08-30-2019, 09:30 AM
Why Nigerians are groaning under soaring food prices
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The production and consumption of food items ought to have witnessed a significant boost on the back of the Federal Government’s agricultural revolution. But, this appears not to be the case, as prices of most staples have continued to hit the roof. Experts blame the crisis on seasonal supply shortages, flooding in some parts of the country and pervasive insecurity, among others. CHIKODI OKEREOCHA, DANIEL ESSIET and JANE CHIJIOKE report
These are trying times for Nigerians. Already clobbered by myriad socio-economic challenges such as rising crime and unemployment rates, insurgency, extreme poverty, and a general economic slowdown, among others, the sudden increase in prices of food items has added a new and scary dimension to the mix.
Investigations by The Nation show that in the last few weeks, prices of most staple food items have gone up, raising fears that these staples may soon disappear from the menu tables of many Nigerians who may no longer afford them. Some of the staples affected include rice, beans, garri, semovita, tomato, pepper, and frozen foods, among others.
The Nation’s random check in some major markets in Lagos, showed, for instance, that a bag of 50 kilogrammes of foreign rice, which hitherto sold for between N13, 300 and N13, 800, has gone up to as much as N16, 000. Low budget consumers are also hit, as a derica of rice, which originally sold for N250, now goes for between N270-N300.
The price hike also affected the local rice. A rice dealer at Daleko Market, Mr Steve Adekoya, said before last week’s partial closure of the border, particularly the Seme Border, a bag of local rice sold for N13, 300, while dealers or retailers resold at about N13, 700.
He, however, said as, at Monday, August 26, 2019, it sold at the rate of N14, 500. “This is outrageous,” Adekoya charged, noting that while the Federal Government’s initiative of encouraging local rice production was a step in the right direction, it shouldn’t be at the expense of the masses who consume the product at a premium.
Listen to Adekoya: “It (the price of rice) is too high for us to bear. We want the Federal Government to intervene because the price increase is daily. There should be price control on rice. We want the price of local rice to be at most N10, 000.
Another trader in the market, Mrs Mojisola Kehinde, expressed a similar sentiment. She called on the government to come to the aid of Nigerians and local rice dealers. She acknowledged that the demand for local rice has increased, in line with the Federal Government’s push to encourage its production and consumption to grow the economy.
She, however, lamented that despite the increased demand for local rice, its price remained high compared with the foreign rice. “Our customers are complaining bitterly about the price of local rice, she complained.
Kehinde said before now, a 50 kg bag of local rice sold for between N12, 000 and N13, 500, but since last week Tuesday, the price skyrocketed to N14, 500, with some dealers currently selling for between N14, 600 and N15, 000. “What do they want us to eat?” she asked.
Also, many Nigerians who are fond of consuming frozen foods such as Turkey and chicken may be forced to either contend with the increase in the price of the products or remove them from their shopping list.
A frozen food retailer at Mafoluku, Oshodi, Mrs Joy Onwuchekwa, told The Nation that she had since run out of stock of the items, as she couldn’t buy from her suppliers. She said retailers now sell available stock at N1,500 per kilogram of Turkey, for instance. The same size of the product, a few weeks ago, sold for N1, 700.
A wholesaler in frozen foods at Ijora Olopa also confirmed that Turkey and chicken have become scarce in the market. He lamented that the situation was already affecting his business as he cannot supply to his numerous customers.
However, prices of other food items such as beans, garri, semovita, tomato, pepper, and tartashe appear not to have been affected, as their prices remain relatively cheap in the market. For instance, a bag of beans is currently sold for between N18, 000 and N25, 000, as against its earlier price of between N35, 000 and N46, 000.
Similarly, a basket of tomatoes, which hitherto sold for between N14, 000 and N20, 000 at Mile 12 Market, now goes for between N6, 000 and N10, 000 per basket, depending on its size, freshness and point of purchase. A half bag of pepper and tartashe is sold for N4, 000 and N5, 000, respectively.
Why food prices increased
A COMMON thread that ran across the testimonies of traders and dealers in the various food items affected by the current price increase was the recent partial closure of the borders by the Federal Government
Economic activities around the nation’s borders have been grounded to a halt. This followed the partial closure of the borders by the Federal Government. It was a joint border security exercise ordered by the government and code-named, ‘Ex-Swift Response.’
