Four factors responsible for rising food prices in Nigeria in 2022

Food is one of the most important basic needs for survival. Its availability and accessibility are very important to any nation because its unavailability can lead to civil unrest, untimely death, malnourishment and more. In Nigeria, unfortunately, the price of food items in the markets has increased exponentially, daily.

For some time now, the price of food items has increased globally, though many people attributed it to the surprising outbreak of the coronavirus pandemic that rendered many food farmers and food-producing companies incapacitated in the production of adequate food. Farmers are now returning to farms after many months of little farming work due to the pandemic and restrictive policies by the governments and many food factories ran out of enough raw materials for their operations   

In Nigeria, the causes of food prices increase have gone beyond the pandemic as many factors have been identified to be the major players in the continuous increase in food prices.  Nigerians have to spend more money these days before they can afford enough food for themselves and their families and this alone contributed enormously to the increase in food inflation as the country recorded 17.2 and 18.37% for food inflation in the month of March and April respectively.

As we move towards the end of the second quarter of the year, food prices continue to grow steadily especially in major cities despite efforts from government and non-governmental organisations to reduce the hunger rate in the country. In this analysis, we identify 4 major unfortunate factors that contribute to the situation in the country concerning the price of food.

Fuel Scarcity

Since February 2022, Nigeria has experienced a scarcity of premium motor spirit (fuel) in most states of the country. The whole issue started last year due to the government’s plans to remove fuel subsidies but got worse when the federal government said its agents had imported substandard fuel. The scarcity contributed to the rise in food prices as the cost of transportation of foodstuffs across the country increased. For instance, Abuja(Nyanya) to Minna (Niger state) is N2500 as compared to N1500 collected last December.

Power Grid Collapse

The nation’s electricity grid has collapsed at least five times since the beginning of 2022. According to research, the recent collapses can be attributed to insufficiently trained personnel, deficiency in local manufacturing, poor utility performance, theft of grid equipment, weather, gas supply, insufficient funding and the age of grid infrastructure. Generally, when there’s a power outage, businesses are withheld, socio-economic development is affected and the standard of living just keeps going up as people would have to settle for a more expensive means of generating electricity to carry out their daily activities, so doing, the extra spending on production will reflect on the price of food items produced.

We are at a critical point now, where it is imperative for us to fix power once and for all in Nigeria. In the agricultural sector, constant and sustainable electricity is needed to preserve processed and harvested food products to minimise post-harvest losses. But with the recent grid collapse, both consumers and producers had to settle for another means of preserving food to prevent food loss at the various Agricultural Value Chains (AVCs).

Russia-Ukraine Crisis

Since the invasion of Russia on Ukraine, Nigeria is still on the receiving end as it imports some agricultural products from both countries and depends on the imports from these countries. Recently, Russia and Ukraine have engaged each other in a serious war tussle after Ukraine’s decision to forge closer ties with the European Union (EU) and the North Atlantic Treaty Organisation (NATO). Russia considers the decision a threat to their personality as a nation having shared powerful social and cultural ties together far back to the middle ages.  Nigeria consumes a large portion of wheat products but only produces about one or two per cent of about 6 million metric tons of wheat consumed annually, while relying heavily on importation to meet demands, data from the United State Department of Agriculture (USDA) confirmed. 

Also, data from the Nigeria Bureau of Statistics (NBS) confirms that Nigeria imported wheat worth over N128.1billion in the 9-month period of 2021, while it recorded an N144.14 billion durum wheat import in 2020. Durum wheat is the third-highest consumed grain in the country as it is used in making a number of other foods like bread, pasta, noodles, biscuits and other food. 

Insecurity

The glaring insecurity issues in the country have led to an acute rise in food prices due to the substantial reduction in food production. From July 2020 to date, basic food items like beans and tomatoes have seen a 253% and 123% price increase respectively, thus putting millions of people at the edge of starvation. In the last five years, ethnic conflicts, banditry, and Boko Haram across Nigeria especially in the North-East and North-Central have been on the rise and about 77,000 people have been killed and 2.6 million displaced in the past five years. The gruesome activities of herdsmen, kidnappers, bandits and Boko Haram have displaced farming communities, disrupted markets and limited agricultural production as most farmers deserted their farmlands and escaped to other regions for safety. Farmers now have restricted access to regional markets in these affected regions and find it difficult to go to their farms due to fear of being kidnapped or even killed. Between 2011 and 2021, Boko Haram was responsible for 32.8 thousand deaths in Borno state alone which is the country’s largest wheat-producing state. While Borno’s Production used to account for 30% of the national wheat production, it now contributes almost nothing to the total of about 420,000 tonnes, which is 4.5million tonnes short of national consumption.

Data to show food price changes in the first quarter of 2022:

January Food Price
February Food Price
March Food Price