The Household Battle Nigerians Are Yet To Surmount (Part 1)

Nearly all countries in the world have promised to improve the planet and the lives of its citizens by 2030, following the Global Goals initiated by the United Nations. The first two aims on the Sustainable Development Goals (SDGs) are ending poverty and hunger in all their forms everywhere

Current estimates show that nearly 690 million people are hungry, or 8.9 per cent of the world population. If the current trend persists, the number of people affected by hunger would surpass 840 million by 2030 as estimated by the United Nations.

In Nigeria, the most populated West African nation with an estimated population of 200 million people, an average home survives on a minimum wage of ₦30,000 monthly, spending more than half on food with an increase in the unemployment rate from 18.8% in 3rd quarter of 2017 to 23.1% in 3rd quarter of 2018.

Over the years, there has been a decline in the agricultural sector as Nigeria’s oil and gas resources stand as the major focus for government revenue and foreign exchange earnings. Diversification by individuals and governments in the areas of agriculture suffered from decades of underinvestment, policy neglect, etc. Nigerians rely on food produced by farmers with the majority being peasants lacking capital, skills, energy and other viable supplies to produce food in large quantities. Thus food insecurity in Nigeria is a recurrent problem.

United Nations’ Committee on World Food Security, defined food security as access by all people at all times to enough food for an active healthy life.  Food security for a household means access by all members at all times to enough food for an active, healthy life says USDA.  Similarly, FOA at World Food Summit 2003, opined that Food security is a condition where all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.

How Do Average Nigerians Spend Their Money On Food?

Food security for a household means access by all members at all times to enough food for an active, healthy life. According to the NDIC, 98% of Nigerians have less than ₦500,000 in their accounts. Nigerians spend nearly 60% of their earnings on food purchases, the highest in the world, compared to Americans, who spend just 6.4% and Britons who spend 8.2% according to data from Euromonitor cited by News Digest. Nigerians spent N1.9trillion or 4.7% of their budget on rice alone in 2019. This means that with the current ₦30,000 monthly minimum wage, Nigerians have to spend more on food.

Madam Fish, as she is often called by her customers, Esther Olenloa, in her mid-40s is a mother of 4 who supplies dried Mudfish fish called “Ibobo” in her local dialect (Esan language in Edo State), explained that food inflation has gotten to a point where even traders after selling will feel sad because they often spend above what they have made as profit on food.

“Ah! The way prices of food items are rising. It doesn’t have respect for anybody at this point, even we traders are suffering more and it’s so [saddening] that after selling you will spend both your profit and capital on food. Most times it even causes anger, you will see parents yelling and behaving somehow, it’s not our fault, and it’s because of what we are thinking. The cost of living right now in Nigeria is high and keeps rising every day; many people can no longer afford 2 square meals daily.”

According to an NBS data, the average price of 1kg of rice (imported high quality sold loose) increased year-on-year by 40.69% and month-on-month by 2.30% to N501.71 in August 2020 from N490.44 in July 2020. Similarly, the average price of 1kg of yam tuber increased year-on-year by 29.11% and decreased month-on-month by -4.08% to N245.62 in September 2020 from N256.06 in August 2020.

While the average price of 1kg of rice (imported high quality sold loose) increased year-on-year by 39.07% and month-on-month by 2.87% to ₦516.13 in September 2020 from ₦501.71 in August 2020 with Imo state selling at the highest price of ₦691.24 and Niger state as lowest at ₦390.25. Food inflation is expected to increase.

Nigeria’s Policies, Consequences On Food Availability

In August 2019, Nigeria shut its borders; a policy which many believed would be a 3 months closure. As the hopes of many were dashed when the closure continued, Nigerians looked forward to December for the reopening of the borders. What was thought to be a short-lived closure still lingers for over a year.

President Muhammadu Buhari ordered the closing of the Nigerian border to prevent smuggling of rice and other products, which affected trade between Nigeria and other African countries with which it had signed the African Continental Free Trade Area (AfCTA) agreement. Coupled with this new turn, is an increasing rise of Dollar to Naira with 1 United States Dollar equals 380 Nigerian Naira according to CBN.

As of April, 14 countries had food export bans in place for 20 different products. This could be worrisome; in 2007, such trade restrictions were a major contributor to the doubling of world food prices. Analysts have made it very clear that, given ample global food supplies, export bans are the wrong way for governments to cope with economic uncertainty stemming from the pandemic according to the Centre for Strategic and International Studies.

“Per time, it’s supposed to increase food availability and food security. But, because a lot of people haven’t diverted into the industry, producing those particular food crops whose importation has been banned. It often leads to scarcity (reduced supply), leading to an increase in demand a hike in the prices of those food crops,” says, an Agriculturist/Director, Marketing and Communications, MyFarmBase Africa, Temitope Adaramoti.

“The way things cost in the market now it’s really affecting us, before now, you can take Five Thousand Naira to the market and buy a whole lot, but now you will have up to Twenty Thousand Naira worth of foodstuffs with you and you will be wondering if you have lost money because the food items will be very few,” said Joy Amadi, a thrift store owner in Benin City.