The exercise was being jointly conducted by the customs, immigration, police and military personnel and coordinated by the Office of the National Security Adviser.
President Muhammadu Buhari this week Wednesday in Japan explained that the partial closure of the borders with the Benin Republic was due to the massive smuggling activities, especially of rice, taking place on that corridor.
Traders, who spoke with The Nation, said the sudden partial closure of the borders, and of course, the recent presidential directive on the Central Bank of Nigeria (CBN) to restrict Foreign Exchange (Forex) for food importation were responsible for the increase in food prices.
Recall that President Buhari had directed CBN Governor Godwin Emefiele to stop providing foreign exchange for food importation. A statement signed by Presidential Spokesman Garba Shehu said the directive would ensure the steady improvement in agricultural production and attainment of full food security.
But the directive did not go down well with some critical stakeholders including the Nigeria Employers Consultative Association (NECA) and Lagos Chamber of Commerce and Industry (LCCI).
For instance, NECA Director-General Timothy Olawale argued that Nigeria cannot adopt such a policy since she currently relies on importation to make up for the shortfall in local production, warning that the implications of the move on the economy could be dire.
On his part, LCCI Director-General Muda Yusuf sought more clarification on the items categorised as food in the context of the ban. He said the constant spate of import bans on milk and rice will ground the economy to a halt, if not curtailed.
Investigations by The Nation, however, show that the forex ban on food importation and the partial closure of the borders ban may not be responsible for the hike in food prices. A source, who declined to be mentioned, said such claims were based on lack of proper understanding of the dynamics of Nigeria’s food production and supply market.
Knowledgeable food and agricultural industry experts, who spoke with The Nation, said the current increase in food prices is as a result of seasonal supply shortages, flooding in some parts of the country, and pervasive insecurity, among others.
In the throes of supply shortages
THE President, Federation of Agricultural Commodities Association of Nigeria (FACAN), Dr Victor Iyama, but the situation in perspective when he said the current increase in food prices is not unusual. According to him, certain staples are seasonal, and as a result, their supply has reduced, leading to a price increase.
Dr Iyama, however, told The Nation that the Association has entered into a Memorandum of Understanding (MoU) with some Russian investors to create large storage facilities across the country to forestall food price volatility occasioned by a shortage in supply. The facilities, according to him, can store produce for nine months.
The Country Manager, HarvestPlus Nigeria, Dr Paul Ilona, also said prices of staples are high because of seasonal shortage in supply. While pointing out that the current scenario reflects seasonal shortage, he said the short supply of staples such as tomato, onion and pepper is because it is their offseason.
HarvestPlus, a non-profit organisation, leads a global effort to improve nutrition and public health by developing and disseminating micronutrient-rich staple food crops to reduce hidden hunger among the malnourished population.
Its country manager, Ilona, was emphatic that the hike in food prices is not because of the border closure or the ban on Forex for food importation. According to him, it will take three to four months for the impacts of the Forex policy to start manifesting.
The expert, who reiterated that seasonal shortage was responsible for the present situation, noted that Nigerians are eating old stock of most food items, which is why their prices are high.
Ilona also said it is difficult for farmers to plant tomato now because of the presence of pests that will not allow tomato to grow well. Those currently planting tomato successfully are doing so under a controlled environment.
A nation ravaged by flooding
FOR Professor of Plant Protection and Improvement, Dept of Crop Science & Biotechnology, Imo State University, Owerri, Onuachumba Martin, the torrential rains and massive flooding in most parts of the country washed away farmlands.
He said the flooding was so severe that farmers across the affected areas recorded reduced harvest of major staples. This, according to him, was partly responsible for the current increase in the price of these staples.
Indeed, most states across the country have, in recent time, been at the mercy of torrential rains and severe flooding, which devastated farmlands across the country. Some of the flood-ravaged states include Kebbi, Adamawa, Bayelsa, Edo, Imo, Kogi, Anambra, Rivers, Bayelsa, Delta, Taraba and Benue, among others.
Sadly, several of these states affected by flooding are under the CBN’s Anchor Borrower Programme (ABP), which made billions of naira in funding to farmers of rice, wheat, maize, cotton, cassava, poultry, soybeans and groundnut.
