According to SBM Intelligence, an arm of SB Morgen, that tracks prices of key household items across major markets in Nigeria, it has become cheaper to prepare a meal in north central Nigeria than the South West.
The cost of cooking items to prepare for example jollof in markets in Abuja are more expensive than what they are selling in markets in Akwa and Onitsha, BusinessDay’s analysis of the SBM report show.
SBM’s visit to two markets in Abuja to collect the Jollof Index data –revealed that Wuse Market is the most expensive place to make Jollof in Nigeria.
“Asked why Wuse has remained expensive, most respondents claimed that was intentionally planned to retain only those who can afford a higher cost of living,” SBM said.
The report explained that the cost of transporting food item to Wuse is the same as the cost transport to Nyanya, but food items go up in Wuse because of costs such as rent.
On the other hand, SBM visit to markets in Onitsha and Awka revealed that Jollof is cheapest to make in that region of the country.
The prices of making Jollof in the South East 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.
“These days, almost every home has a farm, and they produce more than what they consume, bringing the excess to the market. Respondents also noted how the South East markets work: there are days set out for market. Things are usually sold at a cheaper price in such market days,” the report by the research firm stated.
Prior to April 2018, the prices in Wuse were close to Nyanya, with Wuse always being marginally more expensive. However, from April 2018 onwards, the disparity 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, owing to among other factors, cost of transportation, SBM data analyzed by BusinessDay show.
“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 noted.
Figures by the National Bureau of Statistics (NBS) as analyzed 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.
However, data by SBM revealed that 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.
“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.
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.