Recent inflation numbers from Nigeria are mounting serious concern over the rising cost of food in the country. But this is not Nigerians’ first encounter with food prices running hot. The spikes date back roughly three decades. Between January 2003 and August 2021, the food inflation rate has raced to three major peaks. The first and highest was about 38 percent in August 2005, more than 16 years ago. The second, about 21 percent, was in July 2008. The third – the second-highest in 20 years – was about 23 percent in March 2021.
But who is feeding off the swelling food prices? Accusing fingers, from many Nigerians, including their President, have pointed at the farmers and the middlemen. But the can may have been placed on the wrong heads as the emerging facts seem to be painting an entirely different picture. There has been an underlying factor, predating Buhari’s presidency, but finding flourishing ground during his administration. Mr President might have been falsely accusing the middlemen. And the rise of the dollar is being wrongly blamed for the swelling food prices.
Manifestly, the north appears to have comparative advantage in food production, but they are still not able to feed themselves
Nonetheless, the precise and close to perfect answer to this question will have to come from a fact-filled and rigorously researched academic paper (or exercise). This is not the space for this. But we can, with the data at hand, have a glimpse and some insight into the potential answer to the question. I also believe that readers are equally keen to understand the forces pulling up food prices. While this is not what this opinion piece is about, I will share my thoughts, halfway through (or towards the end of) the article, on whether the falling value of the naira has any connection with rising food prices in the country. That said, brace up as we crunch the numbers and plough out some facts.
Crunching the numbers
I obtained and used monthly data from the Nigerian National Bureau of Statistics (NBS) showing the 43 frequently consumed food items in Nigeria—gari (Cassava flour), rice, maize, beans, red oil, vegetable oil, meat, chicken, eggs, potatoes, yam, fish, etc. The data covers all 36 states in the country, including the federal capital, from January 2017 to August 2021.
I classified the states into two categories: the five states with the highest average food prices and the five states with the lowest average food prices. Here, I observed a pattern: all the states with the lowest food prices are in the north (Kano, Katsina, Gombe, Kebbi, and Niger) and all the states with the highest food prices are in the south (Imo, Anambra, Rivers, Enugu, and Bayelsa).
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Manifestly, the north appears to have comparative advantage in food production, but they are still not able to feed themselves. Using NBS household survey data from between September 2018 and October 2019, and an annual food poverty line of N81,767, you can see that the food poverty rate in the north (22 percent) is about three times that of the south (four percent). To put this in perspective, more than 25 million northern residents are unable to spend roughly N200 per day on food, compared to just four million in the south. This amount is not enough to buy a small-sized cup of Starbucks coffee in the United States, but it can, depending on location, pay for one and half haircuts in Nigeria.
The losers and winners
Who are the winners and losers of rising food prices in Nigeria? To answer this question, we need to set out a context as follows. Rising average diesel prices in food-cheap states are linked to rising food prices in expensive food states. Food items are usually transported via diesel-powered vehicles (e.g., trucks) rather than using petrol-powered vehicles. Since vehicles transporting food items from the north to the south will usually fill up their fuel tanks while in the originating region (the north), it is therefore plausible to compare diesel prices in the north with food prices in the south (or the north-south price differences).
To be continued…
Dr Dapel, senior fellow (non-resident), Nigerian Economic Summit Group, and former IDRC Fellow, Center for Global Development, Washington, D.C. writes via zdapel001@dundee.ac.uk, Twitter @dapelzg