The ABP has been hugely successful. Today, the country owes its celebrated revolution in rice production, for instance, to the intervention. The ABP is said to have substantially raised local production of rice.
For instance, Nigeria’s milled rice production increased by about 60 per cent, from 2.5 million Metric Tonnes (MT) in 2015, to four million MT in 2017. Between 2016 and 2018, eight new rice mills came on stream in Nigeria.
However, the flooding, which ravaged states across the country, may have reversed some of the gains so far recorded in the CBN’s ABP intervention.
The situation was so bad that the former Minister of Agriculture and Rural Development, Chief Audu Ogbeh, had to warn that unless appropriate measures were taken to replant after the floods, the country might experience rice shortage.
His words: “We have to find a way to assist farmers, who were affected by the flood. Farmers lost everything they planted.
The Food and Agricultural Organization (FAO) also weighed in on the crisis, warning that Nigeria may not achieve its zero hunger target by 2030 due to flooding.
It also expressed worry that Nigeria witnessed flooding in 14 states, which might thwart plans to end hunger in the country.
Unfortunately, these warnings were not heeded by the authorities. Now, the chicken has come home to roost. Already, there are fears that hunger and starvation may soon be closing in on Nigerians, starting with the skyrocketing price of food items.
Pervasive insecurity also
ALTHOUGH the activities of the dreaded Boko Haram have so far been limited to Nigeria’s North East region, the unsavoury consequences of their bloody campaigns are now being felt in all parts of the country.
For instance, Prof Martin said the pervasive insecurity foisted on the country by insurgency and other shades of criminalities including the activities of herdsmen and kidnappers has driven most farmers away from their farms. He said today, few farmers dare to go out and farm.
The result, predictably, has been low agricultural production, and of course, increase in prices of the few items that manage to get to the markets.
Bad as the situation is, experts fear that succour may not come the way of Nigerians any time soon. For one, some of them, who spoke with The Nation, last week, said the effects of the ban on Forex for food importation, without a corresponding increase in local food production, will begin to manifest in the coming months.
Besides, the soon-to-be-implemented new National Minimum Wage of N30, 000, they noted, will likely force an increase in prices. According to them, the extra purchasing power that will come the way of workers when the new wage is implemented might force a slight upward adjustment in the price of products and services
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The production and consumption of food items ought to have witnessed a significant boost on the back of the Federal Government’s agricultural revolution. But, this appears not to be the case, as prices of most staples have continued to hit the roof. Experts blame the crisis on seasonal supply shortages, flooding in some parts of the country and pervasive insecurity, among others. CHIKODI OKEREOCHA, DANIEL ESSIET and JANE CHIJIOKE report
These are trying times for Nigerians. Already clobbered by myriad socio-economic challenges such as rising crime and unemployment rates, insurgency, extreme poverty, and a general economic slowdown, among others, the sudden increase in prices of food items has added a new and scary dimension to the mix.
Investigations by The Nation show that in the last few weeks, prices of most staple food items have gone up, raising fears that these staples may soon disappear from the menu tables of many Nigerians who may no longer afford them. Some of the staples affected include rice, beans, garri, semovita, tomato, pepper, and frozen foods, among others.
The Nation’s random check in some major markets in Lagos, showed, for instance, that a bag of 50 kilogrammes of foreign rice, which hitherto sold for between N13, 300 and N13, 800, has gone up to as much as N16, 000. Low budget consumers are also hit, as a derica of rice, which originally sold for N250, now goes for between N270-N300.
The price hike also affected the local rice. A rice dealer at Daleko Market, Mr Steve Adekoya, said before last week’s partial closure of the border, particularly the Seme Border, a bag of local rice sold for N13, 300, while dealers or retailers resold at about N13, 700.
He, however, said as, at Monday, August 26, 2019, it sold at the rate of N14, 500. “This is outrageous,” Adekoya charged, noting that while the Federal Government’s initiative of encouraging local rice production was a step in the right direction, it shouldn’t be at the expense of the masses who consume the product at a premium.
Listen to Adekoya: “It (the price of rice) is too high for us to bear. We want the Federal Government to intervene because the price increase is daily. There should be price control on rice. We want the price of local rice to be at most N10, 000.
Another trader in the market, Mrs Mojisola Kehinde, expressed a similar sentiment. She called on the government to come to the aid of Nigerians and local rice dealers. She acknowledged that the demand for local rice has increased, in line with the Federal Government’s push to encourage its production and consumption to grow the economy.
