One of the basic necessities of humans is food. Unfortunately, food prices are on the rise in Nigeria. This makes it difficult for some people to afford, especially with the increase in inflation that has affected the standard of living.
In July 2022, the yearly inflation rate rose to 19.64%, representing the country’s highest since September 2005. Food inflation grew by 22%, the highest in comparison to what was recorded in May 2021. The increase was primarily due to the rising cost of bread and cereals, potatoes, yam and other tubers, meat, fish, oil and fat, gas, liquid fuel, solid fuel, and passenger transport.
In contrast to the buyers’ income, there is no midpoint as the average income of a person continues to fall while the cost of things continues to increase. With this, here are some reasons why food prices will continue to rise in Nigeria.
Poor naira and dollar relation
Nigeria has a consumer economy. Most of the foods consumed are imported from other countries. The country, therefore, relies on the international food market that operates with dollars. The constant depreciation of the naira and its unstable state to the dollar is a disadvantage to the country. It affects the cost of importation, leading to a rise in the cost of selling. For instance, fish and turkey are one of the foods that are imported into the country. The price of these foods has changed on a year-to-year basis. The continuous naira depreciation means that people will pay more for imported commodities. It also shows the country’s inflation level and the poor purchasing power of an average Nigerian.
2022 started with the inability of some farmers to cultivate their crops due to the mutilation of farmers by bandits. These hideous activities have seen the displacement of farmers and communities as their homes are not safe.
The high level of insecurity makes it impossible for farmers to farm on a subsistence or commercial level. This, in turn, puts a strain on food across all the regions in the country. This increases food prices and reduces the quota agriculture contributes to Nigeria’s gross domestic product (GDP).
The Russia – Ukraine Crisis
The Russian and Ukraine war contributed to the rise in food prices in Nigeria and the world. The countries are known for exporting agricultural foods such as grains which consist of wheat, oats, rice, corn, sorghum, millet, rye, and barley. These are the primary staple foods used in Nigeria and the world.
In 2021, Nigeria imported wheat worth N126.1 billion and N144.14 billion durum wheat in 2020. This is because the country produces less than 3% of the 6 million metric tons of wheat consumed in Nigeria yearly. The crisis has seen the price of generic food such as bread and rice increase from 300 to 700 and above.
Since the removal of subsidies, the cost of buying fuel has increased. This has led to the unstable cost of buying it. This was also experienced this year as the country experienced fuel scarcity that was worsened by the importing of substandard fuel.
This increased the cost of transportation of people and goods. With the increased cost of transporting goods and services, the prices of selling foods invariably increased.
Poor electricity is an economic issue synonymous with Nigeria. The shortage and lack of available power supply have seen many businesses use alternative sources. This translates to more expenses, and they are not cheap.
The high cost of acquiring the equipment coupled with the cost of production makes the finished product be on a high price. This has seen the quantity and quality of commodities be on the high side.