Increase in food prices may continue – Economists
By Francis Akinnodi
There may be no end in sight yet to the on-going rapid rise in the prices of food as the situation persist.
The United Nations estimated that 25 million people in Nigeria are food insecure.
Analysts said insecurity, climate change and inflation are the major triggers of food insecurity in Nigeria. The situation worsened after the government stopped paying subsidies on fuel in May, sharply increasing costs for food, transportation and energy.
Data released for December by the National Bureau of Statistics showed Nigeria’s food inflation hit 33.9 per cent.
Analysts said the trend could exacerbate suffering in a country with an estimated 25 million food-insecure people.
Nigeria’s currency devaluation is also impacting commodity prices and contributing to overall inflation.
According to an economist, Prof. Awe Timothy, Nigeria is among countries with the highest food expenditure with an estimated 60 per cent of total personal income spent on food.
“In the vast tapestry of economic challenges that Nigeria grapples with, the ominous specter of steeply rising food inflation casts a long and foreboding shadow over the nation.
“A confluence of multifaceted factors converges to propel this unsettling trend, creating a complex narrative that extends beyond mere surface explanations.”
A Lecturer at Adeleke University, Professor Tayo Bello, said a primary catalyst for the persistent surge in food inflation is the intricate web of supply chain disruptions.
He said Nigeria, a country heavily reliant on agriculture, faces a myriad of challenges in ensuring a smooth flow of goods from farms to markets.
He noted that inadequate infrastructure, ranging from dilapidated roads to inefficient storage facilities hamper the seamless transportation of agricultural produce.
“This logistical bottleneck not only increases operational costs for farmers but also results in significant post-harvest losses, exacerbating the scarcity of food in the market.”
But, an agronomist, Dr. Sam Inyang ascribed Nigeria’s rising food insecurity to climate change. According to Inyang,
On his part, the vice president of an international agriculture company in Nigeria, who pleaded anonymity, said, “Social and political factors also contribute to the grim prognosis of continued food inflation in Nigeria.”
He stressed that rising insecurity, manifested in the form of conflicts between herders and farmers, and the menace of insurgency, disrupts agricultural activities and displaces rural communities.
“This not only diminishes the labour force in the agricultural sector but also instills fear and uncertainty, deterring potential investors.
“The resultant reduction in production capacity amplifies the scarcity of food, leading to increased prices that disproportionately affect the vulnerable segments of the population,” he noted.
He added that the steep rise in food inflation in Nigeria is a complex saga woven from the threads of supply chain inefficiencies, climate vagaries, global economic dynamics, and socio-political challenges.