She, however, lamented that despite the increased demand for local rice, its price remained high compared with the foreign rice. “Our customers are complaining bitterly about the price of local rice, she complained.
Kehinde said before now, a 50 kg bag of local rice sold for between N12, 000 and N13, 500, but since last week Tuesday, the price skyrocketed to N14, 500, with some dealers currently selling for between N14, 600 and N15, 000. “What do they want us to eat?” she asked.
Also, many Nigerians who are fond of consuming frozen foods such as Turkey and chicken may be forced to either contend with the increase in the price of the products or remove them from their shopping list.
A frozen food retailer at Mafoluku, Oshodi, Mrs Joy Onwuchekwa, told The Nation that she had since run out of stock of the items, as she couldn’t buy from her suppliers. She said retailers now sell available stock at N1,500 per kilogram of Turkey, for instance. The same size of the product, a few weeks ago, sold for N1, 700.
A wholesaler in frozen foods at Ijora Olopa also confirmed that Turkey and chicken have become scarce in the market. He lamented that the situation was already affecting his business as he cannot supply to his numerous customers.
However, prices of other food items such as beans, garri, semovita, tomato, pepper, and tartashe appear not to have been affected, as their prices remain relatively cheap in the market. For instance, a bag of beans is currently sold for between N18, 000 and N25, 000, as against its earlier price of between N35, 000 and N46, 000.
Similarly, a basket of tomatoes, which hitherto sold for between N14, 000 and N20, 000 at Mile 12 Market, now goes for between N6, 000 and N10, 000 per basket, depending on its size, freshness and point of purchase. A half bag of pepper and tartashe is sold for N4, 000 and N5, 000, respectively.
Why food prices increased
A COMMON thread that ran across the testimonies of traders and dealers in the various food items affected by the current price increase was the recent partial closure of the borders by the Federal Government
Economic activities around the nation’s borders have been grounded to a halt. This followed the partial closure of the borders by the Federal Government. It was a joint border security exercise ordered by the government and code-named, ‘Ex-Swift Response.’
The exercise was being jointly conducted by the customs, immigration, police and military personnel and coordinated by the Office of the National Security Adviser.
President Muhammadu Buhari this week Wednesday in Japan explained that the partial closure of the borders with the Benin Republic was due to the massive smuggling activities, especially of rice, taking place on that corridor.
Traders, who spoke with The Nation, said the sudden partial closure of the borders, and of course, the recent presidential directive on the Central Bank of Nigeria (CBN) to restrict Foreign Exchange (Forex) for food importation were responsible for the increase in food prices.
Recall that President Buhari had directed CBN Governor Godwin Emefiele to stop providing foreign exchange for food importation. A statement signed by Presidential Spokesman Garba Shehu said the directive would ensure the steady improvement in agricultural production and attainment of full food security.
But the directive did not go down well with some critical stakeholders including the Nigeria Employers Consultative Association (NECA) and Lagos Chamber of Commerce and Industry (LCCI).
For instance, NECA Director-General Timothy Olawale argued that Nigeria cannot adopt such a policy since she currently relies on importation to make up for the shortfall in local production, warning that the implications of the move on the economy could be dire.
On his part, LCCI Director-General Muda Yusuf sought more clarification on the items categorised as food in the context of the ban. He said the constant spate of import bans on milk and rice will ground the economy to a halt, if not curtailed.
Investigations by The Nation, however, show that the forex ban on food importation and the partial closure of the borders ban may not be responsible for the hike in food prices. A source, who declined to be mentioned, said such claims were based on lack of proper understanding of the dynamics of Nigeria’s food production and supply market.
Knowledgeable food and agricultural industry experts, who spoke with The Nation, said the current increase in food prices is as a result of seasonal supply shortages, flooding in some parts of the country, and pervasive insecurity, among others.
In the throes of supply shortages
THE President, Federation of Agricultural Commodities Association of Nigeria (FACAN), Dr Victor Iyama, but the situation in perspective when he said the current increase in food prices is not unusual. According to him, certain staples are seasonal, and as a result, their supply has reduced, leading to a price increase.
