Nigerians face rising food prices as the currency declines.

Estimated read time 3 min read

Due to a declining naira, inadequate domestic agricultural output, and an over reliance on pricey imported food, Nigerians are facing the greatest food inflation in decades.

The annual food inflation rate in January was 35.41%, according to data from the National Bureau of Statistics. This was 11.9% more than the rate in January 2023 (24.32%).

At the state level, Rivers (40.08%), Kwara (40.87%), and Kogi (44.18%) had the greatest rates of food inflation, while Bauchi (28.83%), Adamawa (29.80%), and Kano (30.08%) had the lowest rates. Nonetheless, it is evident that food inflation is a national issue.

According to the World Bank’s most recent Nigeria Development Update report, the number of impoverished Nigerians has increased from 89.8 million at the beginning of 2023 to 104 million as a result of rising inflation and slow growth. At least 26.5 million Nigerians who reside in the Federal Capital Territory, the states of Borno, Sokoto, and Zamfara, as well as the UN Food and Agriculture Organization (FAO), have received warnings that they may experience a food crisis between June and August.

Senator Abubakar Kyari, the Minister of Agriculture and Food Security, ascribes the increase in food inflation to the Covid-19 pandemic-related supply chain interruptions, flooding, insecurity, depletion of food stocks, and depreciation of the currency.

Economist and market expert Mosope Arubayi claims that those with lower incomes are suffering the most, as their household budgets are finding it difficult to keep up with the rising costs of food.

Massive nationwide demonstrations against the growing cost of living have been held, with the states of Niger, Kano, Kogi, and Ibadan among those involved. Businesses worry about a wave of truck thefts carrying food and raw materials to markets, and if nothing is done, there is danger that food inflation may lead to public upheaval.
Naira’s decline persists

A declining currency is the main cause of the problem. Since the currency peg ended last year, the value of the naira relative to the dollar has decreased by around 70%.

The Tinubu administration has attempted to reduce the gap with the parallel market rate by devaluing the naira twice since June 2023, following years of artificial support provided by government policy. However, the government’s attempts to restructure the currency have made it worse than the Lebanese pound in terms of performance worldwide.

The significant depreciation of the local currency is typically accompanied by a rise in the price of imported products and services; hence, a weaker naira translates into higher costs for foreign food, gasoline, and machinery.

Nigeria’s annual inflation rate for imported food went from 18.49% in January 2023 to 26.29% in January 2024, according to CPI statistics from the National Bureau of Statistics.

Due to the conflict between Russia and Ukraine, disruptions in the supply chain during the Covid-19 pandemic, and border closures imposed by President Muhammadu Buhari’s previous administration in Nigeria, the cost of food imports has soared. The nation imports a substantial quantity of fish, milk, and wheat.

One of the main causes of inflation, particularly for farmers, has been the elimination of fuel subsidies worth billions of dollars per year.
According to the government, efforts are being made to address the exorbitant prices. The distribution of 42,000 metric tons of mixed grains has been announced by the Tinubu administration.

According to Vice President Kashim Shettima, grain and fertilizer will be supplied to homes and farmers in the near future by the government to increase the supply of food.

The government is also implementing targeted cash transfers, which provide $17 in monthly financial support to about 15 million people with lower incomes, in an effort to mitigate the impact on the most vulnerable households.

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