According to the National Bureau of Statistics(NBS), the average price of yam, rice, and garri has increased the most, despite the Central Bank of Nigeria (CBN) disbursing N1.09 trillion in eight years to improve basic food cultivation throughout the country. Over the past eight years, prices for these food items have increased by more than 200 percent, a major factor in headline inflation’s acceleration and double-digit growth. Following the last monetary policy meeting, former CBN governor Godwin Emefiele reported that N1.09 trillion had been given to farmers as part of the Anchor Borrowers Programme (ABP), with rice farmers receiving the largest share.
Although the ABP’s stated goal was to ensure that Nigeria could produce enough rice, cassava, fish, wheat, palm oil, and other essentials to meet its own needs, it has been plagued by corruption and has thus far failed to achieve its goal. One kg of yam tuber increased in price by 298.4 percent, from N111.6 in January 2016 to N444.6 in April 2023, while the price of one kg of imported rice increased by 274.3 percent, from N208.8 to N781.5, and the price of one kg of white garri increased by 207.5 percent, to N362.5 across the state. These essential goods, which are eaten daily by most consumers, have led to a double-digit spike in the headline inflation rate, making life more difficult for consumers.
Nigeria’s inflation rate surged to 24.61% in April 2023.
The NBS data further revealed that the rate of inflation began to move into double digits in February of 2016 at 11.38 percent, having been in the single digits at nine percent in January of that year. Since then, it has consistently been one of the highest in the world, reaching a staggering 22.22 percent in April of 2023. Before inflation hit double digits in December 2012, which was 12 percent. The inflation rate for food, which accounts for more than half of the overall inflation rate, has nearly triple from 9.78% in May 2015 to 24.61% in April 2023.
Furthermore, Chinyere Almona, the director-general of the Lagos Chamber of Commerce and Industry, stated that the country’s middle class had been negatively impacted by the double-digit monthly inflation rate that has persisted since February 2016. She also noted that the 22.22 percent inflation rate, the highest in 17 years, concerns households and businesses. She added that this has resulted in inventory surpluses in addition to a decline in purchasing power. Unrestrained high inflation could hinder output, increase poverty rates, impede economic growth, increase unemployment, and make exports uncompetitive, particularly in the sub-region. To safeguard the most vulnerable and stimulate demand-side growth, she suggested that the government implement fiscal measures, such as lowering or eliminating taxes on essential food items.
More than half of the country’s inflation is accounted to food.
A piece of egg jumped to N88.2 percent by 198 percent, a bottle of evaporated canned milk rose to N378.8 by 187.6 percent, and a kilogram of brown beans sold loosely rose by 158.7 percent to N615.7, a 500g sliced bread climbed by 138.9 percent to N577.4 and a kilogram of frozen chicken increased to N2,853.2 by 155.5 percent. The food inflation rate has risen more in 2023. In a recent analysis, the World Bank predicted that higher costs of local staples drove five million Nigerians into poverty between January and September 2022. Experts have pointed fingers at strange measures like border closures and currency restrictions on importers of certain goods for the recent spike in food costs.
SB Morgen’s 2022 report titled “Nigeria’s history of inflation: A tale of the destruction of value” discovered the 2019 closing of borders policy, high tariffs on imports, and the present exchange rate system of the CBN as significant variables hindering supply, thereby fueling an increase in the prices of various commodities. World Bank data also revealed that incomes have decreased from $2,679.6 in 2015 to $2,065.7 in 2021, and a continuous increase in prices is hindering the ability of Nigerians to afford water, shelter, food, and clothing. All of these factors have influenced a rise in the number of impoverished people from 70 million in 2016 to 95 million in 2022, as reported by the World Bank.
133 million Nigerians were living in multidimensional poverty.
According to its recent Nigeria Development Update report, consumer price inflation has increased, making it one of the highest in the globe. In the past year, the NBS estimated that 133 million Nigerians were living in multidimensional poverty, as opposed to 82.9 million by national standards in 2019. Also, Damilare Asimiyu, a senior analyst at Afrinvest Securities Limited, said that when people are unable to satisfy their basic needs, they will turn to social vices such as kidnapping, which in turn has become a new business in Nigeria.