Dr Iyama, however, told The Nation that the Association has entered into a Memorandum of Understanding (MoU) with some Russian investors to create large storage facilities across the country to forestall food price volatility occasioned by a shortage in supply. The facilities, according to him, can store produce for nine months.
The Country Manager, HarvestPlus Nigeria, Dr Paul Ilona, also said prices of staples are high because of seasonal shortage in supply. While pointing out that the current scenario reflects seasonal shortage, he said the short supply of staples such as tomato, onion and pepper is because it is their offseason.
HarvestPlus, a non-profit organisation, leads a global effort to improve nutrition and public health by developing and disseminating micronutrient-rich staple food crops to reduce hidden hunger among the malnourished population.
Its country manager, Ilona, was emphatic that the hike in food prices is not because of the border closure or the ban on Forex for food importation. According to him, it will take three to four months for the impacts of the Forex policy to start manifesting.
The expert, who reiterated that seasonal shortage was responsible for the present situation, noted that Nigerians are eating old stock of most food items, which is why their prices are high.
Ilona also said it is difficult for farmers to plant tomato now because of the presence of pests that will not allow tomato to grow well. Those currently planting tomato successfully are doing so under a controlled environment.
A nation ravaged by flooding
FOR Professor of Plant Protection and Improvement, Dept of Crop Science & Biotechnology, Imo State University, Owerri, Onuachumba Martin, the torrential rains and massive flooding in most parts of the country washed away farmlands.
He said the flooding was so severe that farmers across the affected areas recorded reduced harvest of major staples. This, according to him, was partly responsible for the current increase in the price of these staples.
Indeed, most states across the country have, in recent time, been at the mercy of torrential rains and severe flooding, which devastated farmlands across the country. Some of the flood-ravaged states include Kebbi, Adamawa, Bayelsa, Edo, Imo, Kogi, Anambra, Rivers, Bayelsa, Delta, Taraba and Benue, among others.
Sadly, several of these states affected by flooding are under the CBN’s Anchor Borrower Programme (ABP), which made billions of naira in funding to farmers of rice, wheat, maize, cotton, cassava, poultry, soybeans and groundnut.
The ABP has been hugely successful. Today, the country owes its celebrated revolution in rice production, for instance, to the intervention. The ABP is said to have substantially raised local production of rice.
For instance, Nigeria’s milled rice production increased by about 60 per cent, from 2.5 million Metric Tonnes (MT) in 2015, to four million MT in 2017. Between 2016 and 2018, eight new rice mills came on stream in Nigeria.
However, the flooding, which ravaged states across the country, may have reversed some of the gains so far recorded in the CBN’s ABP intervention.
The situation was so bad that the former Minister of Agriculture and Rural Development, Chief Audu Ogbeh, had to warn that unless appropriate measures were taken to replant after the floods, the country might experience rice shortage.
His words: “We have to find a way to assist farmers, who were affected by the flood. Farmers lost everything they planted.
The Food and Agricultural Organization (FAO) also weighed in on the crisis, warning that Nigeria may not achieve its zero hunger target by 2030 due to flooding.
It also expressed worry that Nigeria witnessed flooding in 14 states, which might thwart plans to end hunger in the country.
Unfortunately, these warnings were not heeded by the authorities. Now, the chicken has come home to roost. Already, there are fears that hunger and starvation may soon be closing in on Nigerians, starting with the skyrocketing price of food items.
Pervasive insecurity also
ALTHOUGH the activities of the dreaded Boko Haram have so far been limited to Nigeria’s North East region, the unsavoury consequences of their bloody campaigns are now being felt in all parts of the country.
For instance, Prof Martin said the pervasive insecurity foisted on the country by insurgency and other shades of criminalities including the activities of herdsmen and kidnappers has driven most farmers away from their farms. He said today, few farmers dare to go out and farm.
The result, predictably, has been low agricultural production, and of course, increase in prices of the few items that manage to get to the markets.
Bad as the situation is, experts fear that succour may not come the way of Nigerians any time soon. For one, some of them, who spoke with The Nation, last week, said the effects of the ban on Forex for food importation, without a corresponding increase in local food production, will begin to manifest in the coming months.
Besides, the soon-to-be-implemented new National Minimum Wage of N30, 000, they noted, will likely force an increase in prices. According to them, the extra purchasing power that will come the way of workers when the new wage is implemented might force a slight upward adjustment in the price of products and services