Nigeria’s food inflation worsening misery of households, high unemployment ─MAN, NBS

*The National Bureau of Statistics reports that food inflation has quickened to its highest pace in in Nigeria 15 years, and several households already spend more than half their income on foods

*There is an urgent need for the Federal Government to intentionally ensure price stability before the situation becomes deplorable in the country, says Manufacturers Association of Nigeria

Emmanuel Akosile | ConsumerConnect

Aside from a weakening currency, higher fuel prices and electricity tariffs contributing to rising food prices, Nigeria’s National Bureau of Statistics (NBS) has disclosed that one in three people in the adjudged Africa’s largest economy were unemployed.

ConsumerConnect reports the agency Thursday, April 15 announced that food inflation has accelerated at the highest pace in 15 years, thereby compounding the misery of many households.

In the latest report, NBS announced the Consumer Price Index (CPI), which measures inflation, increased by 18.17 percent (year-on-year) in March 2021.

This is 0.82 percent points higher than the rate recorded in February 2021 (17.33 percent).

Foodstuffs market in Nigeria

According to the agency, the urban inflation rate increased by 18.76 percent (year-on-year) in March 2021 from 17.92 percent recorded in February 2021, while the rural inflation rate increased by 17.60 percent in March 2021 from 16.77% in February 2021.

On a month-on-month basis, the urban index rose by 1.60 percent in March 2021, up by 0.02 compared to the rate recorded in February 2021, while the rural index also rose by 1.52 percent in March 2021, up by 0.02 compared to the rate that was recorded in February 2021 (1.50 percent).

The corresponding twelve-month year-on-year average percentage change for the urban index is 15.15 percent in March 2021. This is higher than 14.66 percent reported in February 2021, while the corresponding rural inflation rate in March 2021 is 13.99 percent compared to 13.48 percent recorded in February 2021.

As regards the core inflation, the All items less farm produce” or Core inflation, which excludes the prices of volatile agricultural produce stood at 12.67 percent in March 2021, up by 0.29 percent when compared with 12.38 percent recorded in February 2021.

The highest increases were recorded in prices of Passenger transport by air, Medical services, Miscellaneous services relating to the dwelling, Passenger transport by road, Hospital services, Passenger transport by road, Pharmaceutical products, Paramedical services, Vehicle spare parts, Dental services, Motor cars, Maintenance and repair of personal transport equipment, and Hairdressing salons and personal grooming establishment,

The average 12-month annual rate of change of the index was 10.01 percent for the twelve-month period ending March 2021; this is 0.76 percent points lower than 10.77 percent recorded in February 2021. On month-on-month basis, the core sub-index increased by 1.06 percent in March 2021. This was down by 0.15 percent when compared with 1.21 percent recorded in February 2021.

On food inflation, the highest increase was recorded in foods such as Oil and Fats, Fish, Potatoes, Yam and other Tubers, Fruits, Meat, Vegetables, Bread and cereals.

Food inflation, a closely watched index spiked to 22.95% from 21.79% recorded in the previous month.

On a month-on-month basis, the food sub-index increased by 1.9% in March 2021, up by 0.01% points from 1.89% recorded in February 2021.

Insurgency, unrest, and the stand of President Muhammadu Buhari’s government on food imports in a nation where more than half the population lives on less than $2 a day are worsening food insecurity in the African country.

Food inflation rose to 22.95% March, caused by wide-ranging price increases across items such as cereals, yam, meat, fish and fruits.

The increasing costs have been in part blamed on a worsening conflict between farmers and herders in the country’s agriculture belt that the Federal Government has struggled to quash over the years.

Consequently, the Coronavirus pandemic is reported to have robbed 70 percent of Nigerians of some form of income, according to a COVID-19 impact survey published by the agency in March.

Meanwhile, Nigeria unemployment rate has risen to second highest on global list

The unrest, combined with the more than decade-long Boko Haram insurgency in the north, a weakening currency and higher fuel prices have also contributed to rising food prices, according to SBM Intelligence, a Nigerian research firm.

Now, as Nigerian food costs rise the fastest in 15 years, pushing up inflation, the situation has also been aggravated by import restrictions on certain staples, such as rice, that have remained in place despite Muhammadu Buhari Administration’s reopening Nigerian land borders December 2020, following a 16-month shutdown in an attempt to end rampant smuggling.

The Manufacturers Association of Nigeria (MAN) in a statement Friday said the rising inflation has adversely affected the profitability of producers and is a major contributor to the low export penetration of Made-in-Nigeria goods in the international market.

MAN stated: “There is an urgent need for government to intentionally ensure price stability before the situation becomes deplorable.”

A report quoted Cheta Nwanze, Lead Partner with SBM Intelligence, saying that food prices will remain elevated until the security crisis, which has prevented farmers from returning to their land, is resolved

According to Nwanze, that’s “unless the government does the sensible thing and allows food imports to happen.”

Until then Nigerians, who already spend more than half their earnings on food, have had to cut down on their expenditures.

Just over 50% of all households reported reduced consumption between July and December last year due to the twin pressures of falling wages and rising food costs, according to NBS.

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