Nigeria Flirts With Hunger As Inflation Jumps 14.23%

With the declining disposable income of Nigerians owing to the adverse effect of the covid-19 pandemic, the country is gradually moving towards food insecurity and hunger as increasing food prices have pressured inflation to a new peak of 14.23 per cent.

Several reasons including the high cost of transportation on the back of the new pump price of fuel, climate change, insecurity in the Northern part of the country and lack of modern storage facilities have been advanced for the increase in food prices which currently, is 100 per cent in the South West.

The National Bureau of Statistics (NBS) in its latest report titled “Consumer Price Index(CPI) October 2020” released Monday, noted that the CPI, which measures inflation, increased year-on-year by 14.23 per cent, rising by 0.52 per cent above the previous month of September 2020, which stood at 13.71 per cent.

The development portends serious implication for Nigeria which inflation among its counterparts on the African continent is still in the single-digit zone except for Guinea and Zambia that are 11 per cent and 16 per cent respectively. For instance, inflation in South Africa is 3 per cent, Egypt is 4.5 per cent, Uganda is 4.5 per cent, Algeria 1.2 per cent, Ghana 10.1 per cent, and Cameroon 2.4 per cent.

Others are Niger 5.7 per cent, Mali 1.4 per cent, Zambia 2.6 per cent, Senegal 2.6 per cent, Rwanda 9.3 per cent, Togo 2.9 per cent. Guinea 11 per cent, and Benin 4.80 per cent.

The return of the pump price to N160 affected transport fares and also the prices of food items across the country. The current pump price of N168 to N170 may also cause a further spike in food prices in months to come. Already, it has created an adverse effect across the sectors of the economy and causing uproar among the citizens

The year 2020 will definitely be remembered by Nigerians who, like others across the world, were battered by the Covid-19 pandemic during which many lost their jobs while some have their salaries slashed. The #EndSARS protests which were hijacked by hoodlums that looted and destroyed properties as they wreaked havoc on the nation’s economy also worsened the plight of Nigerians who are still reeling under the adverse effects of Covid-19 pandemic.

The NBS report noted that the composite food index rose by 17.38 per cent last month from 16.66 per cent in September 2020 on the back of the increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, vegetable, alcoholic and food beverages and oils and fats.

“The average annual rate of change of the Food sub-index for the 12-month period ending October 2020 over the previous 12-month average was 15.42 per cent, representing a 0.29 per cent points from the average annual rate of change recorded in September 2020, 15.13 per cent”.

For the inflation rate, the NBS said the percentage change in the average composite for the 12 months period ending October 2020 over the average of the CPI for the previous 12 months period was 12.66 per cent, showing a 0.22 per cent point rise from 12.44 per cent recorded in September 2020.

“Last month, Zamfara State had the highest rise in inflation on a year-on-year basis at 17.69 per cent, Sokoto at 16.99 per cent and Ebonyi at 16.91 per cent, while Lagos was at 11.96 per cent, Abuja at 11.84 per cent and Cross River at 10.50 per cent”, noted the Nation’s statistics agency.

“However, on a month-on-month basis, Sokoto was the highest at 2.91 per cent, Edo at 2.53 per cent and Akwa Ibom at 2.52 per cent, while Oyo stood at 0.69 per cent, Taraba at 0.60 per cent and Jigawa at 0.37 per cent.

Prof Uche Uwaleke, Head, Banking and Finance Department, Nasarawa State University and also, the President, Association of Capital Market Academics of Nigeria said the situation with the food inflation is the major challenge and a supply issue which is beyond the monetary policy control of the Central Bank of Nigeria (CBN).
Uwaleke while reacting to the inflation figures was concerned that “food inflation at over 17 per cent is a major driver of inflation even during the harvest season when expectations ordinarily should point to a downward trend”.

He noted that the food inflation in October that was highest in Edo, Kogi and Zamfara is in connection with insecurity in these parts of the country

Consequently, he advised the government to “focus on increasing food production by aggressively implementing the massive agricultural programme contained in the Economic Sustainability Plan”.

Uwaleke attributed factors including the continuous border closure, the increase in VAT and implementation of stamp duty as well as the high exchange rate especially in the parallel market as reasons for the soaring inflation rate.

The increase in the pump price of fuel he said also contributed “because according to the NBS, a major cause of core inflation came from the increase in transport cost”.

“With the effect of COVID-19 on the economy still lingering especially from supply chain disruptions, it is no surprise that headline inflation has continued to rise with the NBS October number coming in at 14.23 per cent up from 13.71 per cent the previous month” he added.

Data from a survey published by the News Agency of Nigeria (NAN) on food items in the South Western part of the country over the weekend shows 100 per cent increment in the prices of food items.
The survey showed that, at the Ota market in Ogun state, price of onions had almost doubled within the last one month, as a bag, which was sold for N50,000 in October, is now sold between N90,000 and N100,000 while on the retail side, four small pieces of onions, which were N50 in October are now N200.
Same goes for the prices of yam as a dozen of big yam, which was sold for N4,800 in October, is now between N9,000 and N10,000.

Saheed Ismaila, a yam seller at the popular Shasha market in Akure North Local Government Area of Ondo State, said five pieces of medium yam tubers, which were sold between N1,500 and N1,800 in October, are now between N2,500 and N3,000.

“We are selling based on how much we bought the item. We usually travel to Minna and Abuja to buy them and we have to add the cost of transport, hence the price increase,” Ismaila said.
Price of a 25-litre keg of Palm oil at the Shasha market has shot up from N11,000 in October to N13,500 in November. Prior to the COVID-19 pandemic, a 25-litre keg of palm oil was sold between N8,000 and N9,000 in many markets in the South – West.

At the popular Kuto market in Abeokuta, a bag of beans, of which the price fluctuated between N19,000 and N23,000 in October, is now sold for N28,000, while a plastic measure of the foodstuff has increased from N350 in October to N550 in November.

Rice, however, maintained a fairly stable price, as a bag of 50kg, which was sold for N22,000 in October now goes for N23,000 at most of the markets in Ogun, with a plastic measure hovering between N700 and N800, up from the N600 it was sold in October.
The survey, however, revealed a downward trend in the prices of garri, tomato and pepper in some of the markets.

At Agbeni market in Ibadan, a bag of onion, which was sold for N12,000 at the onset of coronavirus in March, is now N30,000, while the price of a bag of beans has increased from N15,000 to N30,000 within the same period.
Same also goes for the price of maize which a bag is now N17,000, up from N8,000 which it was last month.