buy for N1, 000, now sells for N1, 500. At Ogbete Market in Enugu State, buyers said as of October 2020 a crate of eggs sold for N950 but later increased to N1, 200 per crate in November.

Between 1999 and 2020, Nigeria produced more maize than it did at independence, data from the United States Department for Agriculture (USDA) say.

The country’s maize production figures in the last five years were the highest ever. Production rose from 10.10 million metric tonnes (mmt) in 2014 to 11.60 mmt in 2016, and by 2017, the figure fell to 10.40 mmt, before surging in 2018 to 11.0 mmt, a figure maintained in 2019. It rose to 11.5mmt in 2020.

Data from the Food and Agriculture Organisation (FAO) shows that soybean production in Nigeria has been rising and falling.

It rose from 588,523 tonnes in 2015 to 936,887 tonnes in 2016. In 2017, the figure increased further to 993,955 tonnes but fell to 650,000 and 630,000 tonnes in 2018 and 2019 respectively.

Okunade, who heads the poultry farmers association in Kaduna, said a key factor has been insecurity that made many farmers abandon their farms for fear of being kidnapped or killed.

In Kaduna alone, about 937 people were killed and 1, 972 kidnapped in 2020, according to the Kaduna State security report presented in early March. Okunade lamented that government policies also contributed to the problem as the country still exported some of these commodities even when domestic needs had not been met locally.

Some state governments have recently expressed displeasure with regards to the Central Bank of Nigeria’s agricultural intervention fund.

Governor Nyesom Wike of Rivers State has accused the CBN of “playing politics” with its agriculture development loans to states.

He stated this recently in Port Harcourt when the minister of state for Agriculture, and Rural Development, Mustapha Shehuri, visited him.

He further said that “We are among the states being denied access to loans meant for agriculture development,” he said. “It is wrong to play politics with certain issues; we should be dispassionate in implementing this kind of programme.”

Wike said the CBN ought to partner with the state governments in the implementation of the loan scheme. “This is a scheme that will enhance food security, create jobs and promote youth empowerment” he added.

With about 83 million Nigerians living in poverty beyond conventional standards (that is 40% of Nigeria’s total population), Nigeria has been classified as poor, which implies that an average of four out of 10 Nigerians have real per capita expenditures below N137, 430 per year.

This implies that the monthly income of an individual in this category is less than N11, 500 while income per day is N38.00. Rationalising this income pattern with the current prices of food items seems almost ridiculous (and the prices are still rising).

The problem now lies in the irrationality of consistent income streams against rising (sticky) food prices in an agriculture producing economy.

Should this unholy union of food insecurity, food inflation and insignificant economic growth continue to sustain the upward trend, the future of the middle and lower-income class group in the next three to four years appears bleak and could have negative economic consequences in the near future.