Nigerians are enduring a record high food prices caused by a devalued currency, low local agricultural output, and heavy dependence on costly imported food items. Statistics from the National Bureau of Statistics (NBS) shows that the yearly food inflation rate spiked to 35.41% in January 2034, marking an 11.9% increase from January 2023’s rate of 24.32%. According to the latest Nigeria Development Update report from the World Bank, there has been an increase in the number of impoverished Nigerians from 89.8 million in early last year to 104 million due to a combination of inflation on the rise and sluggish economic growth.
Senator Abubakar Kyari, the Minister of Agriculture and Food Security, points to various factors such as food reserve depletion, insecurity, flooding, currency devaluation, and supply chain disruptions due to Covid-19 as drivers of food inflation. Economist and market strategist Mosope Arubayi highlights the particularly tough impact on low-income earners, who are finding it difficult to afford increasing food costs within their household budgets. The main concern revolves around a depreciating currency. Following years of government intervention to maintain its value, the naira has undergone twofold devaluations since June 2023 under the Tinubu administration’s efforts to align it with the parallel market rate.
There has been a slight uptick in Naira’s value.
Despite the government’s efforts to improve the currency, it has now become the second-worst performing currency globally, following the Lebanese pound. It is important to note that there has been a slight uptick in the Naira’s value against foreign currencies in recent weeks. The government reassures that measures are being taken to alleviate the issue of soaring prices. The distribution of 42,000 metric tons of mixed grains has been initiated by the Tinubu administration. Vice President Kashim Shettima has stated that the government’s plan is to enhance food availability by offering farmers and households with both grains and fertiliser in the short run.
The Senate is pressing the government to introduce a food assistance program to ease suffering and reduce the rising cost of living. In addition, they have directed the Federal Ministry of Agriculture to liaise with relevant organizations. On the other hand, the Trade Union Congress is calling for an increase in food imports by the government to lower prices. In a conflicting opinion, the International Monetary Fund (IMF) argues that the excessive dependence on imported food is a major factor contributing to the food crisis facing Nigeria and other countries in sub-Saharan Africa.
Government will not approve food import to address the crisis.
Minister of Information and National Orientation, Mohammed Idris and President Tinubu have both expressed that importing food will not solve Nigeria’s crisis. They have both made it clear that price control boards and food import approvals will not be established. Meanwhile, Nigeria’s agricultural industry has faced long-standing issues, particularly due to insufficient government funding. The Maputo Declaration on Agriculture and Food Security 2003 was established across Africa, urging nations to allocate at least ten percent of their budget towards agricultural development.
Yet, the Nigerian government consistently allocate less than 1% of its budget to agriculture with state-level funding even lower. This lack of financial support, combined with inadequate infrastructure, technology, and transportation systems, has led to significant post-harvest losses in certain areas. Additionally, the country’s widespread issues with banditry, terrorism, and kidnapping have deterred potential investors and further harmed the agricultural sector. As part of its intervention with the agriculture sector, the government has implemented a tax incentive program lasting five years in an attempt to spur investment in the industry.
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Shettima, the country’s Vice President, announced the launch of a National Commodity Board to oversee a national food reserve. This reserve will help stabilize prices and reduce fluctuations. PwC Nigeria has highlighted the importance of increasing investments in agriculture to boost yield and enhance the value chain in the coming years. However, although implementing extensive changes in the agriculture industry is important for preventing future food shortages, it is improbable that such actions will provide immediate relief for financially strained consumers.
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