The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has disclosed that some Nigerians are now spending as much as 120 per cent of their total income on food.
Speaking at Chatham House in London, the Minister revealed that a government survey identified this extreme expenditure pattern among certain segments of the population. He noted that this situation is forcing many citizens to borrow money or rely on the support of relatives to meet their basic survival needs.
The revelation provides a stark look at the severity of the cost-of-living crisis currently facing the country. For many households, the cost of a basic food basket has risen to a level that exceeds their entire monthly earnings, leaving no room for other essential expenditures such as healthcare, education, or housing.
Economic drivers of food insecurity
The surge in food prices is closely linked to several macroeconomic factors currently affecting the Nigerian economy. The removal of the fuel subsidy and the volatility of the Naira have significantly increased the cost of transporting agricultural produce from rural farming communities to urban centres.
As transportation and logistics costs climb, food vendors and wholesalers are passing these increased expenses on to the end consumer. This has created a cycle where energy inflation directly fuels food inflation, further eroding the purchasing power of the average Nigerian.
Beyond transport, the high cost of credit and the rising price of essential agricultural inputs, such as fertilisers and improved seed varieties, have made it difficult for smallholder farmers to maintain previous production levels. This has contributed to lower food supply in the markets, driving prices even higher despite various government interventions.
The current economic reality creates a substantial drain on domestic consumption. When a vast majority of household income is directed solely toward food, there is minimal capital left for savings, investment, or spending on other vital sectors such as healthcare and education. This reduction in disposable income threatens to slow down the recovery of the broader economy.
The Ministry of Finance is expected to respond to these challenges through upcoming fiscal policies aimed at stabilising the economy and incentivising local food production. However, the immediate challenge remains the rapid pace of price increases, which continues to outstrip the current income levels of most Nigerians.
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