Nigerians Face Mounting Pressure as Food Prices Skyrocket

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Nigerians Face Mounting Pressure as Food Prices Skyrocket

This increase was driven by a surge in the price of Semovita, oat flake, prepackaged yam flour, garri, beans, Irish Potatoes, yam, water yam, palm oil, vegetable oil, stockfish, mudfish, crayfish, beef head, live chicken, pork head, and bush meat.

Nigerians are feeling the pinch of relentless inflation, with food costs surging to a staggering 40.66% in May, according to the National Bureau of Statistics (NBS). This marks the highest food inflation rate in over 28 years, squeezing household budgets and disrupting market stability across the country.

The price hikes were driven by staples like garri, potatoes, fish, and meat. Overall inflation also reached a new high of 33.95%, the 17th consecutive month of acceleration. Core inflation, excluding volatile agricultural products and energy, climbed to 27%.

Economists predict annual inflation could peak at 35% in the coming months before easing to around 32% by year-end. They also anticipate the Central Bank of Nigeria (CBN) ending its interest rate hikes in July. The CBN has aggressively raised rates since May 2022 in an effort to curb inflation and stabilize the currency.

Despite the relentless price increases, there is a glimmer of hope. The month-on-month inflation rate showed a slight decline for the second month in a row, easing to 2.14% in May from 2.29% in April.

The NBS report identified food and non-alcoholic beverages (17.59%) as the primary driver of inflation, followed by housing, utilities, and fuel (5.68%). Increases were also seen in clothing, footwear, transport, and household goods.

Compared to May 2023, May’s food inflation rate is a staggering 15.56 percentage points higher, highlighting the significant burden placed on Nigerian consumers.

This increase was driven by a surge in the price of Semovita, oat flake, prepackaged yam flour, garri, beans, Irish Potatoes, yam, water yam, palm oil, vegetable oil, stockfish, mudfish, crayfish, beef head, live chicken, pork head, and bush meat.

A 2024 World Food Programme report attributed the surging food prices to ongoing conflict in key growing states, high cost of inputs and transportation, and a heavy reliance on market purchases.

Adding to the woes, analysts at Comercio Partners Research point out that high inflation, especially in food prices, has significantly impacted Nigerians’ ability to buy goods. This erosion of purchasing power weakens consumer spending, a vital engine for economic growth.

Many households are forced to prioritize essentials and even skip meals as their incomes shrink.  This isn’t a new challenge; a 2023 report by Picodi revealed Nigerians already spend the highest portion of their income globally on food – a staggering 59%. To counter the impact of inflation, organized labor unions are currently negotiating for higher wages for workers.

The situation is further compounded by the rising cost of healthy food. According to a recent ‘Cost of Healthy Diet’ report by the NBS and the Global Alliance for Improved Nutrition, the daily cost of a healthy diet has more than doubled, jumping from N491 in April 2023 to N1,035 in April 2024, a staggering increase of 110.7%.

Nigerians are expressing their concerns over these high prices. On social media platform X, SisiYemmie tweeted, “I don’t know how people are not panicking because of this food inflation because I’m low-key panicking.”

Another user, Ayin Ibibio, added, “I’m panicking. I’ve been panicking. But what can I do? I cannot generate health problems from panicking because of inflation.”

The World Bank’s latest Nigeria Development Update report revealed that rising inflation and sluggish growth increased the number of poor Nigerians to 104 million in 2023 from 89.8 million at the start of the year.

The recent surge in inflation over the last year has been attributed to Nigeria’s recent reforms from the liberalisation of the foreign exchange market to the removal of fuel and electricity subsidies. These reforms have led to a steep devaluation of the naira and increased input and transportation costs.

“Implementing reforms often comes with a high cost, especially the short- to medium-term effect on citizens,” said the World Bank in a report titled ‘Turning The Corner: Nigeria’s Ongoing Path of Economic Reforms.’

The Bretton Woods Institution highlighted that these reforms have added to the already high cost-of-living pressures on households, impeding purchasing power. To cushion the effect on citizens, especially the poor and vulnerable, the government has announced a three-month cash transfer program to provide 15 million households with 75,000 naira each.

Experts predict that food inflation will remain high until the insecurity crisis deterring farmers from working is resolved. President Tinubu’s administration has emphasised that tackling the country’s food insecurity is a key focus of its economic reform.

Last year, Tinubu declared a state of emergency regarding food insecurity and unveiled an intervention plan for food security, affordability, and sustainability. This plan included immediately releasing fertilisers and grains to farmers and households to mitigate the effects of the subsidy removal.

In February, Abubakar Kyari, minister of agriculture and food security, expressed the Federal Government’s readiness to freely distribute 42,000 metric tons of assorted grains to Nigerians in response to the country’s rising food crisis. He added that efforts were ongoing to ramp up food production and that plans were in place to incentivise farming.

Wale Edun, the minister of finance and coordinating minister of the economy, stated in June that food prices will begin to decline, and food availability will increase as inflation slows. He emphasised that the government was doubling efforts to increase agricultural production to ease stubbornly high inflation.

“Agricultural output is up to bring down inflation. Inflation is slowing month on month. Food prices will come down; food availability will increase,” said the finance minister.

However, the recent scarcity of essentials such as tomatoes is expected to exacerbate food prices further, likely contributing to a surge in food inflation in July.

To combat surging headline inflation, the Central Bank of Nigeria has been hiking its monetary policy rate, which now stands at 26.25 percent. The World Bank, in its ‘Global Economic Prospects’ report, noted that there is a “possibility that the tightening of monetary policy stops short of reining in inflation.”

 

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