The removal of subsidies has resulted in a 200% increase in food prices.
Data from the National Bureau of Statistics (NBS) reveals that despite the Central Bank of Nigeria (CBN) disbursing N1.09 trillion over an eight-year period to enhance staple foods production in the country, the average prices of yam, rice, and garri have experienced the most significant increase.
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Over the past eight years, the prices of three products have increased by more than 200 percent, resulting in a significant boost to headline inflation and double-digit growth during this time.
According to Godwin Emefiele, the former governor of the Central Bank of Nigeria, during the most recent monetary policy meeting, the apex bank has disbursed N1.09 trillion to farmers through the Anchor Borrowers Programme (ABP), with rice farmers receiving the largest portion of the funds.
The Agricultural Promotion Policy (ABP), which aimed to achieve self-sufficiency in Nigeria’s production of rice, cassava, fish, wheat, palm oil, and other commodities, has been plagued by corruption allegations and has fallen short of its intended goals.
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The National Bureau of Statistics has released a report on selected food prices across Nigeria’s 36 states. The report shows that the average price for one kilogramme of yam tuber has increased by 298.4 percent to N444.6 in April 2023 from N111.6 in January 2016. Similarly, one kilogramme of imported rice has risen by 274.3 percent to N781.5 from N208.8, while one kilogramme of white garri sold loose has grown by 207.5 percent to N362.5.
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The common foods that are consumed on a daily basis by most people have played a role in the increase of the inflation rate, causing further financial strain on consumers in the largest economy in Africa.
According to the National Bureau of Statistics (NBS), the inflation rate surged from a single digit of nine percent in January 2016 to a double-digit figure of 11.38 percent in February of the same year.
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As of April 2023, the double-digit unemployment rate of 22.22 percent has persisted, ranking among the highest globally. In December 2012, inflation had reached double-digit territory, prior to its current resurgence in that same range.
The rate of food inflation, which makes up over half of the overall inflation rate, has increased by more than double, rising from 9.78 percent in May 2015 to 24.61 percent in April 2023.
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According to Chinyere Almona, the director-general of Lagos Chamber of Commerce and Industry, the country has experienced a monthly inflation rate in the double digits since February 2016. This has had a negative impact on the middle class population.
According to the speaker, the inflation rate of 22.22 percent is at its highest in approximately 17 years. This has resulted in notable and concerning consequences for both households and businesses.
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According to her, the inflation has not only decreased the purchasing power but also resulted in the accumulation of inventory. According to the speaker, if the high inflation is not addressed, it could have negative consequences such as limiting production, causing a significant increase in poverty rates, hindering economic growth, and resulting in higher unemployment and non-competitive exports, particularly in the sub-region.
The expert suggested that the government should introduce fiscal policies, such as the elimination or reduction of taxes on essential food items, to safeguard the most susceptible individuals and stimulate demand-side expansion.
In recent times, there has been a significant surge in the prices of essential food items in the Nigerian market. For instance, the cost of a piece of egg has risen by a staggering 198 percent, now selling at N88.2. Similarly, a bottle of evaporated canned milk has experienced a price hike of 187.6 percent, now retailing at N378.8. Additionally, the price of one kilogramme of brown beans sold loose has increased by 158.7 percent, now being sold at N615.In recent news, the price of frozen chicken has increased by 155.5, resulting in a cost of N2,853.2 per one kg. Additionally, sliced bread has also seen a significant rise in price, with a 138.9 percent increase, bringing the cost of 500g to N577.4.
The rate of food inflation, which has been the primary contributor to the overall inflation rate, has increased by over 100%, rising from 9.78% in May of 2015 to 24.61% in April of 2023.
According to a recent report by the World Bank, the increased costs of basic local commodities like rice, bread, yam and wheat, particularly in urban areas, have led to an additional five million Nigerians falling below the poverty line between January and September 2022.
The recent increase in food prices has been attributed by experts to unconventional policies, including the closure of borders and foreign exchange restrictions imposed on certain importers of specific commodities.
According to a report by SB Morgen titled ‘Nigeria’s history of inflation: A tale of the destruction of value’ in 2022, the closure of borders in 2019, imposition of high import tariffs, and the current exchange rate regime of the CBN are identified as key factors that are hampering supply and leading to a rise in prices of different commodities.
According to data from the World Bank, Nigerian incomes have dropped from $2,679.6 in 2015 to $2,065.7 in 2021. The rising cost of living is making it increasingly difficult for Nigerians to purchase basic necessities like food, water, shelter, and clothing.
The World Bank reports that the number of impoverished individuals has risen from 70 million in 2016 to 95 million in 2022, with various factors contributing to this increase.
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According to recent reports, the minimum wage has experienced a significant decrease from $82 in 2019 to $26. According to the latest Nigeria Development Update report, consumer price inflation has increased significantly, making it one of the highest in the world.
According to the National Bureau of Statistics (NBS), the number of Nigerians living in multidimensional poverty increased to 133 million last year, up from 82.9 million in 2019 based on national standards.
According to Damilare Asimiyu, a senior analyst at Afrinvest Securities Limited, resorting to social vices like kidnapping has become a new business in Nigeria due to the inability of people to meet their basic life necessities.
