More than ever before, the year 2022 has witnessed economic crisis with Nigerians grappling with general increase in prices of food, goods, other essentials, and a fall in their purchasing power. Prices of food items have risen astronomically in the last six months and the cost of having a decent meal is enormous with many households having less than two meals per day. The price of a 50kg bag of rice, a staple eaten by Nigerian families almost on a daily basis, has increased to N28,000, up to N40,000 in some states in the northern Nigeria. Beef, chicken, mutton and pork are fast getting out of the reach of an average Nigerian with many people opting to have tinier pieces of meat on their meals – akin to going from a bun-sized chunk to sugar cube cuts or none at all. Other staples like garri, beans, yam are being cut out of peoples’ food time-table gradually.
Bread has been worst hit as the regular family size sliced bread previously sold for N400 is now N600 and indeed very light in weight, eaten by only two people in a family of five. Gone are the days of giving neighbours’ bread after returning from a trip, the “Baba kaabo, omo ku ile” gift. The Association of Master Bakers and Caterers of Nigeria threatened to withdraw their services last month due to the alleged unprecedented costs of flour, sugar and other bakery materials. A barrage of factors may be attributed to this dwindling economy. Firstly, Nigeria’s, heavy reliance on oil imports has made its economy extremely vulnerable to volatile oil prices. Although oil prices have risen since the Coronavirus disease (COVID-19) pandemic, Nigeria is not benefiting from the new yields as there is less crude oil to export.
Despite being Africa’s largest oil producer, the country frequently experiences scarcity and fluctuating prices of petrol, diesel and kerosene. All four refineries are barely functional due to years of neglect hence, the country spends up to $7bn annually on fuel imports and subsidy. Oil theft is also on the upswing, as the Chairman of the United Bank of Africa, Mr. Tony Elumelu, recently pointed out that Nigeria was losing 95 percent of oil produced to oil theft in the Niger Delta. Secondly, the nation’s electricity grid has collapsed six times since the beginning of 2022. Experts have attributed this to poor utility performance, theft of grid equipment, bad weather, inadequate gas supply, insufficient funding and long age of grid infrastructure.
Erratic power supply has pushed businesses in the agricultural value chains to seek alternative power source to more expensive means to power their tools to prevent food spoilage. This translates to high cost of food production and supply to end users. The country’s poor electricity generation at 4,000 megawatts when compared to South Africa’s 58,000 megawatts, is also a bone of contention. The glaring insecurity issues caused by the gruesome activities of herdsmen, kidnappers, bandits and Boko Haram terrorists have displaced farming communities, disrupted markets and limited agricultural production and transportation of produce. In addition, government policies such as closing of land borders, which was aimed at driving local production and consumption also inadvertently drove up food prices and inflation level. The National Bureau of Statistics (NBS) Consumer Price Index puts the June 2022 food inflation rate at a whopping 20.60 percent! The government’s strict capital control policies have not helped either. As a consumer economy that relies heavily on imports, the scarcity of foreign exchange drives prices of commodities, especially food up, as the dollar is needed to buy commodities like wheat, maize, diary and other products that Nigeria largely imports. Furthermore, the ongoing Russia-Ukraine crisis has also imposed unprecedented strain on the food supply chain of countries that source most of their agricultural products and raw materials from both countries.
These combined challenges could soon push 19.4 million Nigerians into a food crisis, according to the United Nations’ food agency. Millions of Nigerians face food insecurity already with more expected to join this year. As it stands, Nigeria may be described as the ‘poverty capital of the world’, as it is being tagged because as four out of every 10 people live on less than a dollar a day while more of its over 200 million people are being driven into poverty. I did like to reinstate here, as I did in a 2016 article titled, “Curtailing the tomato scourge” that the diversification of the local economy cannot be by lip service. Nigeria, being the most populated country in Africa, has several agricultural commodities, which could be developed into huge export earners through concrete, deliberate and concerted efforts. These include, but not limited to cassava, cocoa, tomato, cotton, maize, oil palm, soya bean, onion, rice, sorghum, livestock and fisheries.
Considering the existing setbacks, the commitment of the current and incoming administration is paramount. There is an urgent need for local, state and federal governments to collaborate and develop a comprehensive database of rural and urban farmers nationwide and provide effective incentives and technological know-how to boost farming. Otherwise, the government would continue to pursue agricultural policies that can achieve very minimal results. The Central Bank of Nigeria (CBN) should drive the process of ensuring that farmers get access to small scale loans at single-digit interest rates. Insecurity is presently the biggest driver of high food prices, and to lower the price of food items, security has to improve, Ayodeji Ebo, an analyst at Afrinvest Securities has opined. Furthermore, with the tripodal mandate of teaching, research and extension of universities of agriculture and agriculture-based research institutes in Nigeria, the government needs to liaise and work with renowned researchers in the country on the way forward.
Nigeria’s huge population and the consistent demand for agricultural products offers wonderful opportunities for investors. It is necessary to produce an enabling environment and tackle the challenges facing the agricultural sector such as youth apathy for farming, infrastructure problems like poor road networks for the distribution of farm produce, poor storage facilities and power supply, lack of capital, unfavourable land policy, absence of technological know-how, unreliable data and weak political will. The Alliance For Green Revolution in Africa forecasts that production in Nigeria’s agriculture sector could grow up to $256 billion by 2030. This will not only ensure food security, it will also foster peace and security of lives and property as several idle hands can be put to work. The Yorubas used to say, ‘Ebi o ki wo nu koro mi wo be’, literary meaning that ‘A hungry person is not a good listener’. Perhaps, a blatant interpretation could mean ‘A hungry person is an angry person’. What does this translate to? It simply tells us that is the absence of food in the stomach, the average Nigerian is no longer at ease.