“Before I use to sell plenty market and have enough to take home for food, but since when the Nigerian border was closed it has been difficult for me to get enough goods to sell which has affected the price we sell clothes. Food sellers too are complaining, imagine sachet tomatoes that were sold Fifty Naira are now One Hundred and Fifty Naira in the market, prices are just increasing every day and poverty too is increasing because no money anywhere, you cannot even collect loan because they will say your business is small. It’s even this LAPO (Lift Above Poverty Organization) people that even use to give us a loan, from Twenty thousand Naira to start with,” she added.    

With households experiencing moderate or severe food insecurity remaining as high as 68% in August 2020, according to NBS data, Experts see the Nigerian policies on food imports as unhelpful for food prices which are increasing due to trade restrictions with other African countries whose products are blocked from entering Nigeria’s borders whereas unemployment rate is increasing as agricultural.

“So long Nigeria farmers are not yet producing enough food that can serve the entire population of over 200 million people, we will continue to face a food crisis. Prices of food items and other daily spending on transportation and utilities will continue to increase and affect the average cost of living for households in Nigeria because farmers do not have access to adequate funding, fertilizers, seeds and grains,” says John, an Agriculturist and farmer.

“Closing the Nigerian border against other African markets when we are yet to have a standardized market for food supply was a very bad move. Food importers and other marketers who trade outside the borderline contribute to a larger percentage of food availability and standard cost of living, what happens then when these people are restricted without adequate solutions for alternative means, it will definitely tell on the prices of food items. How much do the Nigerian government budget for food every year, food inflation will continue amidst poverty and hunger if the government do not review some of their policies on food imports especially its border closure against other African markets because we do not have the capacity yet to solely feed ourselves as a nation as not enough hands have diversified into the agricultural sector or industry,” he added.

President Muhammadu Buhari wrote in a tweet on 10th September 2020 that “I am restating that nobody importing food or fertilizer should be given foreign exchange from the Central Bank. We will not pay a kobo of our foreign reserves to import food or fertilizer. We will instead empower local farmers and producers.” Meanwhile, President Muhammadu Buhari had earlier ordered a ban on dollars for food imports sometime in August 2019 and was now restating it in September 2020.

The Bottom Line

Nigeria cannot deal with the food inflation problem without food imports, as the local demand is just too high to be addressed by local supply according to Joachim MacEbong available at Nairametrics.

“Firstly, Nigeria cannot arrest food inflation without imports. The local demand is too great. Secondly, Nigeria’s agricultural productivity is hampered by several factors that need to be addressed in parallel. From seeds, irrigation to appropriate storage, adequate security to allow farming carry on peacefully, to good roads to ensure the products reach the market in good time. All these issues need to be addressed in order to boost productivity. Also, smallholder farming is not ideal. Increased productivity goes hand in hand with increased mechanisation. As only 3% of Nigeria’s farming is mechanized, one of the lowest in the world. Our average yields are also very low. Types of seeds as well as irrigation and access to fertilizer are all crucial.”

The border closure directive by the government has triggered food inflation to spike up as imports were disrupted, stretching the limited local supply which is not able to meet the demand of food by households. According to the September Consumer Price Index (CPI), inflation increased by 13.71 per cent (year-on-year) in September 2020. This is 0.49 per cent points higher than the rate recorded in August 2020 (13.22) per cent. On a month-on-month basis, the headline index increased by 1.48 per cent in September 2020.

This is 0.14 per cent rate higher than the rate recorded in August 2020 (1.34) per cent. The percentage change in the average composite CPI for the twelve months period ending September 2020 over the average of the CPI for the previous twelve months period was 12.44 per cent, showing 0.21 per cent point from 12.23 per cent recorded in August 2020. Similarly, the inflation index stood at 16% in August compared to 15.48% recorded in July 2020.

The Way Forward

The government should invest more in agriculture; provide farmers with more capital intensive, mechanized farming practices as well as educating farmers on how to improve productivity using digital tools to meet local demand for food in Nigeria. In a report available at Nairametrics, founder, ReelFruits, Affiong Williams, noted that sending more Nigerians to the farms may not increase productivity because “There is very little material productivity to achieve by increasing physical labour on the farms. Productivity increases in Agriculture, which moves the needle on production output, are more impacted by things like fertilizers, mechanization, and increased technical expertise. Manual labour is no match for any of those things.”

“To improve the output of any crop, one needs to do a lot of testing and control for so many factors to be able to arrive at the right conditions, which increase productivity. Smallholder farmers do not have the resources to do this type of ‘A/B testing’ as it were, and so it is very difficult to get true information and disseminate the right techniques that all of these farmers can apply. I think the government needs to enable more commercial farming by the private sector who are able to acquire the resources to increase productivity and disseminate such learnings at a faster pace,” she added.

Nigeria needs to be open to import, in order to balance the supply deficit and deal with an inflation problem that has already hit a rate of 16% and is expected to rise further.