As Rising Food Inflation Remains Unabated

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Oluchi Chibuzor in this report as part of the Civic Hive 2020 Atupa fellowship programme supported by the US embassy writes that the rising food inflation in the country can lead to undernourishment and potentially expose already fragile agricultural production systems.

The United Nation, in its latest statement put Nigeria as one of the four countries on heightened famine alert that could soon slip into famine if conditions undergo any further deterioration over the coming months.
The stark warning described the situation as a toxic combination of conflict, economic decline, climate extremes and the COVID-19 pandemic combining to drive people further into the emergency phase of food insecurity.

The above revelation reiterated the urgent warning by FAO, at the peak of the pandemic that the compounding threat of the pandemic on existing crises such as conflict, natural disasters, climate change, pests and plagues are already stressing food systems and triggering food insecurity around the globe.
In addition, the World Bank had estimated that the Covid-19 pandemic economic impact could push about 100 million people into extreme poverty as soaring unemployment rates, income losses and rising food costs are jeopardising food access in developed and developing countries alike.

Despite its critical status in any national development, as stated by the Executive Director of CORAF, Dr. Abdou Tenkouano, agriculture is under pressure from multiple disruptors, of which Climate Change is the main driver, bringing along biological risks that are new to the region or that have been endemic to the region.
Worthy to note is that the renewed effort by the federal government to attach great importance to agriculture through various policies interventions, escalating food prices across the country is seemingly truncating achievement recorded in the sector.

As laid out in the Malabo Declaration and the Sustainable Development Goals (SDGs), much more must be done, however, to sustain and deepen the agricultural transformation process in Africa inclusive of Nigeria.

Speaking recently, the International Institute of Tropical Agriculture (IITA) Board Chairman, Dr. Amos Namanga Ngongi, said the continent was still faced with many challenges such as food insecurity; emerging effects of climate change, highlighting that rampant land degradation makes these challenges daunting particularly as rapid population growth and rising urbanisation increase the pressure on agriculture to deliver more and better food.
For Nigeria, the surge in food prices only buttresses the fact that people, the reduction of Lake Chad volume, flooding across some states, and delayed rainfall, low yield per hectare, made it easy for COVID-19 to worsen the already fragile food production systems and lack oversight price control mechanisms.

Unending Upward Trajectory of Food Price
Data have shown that the cost of food in Nigeria increased 16.66 percent in September of 2020 over the same month in the previous year, but averaged 11.78 percent from 1996 until 2020, reaching an all-time high of 39.54 percent in September of 2001 and a record low of -17.50 percent in January of 2000 according to the world bank.
Affirming the trend, in its latest report, National Bureau of Statistics (NBS) consumer price index, (CPI) which measures inflation increased by 13.71 percent (year-on-year), this was 0.49 percent points higher than the rate recorded in August 2020 (13.22) percent.

In a corresponding month, the composite food index rose by 16.66 percent in September 2020 compared to 16.00 percent in August 2020. This rise in the food index was caused by increases in prices of Bread and Cereals, Potatoes, Yam and other tubers, Meat, Fish, Fruits and Oils and fats.

On a month-on-month basis, the food sub-index increased by 1.88 percent in September 2020, up by 0.21 percent points from 1.67 percent recorded in August 2020. The average annual rate of change of the Food sub-index for the twelve-month period ending September 2020 over the previous twelve-month average was 15.13 percent, 0.26 percent points from the average annual rate of change recorded in August 2020 (14.87 percent).
Across the federation, food inflation on a year on year basis was highest in Zamfara (20.94 percent), Kogi (19.06 percent) and Plateau/Yobe (18.90 percent), while Nasarawa (13.94 percent), Lagos (13.87 percent) and Ondo (13.59 percent) recorded the slowest rise.

On month on month basis, however, for September 2020 food inflation was highest in Zamfara (3.65 percent), Anambra (3.19 percent) and Kaduna (3.15 percent), while Nasarawa (0.51percent) and Abuja (0.15 percent) recorded the slowest rise with Ondo recording price deflation or negative inflation (general decrease in the general price level of food or a negative food inflation rate).

