Soaring food prices tighten noose on more Nigerians under Tinubu’s watch

Onome Amuge

When President Bola Tinubu announced the end of fuel subsidies in May 2023, the ripple  effects were felt far beyond the petrol pumps. Food prices, which had already been on the rise in Nigeria for some time, increased further as the cost of transportation and production went up.

The value of the naira has also continued to decline against the US dollar, reaching a record low  of over N1,500 per dollar at the FMDQ foreign exchange market in January 2024. This represents a significant depreciation from the exchange rate of N460.702 per dollar recorded in May 2023, when President Tinubu was sworn into office. The devaluation of the naira has led to an increase in the cost of essential items, particularly imported food.

This has compounded the challenges faced by Nigerians who were already struggling to make ends meet in the face of inflation and a weakened economy amid unabated insecurity. The rising cost of basic  staples  has had a significant impact on the purchasing power of many

Nigerians. As the price of these staples has increased, many families have struggled to afford the same level of food quantity/quality that they once enjoyed. Some have been forced to cut back on the amount and quality of food they consume, while others have turned to cheaper alternatives.

In a bid to address the escalating food crisis, President Tinubu, had in July 2023, declared a state of emergency on food security. However,  the government’s response so far has been insufficient to address the root causes of the crisis. Some have criticised the government’s approach to the crisis as being more focused on short-term fixes, rather than addressing the systemic issues that are causing the problem in the first place. The continued escalation of the food crisis has had a range of knock-on effects with some staples now costing more than double what they did a few months ago.

According to recent report by the National Bureau of Statistics (NBS), the food inflation rate in January 2024 stood at 35.41 percent on a year-on-year basis. This is a significant increase from the rate of 24.32 percent recorded in January 2023. The report noted that the rise in the food inflation rate was driven by increases in the prices of several staple food items, including bread and cereals, potatoes, yams, and other tubers, oil and fat, fish, meat, fruit, coffee, tea, and cocoa.

The effects of food inflation are particularly acute in Nigeria, as food is a necessity for every individual, regardless of their social status, class, education, income, location, or other demographic factors. The need for food is universal and essential for survival, making any increase in its cost a major challenge for individuals and households across the country. In fact, food inflation has been found to disproportionately affect the most vulnerable members of society, including low-income families, women, children, and the elderly.

Analysts have noted that the current food price increase is distinct from the typical annual cycles of price fluctuations. The price increases began to emerge at the end of 2023 and have continued to rise since then, rather than following the typical seasonal pattern. This has been linked to a general rise in the prices of other commodities, which have had a ripple effect on the cost of agricultural inputs and transportation, leading to higher food prices

In an environment of widespread price increases, food items are facing competition for consumer spending from other goods and services that are also increasing in price. This has led to a situation where the budget of the average Nigerian household is stretched to its limits, with food items taking up a larger share of the budget than before.

The high cost of food is thus having a major impact on the quality of life of Nigerians, who are being forced to make tough choices about how to spend their limited resources. This has led to a growing concern about food insecurity and malnutrition, as many families are unable to afford a balanced diet.

In the view of Olukayode Oyeleye, a public policy analyst and former special adviser to two former Nigerian ministers of agriculture, the current crisis is more of an economic crisis than a humanitarian crisis. This is because it is not the result of a natural disaster or armed conflict, but rather a crisis of high prices and limited resources.

 Oyeleye is critical of approaches that seek to address the food crisis through the distribution of food items from strategic reserves, arguing that this is neither an appropriate nor an effective response. He believes that such approaches do not address the underlying economic causes of the crisis, such as high input costs and limited resources. Instead, Oyeleye advocates for a more comprehensive economic response that addresses the structural issues that are driving the price increases. He argues that this is the only way to achieve sustainable, long-term solutions that will benefit the people most affected by the crisis.

According to Oyeleye, the root causes of the problem have been misdiagnosed, leading to misguided solutions that are unlikely to have a lasting impact.

“If indeed the federal government is sincere, committed and keen on addressing the food crisis and bringing down its prices, then it needs to draw up a robust and comprehensive programme involving collaboration with the states to massively produce food by incentivising farmers to boost farming activities. The insecurity as a result of banditry that is becoming recurrent and widespread all over Nigeria, particularly in the rural countryside in recent times, needs to be tackled head on,” he stated in an analytical commentary published on Business a.m. Newspaper.

Terfa Abraham, an economist, argued that the initiative of releasing food palliatives by the government doesn’t look promising because Nigeria’s inflation which surged to 29.9 per cent in January 2024,has the food component as the biggest size of the t inflation.

“In fact, food inflation is what is driving our inflation. In other words, the inflation the Central Bank of Nigeria is trying to tackle, thinking it is a monetary phenomenon,is not. It is a phenomenon driven by food inflation,” he said.

Abraham expressed skepticism about the success of the recent directive by President Bola Tinubu to release more than 102,000 metric tonnes of grain from the national food reserve, noting that even if the release of this grain is successful, it is unlikely to have a significant impact on the overall situation.

He argued further that a major reason for the failure of the national food reserve system is the loss of sources of food supply to the reserves. He noted that in recent years, post-harvest losses have been high due to inadequate storage facilities, and many farmers have stopped farming due to insecurity and attacks. As a result, the amount of food available for the reserves has decreased significantly. In addition,he noted that the quality of the food in the reserves has been compromised due to poor storage and transportation. This, he said,has further reduced the effectiveness of the reserves in addressing food shortages.

The economist explained that the source of the food in the national reserve is from harvested crops. He estimates that the food currently in the reserve is less than 15 per cent of the country’s total potential supply. He stressed that a truly effective reserve system requires a significant investment in the food production and distribution system.

“So we are trying to regulate a very low level of food in the reserve. In fact, that in itself will heighten food inflation because already, access to the small level of food supply that’s available is what you (the government) are trying to regulate. So, those who have it will even deliberately hoard it now. Infact, this policy will drive the food market into the black market and even heighten the price of food,” he argued.

Abraham emphasised that addressing food insecurity and rising food prices is not a quick fix, but requires a long-term, systemic approach. He called on the government to prioritise addressing the insecurity that has driven many farmers off their land and disrupted food production. In addition, he suggested that the government should focus on ensuring farmers have access to inputs, and that post-harvest losses are minimised.

He also pointed out that it is important to improve access to markets, as well as transportation and communication infrastructure. He noted that these measures would help to increase food production and lower food prices over time, leading to a reduction in food insecurity and a better quality of life for the Nigerian people.