Rising food prices, serial naira devaluation compound Nigerians’ woes as purchasing power plunges

Life has become increasingly difficult for many Nigerians as the rising cost of food and the naira’s seemingly unctrollable downward trend continue to reduce their purchasing power, ADEPEJU ADENUGA writes

Food prices in Nigeria have continued to surge in the last one year, with the latest data from the National Bureau of Statistics showing that the composite food index rose by 22.72 per cent in April 2021 from 15.03 per cent in April 2020.

The NBS said the rise in the food index was caused by increases in prices of coffee, tea and cocoa, bread and cereals, soft drinks, milk, cheese and egg, vegetable, meat, oils and fats, fish and potatoes, yam and other tubers.

“Is the country at war? Why do I have to buy a tuber of yam at N1,500? Even if the country is at war, I don’t think it is enough reason to buy it at that price,” said an aggrieved woman, who was seen standing in front of a yam seller at the Ojodu Berger Market in Lagos.

The statistics office, in its ‘Selected Food Prices Watch for April 2021’, said the average price of a medium-sized agric egg increased year-on-year by 18.32 per cent, while the average price of 1kg of tomato increased year-on-year by 0.09 per cent.

It said the average price of 1kg of rice (imported/high quality sold loose) increased year-on-year by 14.57 per cent to N540.58 in April 2021, while the average price of 1kg of Ofada (local) rice increased year-on-year by 15.72 per cent to N472.19.

According to the NBS, the average price of 1kg of yam tuber increased year-on-year by 9.87 per cent to N252.80 in April; the average price of 1kg of brown beans rose by 36.73 per cent to N378.82, while 1kg of beef bone cost N1,145.32 in April, reflecting an increase of 9.38 per cent. Our correspondent observed many food buyers and sellers groaning over the high costs of food items during a visit to the Ketu and Mile 12 markets.

A woman, who wished to be identified simply as Iya Ibeji, told our correspondent, “Things are expensive. We are tired; the government should please have mercy on us. Someone whose husband gives her N500 for housekeeping, what can she buy? A bottle of groundnut oil is now N600-N700.

“A pack of ‘Panla’ fish is now N11,000; it used to be N7,500. I leave my house daily to come to the Mile 12 Market to hawk so that my children would get enough food to eat. But even the little I get, we spend on food and school fees. A bag of garri is now N26,000; garri has turned to the new gold. They don’t want us, the masses, to eat and send our children to school. We no longer ask our children if they are satisfied or well-fed, we ask them if they have eaten instead.”

The National President, All Farmers’ Association of Nigeria, Mr Kabir Ibrahim, in a telephone interview with our correspondent, noted that the value of the Nigerian currency had dwindled as the naira continued to weaken against the dollar.

The naira fell to 495 per dollar at the black market on Friday from 493 on Wednesday. It closed at 412/$1 at the investors’ and exporters’ window on Friday, 0.24 per cent weaker than it was on Thursday.

“While we want to be self-sufficient in food production, we are bedevilled by the problem of insecurity, and sometimes last year, we had flooding. Our production was a bit low, demand was quite high because our population was increasing and we were not importing,” Ibrahim said.

The Director-General, Manufacturers’ Association of Nigeria, Mr Segun Ajayi-Kadir, described the inflation rate of 18.12 per cent as unhealthy for the well-being of the people and the growth aspirations of the economy.

He said, “It should therefore be properly managed before it spirals out of control as the current inflationary condition in Nigeria adversely affects the profitability of the manufacturing and is partly responsible for the poor competitiveness in the sector.

“The latter being a major contributor to the low export penetration of goods manufactured in the country in the international market.”

According to Ajayi-Kadir, the rising inflation is partly caused by the depreciation of the naira, which leads to a very high and unfavourable exchange rate, particularly in the parallel market, where the majority of manufacturers are able to readily source forex.

He also attributed it to the distortion in food production and supply in most parts of the country, largely occasioned by the high level of insecurity and threat to the lives and crops of farmers, leading to an escalation in food inflation; and the high cost of clearing manufacturing consignments at the ports.

The Chief Executive Officer, AFEX Commodities Exchange Limited, Mr Ayodeji Balogun, said, “The rising cost of food is partly due to last year’s shock that affected production and availability of fertilisers, and also naira devaluation. Import prices are higher and local prices are currently high.

“It will ease out as the current harvest starts to come out. We have started to see headline inflation dropping, and the next few months will continue the declining trend.”

A professor of Economics at the Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella, said inflation would drop if the country could find a way to raise local production to substitute critical imports, and make the exchange rate of the naira to the dollar become stable.

He said, “We must make sure that we improve output and encourage farmers to go to the farm and industries to produce more, by ensuring we do not increase fuel prices, electricity tariff and find a way that production is improved by giving a laxity of taxes.

“The government should tackle the issue of bandits and herdsmen; it is as if the government does not care. This is affecting the economy, particularly agriculture. The reduction in the inflation rate from 18.17per cent in March to 18.12 per cent in April was not caused by an increase in output, but by people spending, which is not good for any economy.”

According to a senior lecturer at the School of Management and Social Sciences, Pan-Atlantic University, Dr Ekundayo Mesagan, a major problem in Nigeria is the exchange rate.

He said, “Nigeria is heavily import-dependent; at the foreign markets, the value of our currency drops when compared to other currencies, and the Central Bank of Nigeria has to help to augment the forex market.

“In December, the exchange rate fell sharply due to the crash in crude oil prices. The COVID-19 pandemic led to a sluggish demand in crude oil, and with that, prices crashed. With the lack of resources to continue to mop up the forex market, this led to the exchange rate skyrocketing and the devaluation of the naira.

“This also permeates the food sector; most of the food we eat is imported. Even in our local food products, many farmers cannot go to their farms due to insecurity. This has reduced the volume of the food they produce.”

AntiBMC:
Things will keep getting worse nd worse as long as these fulani pple are calling the shots in the govt.

There will never be any improvement. We won't b surprised if by 2023, a dollar will be going for 1000 naira. Always expect the worst with this govt, and I'm not even joking.

Fahdiga:
Buhari has destroyed Nigeria beyond redemption. Nigeria is now a hell on earth all thanks to the lifeless cow

iwaeda:


Hunger is bad now!

Fahdiga:
I de tell you