In a plea to the Federal Government of Nigeria, President of the Premium Bread Makers Association of Nigeria (PBAN), Emmanuel Onuorah, highlighted the crippling impact of the 15 percent Wheat Development Levy on bread and the escalating costs of other essential inputs. These factors, he explained, are major contributors to the skyrocketing prices of bread across the country, even in the face of the naira’s recent gains against the United States dollar. Speaking during a presentation on Arise News’ Global Business Report, Onuorah emphasized the significant role played by wheat in bread production, constituting approximately 60 to 65 per cent of the ingredients.
However, much of this wheat is imported from countries like Ukraine and Russia, as well as other global sources. The ongoing crisis in these wheat-exporting regions, particularly the Russia-Ukraine conflict spanning three years, has severely disrupted pricing structures, pushing costs higher for Nigerian bakers. The repercussions of these disruptions have been keenly felt by consumers, with the price of a loaf of bread soaring to around ₦2,000 in February. This surge followed reported increases in the prices of a bag of flour, climbing from ₦37,000 to ₦42,000, and sugar, rising from ₦62,000 to ₦72,000. Despite the recent strengthening of the Naira against the dollar, with rates improving from ₦1,700 in February to nearly ₦1,000 in April, the cost pressures on bakers remain relentless.
Grain pool account was created to support R&D initiatives.
Onuorah elaborated on the financial burden borne by bread makers, citing the 15 percent Wheat Development Levy imposed by the government. This levy, he explained, is ultimately transferred to consumers, further inflating the Retail prices of bread and related products. He also shed light on the broader context of import duties, revealing that the cumulative duty on wheat stands at 30 per cent, with an additional 15 percent attributed to the Wheat Development Levy initiated during Jonathan’s administration in June 2012.
Originally intended as a temporary measure or stopgap solution, the Wheat Development Levy was designed to support research and development (R&D) initiatives within the wheat sector. However, Onuorah lamented that the intended benefits have not materialized, alleging mismanagement and a lack of transparency in the allocation of these funds. Consequently, the PBAN president urged the government to reconsider this levy and instead focus on strategies to promote local wheat production, given Nigeria’s capacity to cultivate wheat across 15 states.
Strategies to address the cost burden on bakers.
As an additional to the levy, Onuorah highlighted other cost drivers affecting bakers, including rising expenses for diesel, Electricity bills, and various inputs essential to the bread-making process. These cumulative challenges have placed significant strain on the bread-making industry, leading to concerns about affordability and accessibility of bread, a staple food for many Nigerians. The call to scrap the Wheat Development Levy and implement measures to support domestic wheat production is not new within the baking community. It reflects a broader narrative of economic pressures faced by small and medium-sized enterprises (SMEs) in Nigeria, particularly those operating in the food and Agriculture sectors. The implications extend beyond business viability, touching on issues of food security, inflationary pressures, and the socioeconomic well-being of citizens.
Responding to these challenges, stakeholders have proposed several strategies to alleviate the burden on bakers and consumers alike. These proposals include revisiting tariff structures, exploring incentives for local wheat farmers, enhancing research and development efforts in agriculture, and promoting collaborations between government agencies, industry associations, and academic institutions. Further, there is a growing emphasis on sustainable practices within the baking industry, with calls for greater Investment in Alternative Energy sources, Waste Management systems, and technological innovations to improve efficiency and reduce costs over the long term. Such initiatives not only address immediate financial challenges but also contribute to environmental conservation and resilience within the sector.
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The debate over bread prices and the Wheat Development Levy underscores broader issues of policy coherence, resource allocation, and Economic Diversification in Nigeria. It invites critical reflections on the balance between Revenue generation, sectoral support, and consumer Welfare within the context of a dynamic and interconnected global economy. As stakeholders continue to engage in dialogue and advocacy, the outcomes will shape not only the bread-making industry but also broader narratives of economic resilience, inclusive growth, and Sustainable Development in Nigeria. The quest for affordable and accessible bread reflects fundamental aspirations for food security, economic stability, and social equity, underscoring the imperative for collaborative and forward-thinking approaches to address the challenges at hand.