Growth in Prices
As a global watchdog on food prices, the United Nation’s Food Price Monitoring and Analysis (FPMA) for the month of October, in its key message said in West Africa, prices of coarse grains in Nigeria continued their marked upward surge of the past few months as a result of the macro-economic environment and disruption to the supply chains due to the restrictive measures implemented to contain the COVID-19 pandemic.
For Nigeria, Prices of food items in August, in general, reached levels well above those a year earlier in most markets, with peaks in the conflict-affected areas of the northeast where, in addition to economic factors, market activities are further hampered by persistent insecurity.

According to the report “The situation remains further aggravated by the border closure with neighbouring countries, introduced last year to curb the smuggling of imported rice and maize. The macro-economic environment is characterized by the continued depreciation of the local currency, the decline in foreign reserves and the high general inflation rate, which reached 13.22 percent in August, the highest rate since March 2018.
“Macro-economic environment is characterized by the continued depreciation of the local currency, the decline in foreign reserves and the high general inflation rate. Furthermore, a 20 percent increase in fuel prices, resulting in higher transportation costs has added to the upward pressure on prices.

“Prices of all cereal products were at least 50 percent higher than their year-earlier values, with peaks in the conflict-affected areas of the northeast due to the additional impact of persistent insecurity. Fresh supplies from the domestic harvest are expected to ease the upward pressure on prices from October,” the report stated.

Impact on Household
According to FAO’s Director of Emergencies and Resilience, Dominique Burgeon, “We are deeply concerned about the combined impact of several crises which are eroding people’s ability to produce and access food, leaving them more and more at risk of the most extreme hunger.
“We need access to these populations to ensure they have food and the means to produce food and improve their livelihoods to prevent a worst-case scenario.”
On his part, WFP Director of Emergencies, Margot van der Velden said: “We are at a catastrophic turning point. Once again, we face the risk of famine in four different parts of the world at the same time. When we declare a famine it means many lives have already been lost. If we wait to find that out for sure, people are already dead.”

The World Bank had warned that each percentage point drop in global GDP was expected to result in an additional 700, 000 stunted children, with smallholder farmers and their families, food workers in all sectors all particularly vulnerable.

A survey by the NBS in collaboration with the World Bank on Nigeria Living standard, released July 2020, had noted that average household size in Nigeria was 5.06 persons per family, showed that many households in Nigeria were affected by negative life events in the last three years preceding survey, noted that more than 37 per cent of households report being exposed to increase in prices of major food products; 20.1 per cent are affected by poor rains or flooding causing
harvest failures.

Furthermore, when faced with shocks and negative events, 11.7 percent of exposed households report reducing food consumption to manage the impact of shock. Globally when households replace meat, fruits, vegetables and other micronutrient-rich foods with high carbohydrate staples, energy intake may be up, but both macro and micronutrient intake will be compromised.

This increases risk of stunting, micronutrient deficiencies and associated poor health outcomes like vitamin A deficiency (VAD) and iron deficiency anaemia (IDA) – two of the most common nutritional deficiencies in the world– caused by diets low in animal source foods, fat, and certain fruits and vegetables.
Understanding the implication of hunger, In a joint statement by International Labour Organisation (ILO), FAO, The International Fund for Agricultural Development (IFAD) and World Health Organisation (WHO), said the economic and social disruption caused by the pandemic is devastating and that tens of millions of people are at risk of falling into extreme poverty, while the number of undernourished people, currently estimated at nearly 690 million, could increase by up to 132 million by the end of the year.

Combating Uncertainty in Price and Hoarding
Speaking to THISDAY, the Executive Chairman, Mile 12 Perishable Foodstuffs Market Association, Lagos, Mr. Shehu Usman he said his members do not engage in food speculation to gain undue hike in price, stressing that, “unfortunately rain has done so many damages to the crops from the south which has affected the market and people a lot. Also with bad roads, about 30 percent of the tomatoes are lost before they arrive.”

For the baking industry, the president of Premium Breadmakers Association of Nigeria (PBAN), Tosan Jemide, said the increase in the price of basic baking ingredients from March to August 2020 affected their business without a corresponding increase in the price of bread, but raises a concern of hike in the price of bread, “we suggest the government should revisit its foreign exchange policy by giving wheat importers priority for accessing FOREX since our local wheat production cannot meet up with growing demand for flour.”