Last week’s withdrawal of services by bread makers in Nigeria who are protesting the spike in the cost of production and some unfriendly government policies, is a crisis, which has to be urgently addressed at a period when Nigerians are grappling with rising inflation, high energy cost and a persistent fall in standards of living, writes Festus Akanbi
Nigeria’s food situation worsened last week when bread makers under the aegis of the Premium Breadmakers Association of Nigeria (PBAN), comprising owners, managing directors and partners of premium bakeries in Nigeria began a four-day warning strike to protest the rising cost of operation.
In what looked like a veiled warning of a prolonged strike, the spokesperson for the association, Mr Babalola Thomas told newsmen that the duration of the strike action would be extended if the government fails to intervene.
He complained that bakeries in Nigeria are incurring a “huge loss” due to the continuous increase in baking materials and diesel, saying that operating in an environment such as this is no longer sustainable.
“Bread is a staple food and one of the cheapest ‘grab and go’ food that is available for both the poor and rich. It, therefore, behoves the federal government to be mindful of this and ensure the survival and sustainability of the industry,” he said.
According to him, the strike which commenced on Thursday, July 21 was to ensure the survival of the Premium bread-making industry in Nigeria.
As Bread Disappears from Menu
Analysts described the action of the bread makers as double jeopardy for Nigerian consumers who are already battling a spike in food prices as reflected in the inflation figures churned out by the National Bureau of Statistics for June.
Analysts said Nigerians are being pushed beyond limits given the current agonies of the high cost of diesel and petrol at a period when the persistent breakdown of the national grid is forcing Nigerians to expend their little earnings on independent power generation.
The reality is as bread disappears from the menu, the choice of regular and cheap food items in homes is thinning out with the attendant escalation of people’s misery and frustration.
A random market survey conducted last week in Lagos showed that a 50kg bag of flour is sold for between N19,000 and N27,000.
The Gap
Tracing the causes of the spike in flour prices, market analysts said the Nigerian market has not fully recovered from the hike in food prices, after the lockdown in 2020, a development blamed for the drastic rise in the price of flour with a corresponding rise in the prices of flour made products like bread, cake and pastries.
They also believed Nigeria is a wheat import-dependent nation, maintaining that there is no how the country could escape the fallout of the global scarcity of wheat brought about by the ongoing Russia-Ukraine war.
Wheat is the most commonly used agricultural produce needed in making flour powder in Nigeria. However, the reality is that Nigeria has a weak domestic production of wheat, as a result, there is an imbalanced scale of the demand and supply chain. This makes us rely on foreign countries for supply. Hence, the increase in the cost of importing wheat into Nigeria just like other food items is done to encourage local production.
So, when the issue of dollar shortage is factored into the equation, one will understand why the prices of wheat have continued to balloon.
PBAN’s Demands
PBAN President, Mr Emmanuel Onuorah listed reasons for the withdrawal of services to include an incessant increase in the price of baking materials and the need to press for the federal government to stop charging a 15 per cent Wheat development levy on wheat import.
Others include the need for NAFDAC to review downwards the N154,000 penalty charged to bakeries on late renewal of certificates. They also want members to be given access to grants and soft loans being granted Micro, Small and Medium Scale Enterprises (MSMEs) by the Central Bank of Nigeria (CBN) and the stoppage of multi – agencies regulation of the breadmaking industry.”
Onuorah explained that the association had held a series of meetings with the Federal Ministry of Industry, Trade and Investment, Abuja (FMITI) with a sister association in the breadmaking industry in 2021, regretting however that the best attempts to ensure that suggestions put forward for the survival of the breadmaking industry has not yielded the desired result.
“Therefore, the withdrawal of service is the only way we believe we can use to get to Federal Government and Nigerians and let them know our plight and how difficult it has been with the breadmaking industry in Nigeria,” Onuorah said.
Season of Inflation
Nigeria’s inflation rate surged to 18.60 per cent in June, up from 17.71 per cent in the previous month, and according to the statistical bureau, the new rate is the highest the nation has recorded since January 2017.
The composite food index rose to 20.60 per cent in June 2022 on a year-on-year basis, the NBS said. The rise in the food index was caused by increases in prices of bread and cereals, food products, potatoes, yams, and other tubers, meat, fish, oil and fat, and wine.
On a month-on-month basis, the food sub-index increased to 2.05 per cent in June 2022, up by 0.03 per cent from 2.01 per cent recorded in May 2022.
The average annual rate of change of the Food sub-index for the 12 months ending June 2022 over the previous 12-month average is 18.62 per cent, which is 1.10 per cent points decline from the average annual rate of change recorded in June 2021 (19.72 per cent).
Earlier in the year, the breadmakers body had sought immediate intervention from the federal government to stem the tide of closure of business by members of the association who, like other players in the nation’s economy, have been battling the twin problem of high volatility in the forex exchange market and the prohibitive cost of diesel, which they use in running their bakeries.
Economic analysts said the ominous signal from the camp of bread makers simply reflects the mood in other sectors of the economy where difficulty in accessing foreign exchange is exacerbating the biting effect of the high cost of diesel. The association lamented that the hike in diesel price and exchange rate volatility has caused many of its members across the country to shut down their business operations.
The federal government said it has disbursed over $3.2 billion to support the power supply to Nigerians in the last five years. The Central Bank of Nigeria Governor, Mr Godwin Emefiele said the monies were disbursed to electricity Generating and Distribution Companies (DISCOs) to acquire equipment, buy meters and improve electricity supply in the country. However, Nigerians have continued to battle poor power supply with the situation worsening a few weeks ago when the nation’s power grid collapsed twice, causing a huge blackout across most parts of the country.
Virtually all products and services have experienced upward adjustments in their prices in recent times as a litre of diesel is sold between N800 and N900 per litre, but in all this, the federal government says Nigeria is not the only country experiencing high cost of food items and diesel.
Like every other thing, the Minister of Information, Mr Lai Mohammed has risen in strong defence of the federal government, saying the price increase is a global trend. He added that the government is taking steps to address the situation. He described those criticising the handling of the situation as mischief.
Mohammed said, “The last issue I want to address is the figures being bandied around by the folks on the other side and a section of the press, comparing the prices of some foodstuffs, petrol, diesel, etc., pre-2015 and now,” he said.
While the federal government is busy reassuring Nigerians that it’s up to the task of addressing the issues, PBAN had insisted that the challenges were affecting key sectors of the economy.
“Things are not getting better. We are still where we are. Diesel price is still hovering between N800 and N900,” Onuorah said.
“Even the price of the nylon that we put the bread in has just increased by about 20 per cent. It’s not looking any better. Light is still comatose.”
Corroborating complaints from other sectors, the PBAN president said, “The diesel is expensive. People are trying to right-size, scale down, and drop workers to remain in business. The government doesn’t seem to be listening to anybody. It’s not even only the bakers, it’s an industry-wide thing. MAN is crying. Hospitals that are running diesel are also optimising.
Industry affairs commentators said the unfavourable development in the operation of bread makers would affect other forms of pastry, with the attendant worsening of the plight of the common man.
