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SUNDAY VANGUARD, JUNE 20, 2021, PAGE 15
RISING POVERTY:
No end in sight to high
food prices – MAN, others
•Cite disruption of raw materials to food manufacturing segment by insecurity as a problem
•‘Huge losses suffered as a result of borders’ closure’
By Tunde Oso
There is no end in sight to high food
prices as long as the conflict between
crop growers and northern cattle
herders seeking grazing pasture in the
South continues, economic experts have
said.
Costs started increasing in 2019 when the
Federal Government shut Nigeria’s borders
to curb the smuggling of rice and other
products.
Food prices rose 17.4 percent in October
from a year earlier, the biggest increase in
three years.
As prices rose, the United Nations, in late
2000, warned that violence had
compounded food production challenges
arising from factors such as climate change
and the coronavirus pandemic that placed
Nigerians at risk of famine.
The World Bank, in a report, had said,
last week, that high food prices had pushed
about seven million Nigerians into poverty
in 2020.
“Food prices accounted for over 60% of
the total increase in inflation. Rising prices
have pushed an estimated 7 million
Nigerians below the poverty line in 2020
alone,” its report published last Tuesday
said.
The World Poverty Clock, which uses UN,
IMF and World Bank data to monitor
progress against poverty, reports Nigeria
had 41 percent of its population or nearly
87 million people living in extreme poverty
on less than $1.90 per day.
“Nigeria faces interlinked challenges in
relation to inflation, limited job
opportunities, and insecurity,” said
Shubham Chaudhuri, the World Bank
Country Director for Nigeria.
“While the government has made efforts
to reduce the effect of these by advancing
long-delayed policy reforms, it is clear that
these reforms will have to be sustained and
deepened.”
Nigeria needs urgently to reduce inflation
by promoting inclusive growth and job
creation and helping small and medium
businesses gain access to finance,
Chaudhuri said.
The Covid-19 pandemic and the oil price
crash have hammered Nigeria’s economy,
which gets 90 percent of foreign exchange
earnings from petroleum exports, pushing
it into its second recession in four years.
As well as inflation, a rise in joblessness
has left a third of Nigeria’s workforce
unemployed at the end of 2020, according
to the statistics office.
Sunday Vanguard spoke to economic
experts on the way forward.
Food inflation not surprising
– Ajayi-Kadir, MAN D-G
Segun Ajayi-Kadir, Director General of
the Manufacturers Association of Nigeria
MAN, said the association is not surprised
that inflation, especially in the food sector,
continues to spiral upwards.
“The manufacturing sector has remained
in recession even after the technical exit of
the country’s economy”, Ajayi-Kadiri said.
“As you are probably aware, the
manufacturing sector posted a growth rate
of -1.51 percent in the Q4 2020 from -1.52
percent in Q3 of the same year.
“The current
inflationary condition is a
major contributor to the
low-export penetration of
goods manufactured in
the country, some of which
are largely in the
agricultural sector of the
economy into the
international market.
“Note too, the disruption
by insecurity of the feeder
i.e. supply of raw
materials to the food
manufacturing segment
of our association”.
The MAN boss urged
government to, among
others, pursue consumer
price stabilization
measures that will
stimulate growth in
agricultural output;
deliberately support the
manufacturing sector to
guarantee improved
output that can engender
the reduced intensity of
too much money chasing after fewer goods;
further diversify the country’s revenue
sources; action a CBN sustainable plan to
improve the external reserves to a defensive
capacity that will raise the months of
imports of Nigeria to a dependable level.
These, he said, can be achieved by
deliberately and sincerely partnering the
productive sector to grow non-oil exports.
Ajayi-Kadir said: “In particular, the
Export Group of the association clearly
suffered huge losses due to logistics issues
occasioned by the closure of the borders
as it takes an average of eight weeks for
the carriers to ship and move goods
within countries in the same region vis-àvis
moving the goods through the land
border, which takes an average of seven to
10 days.
In particular, the
Export Group of
the association
clearly suffered
huge losses due
to logistics
issues
occasioned by
the closure of the
borders
“Nigeria, as the largest economy in West
Africa and one of the largest in Africa, needs
to step up in engaging her neighbors
meaningfully in order to improve our trade
balance, curb smuggling and stop the trend
where other countries are having free lunch
at the expense of the Nigerian economy.
“Government should sensitise citizens to
patronise and consume locally produced
goods, imbibe the benefit of consuming
local goods and government should set a
good example by patronising local products
in all government purchases”.
Food trucks & items should
be tax-free - John
Isemede, ex-DG,
NACCIMA
Dr. John Isemede, a
former Director General of
Nigerian Association of
Chambers of Commerce,
Industry, Mines and
Agriculture (NACCIMA),
said what is fuelling
inflation are weak
production base, lack of
value addition, lack of
export culture; more
money in circulation and
fewer goods /perishable
goods without storage
silos and cold room etc.
Isemede, a United
Nations Industrial
D e v e l o p m e n t
Organization (UNIDO)
consultant on value
chains, added that if
government is saying it is
diversifying into
agriculture, there ought to
be substantial government interventions
to move the farming community away
from the old worn-out and archaic
subsistence farming to commercial and
large scale agriculture.
He went on, “Subsistence farming is what
we have been relying upon. We are a country
that doesn’t have commodity boards
compared to what we have in Cote d’Ivoire
and some other West African countries; how
can we feed ourselves? Where are the silos
for storage?
“Government should also look at
centralizing the taxation system. You can
imagine the number of taxes a food truck
coming from Jos, Maiduguri, Makurdi –
the North - will pay to revenue agencies
before arriving in the southern market.
“This is part of the reason food prices
are escalating. Government should find
a way of harmonizing and centralizing tax
collection by these revenue collecting
organs of government.
“In fact, government should completely
exempt food trucks or locally-grown,
produced food items from tax or levies.
“Government interventions have been
wrong-headed: like the closure of borders.
It breached ECOWAS Agreements.
“Government ought to have used tariffs
to discourage Nigerians’ unbridled
appetite for imported goods and re-invest
the gains in its diversification efforts into
agriculture.
“Before the ban too, government ought
to have taken the organized private sector
into confidence so as to prepare them for
the policy whereby they can fully look at
reaping the gains: growing local capacity
and production.
“Any time government bans any
product, it should discuss with private
sector concerns that could maximize and
reap from such a policy.
“Ban here and there without local
capacity, no plans in place /trend to be
self-sufficient unknown - is dangerous.
“Low production of such goods after
ban would automatically jerk up both
price and lead to hoarding.
“We are a nation that is import-based
not export-thinking”.
Funds can never be enough
for agripreneurs – Gimba
Ahmad Suleiman Gimba, lecturer at
College of Administration, Management,
& Technology, (CAMTECH) Potiskum, Yobe
State, said the report released by the World
Bank is alarming and most disturbing to
realize that additional seven million
“Nigerians have plunged into poverty.
Therefore this is an indication that the
poverty ratio has risen once more”, Gimba
said.
“Both the private and public sectors need
to take agricultural business as a priority
and inject funds substantially”, he added.
“The agric products, whose production has
collapsed in the last two years, are the
consequences of the agric products that have
vanished perhaps ten or more years ago.
“Because of successive governments
neglect, food crops first like wheat, maize,
cassava and some few have suffered with
consequential low output. “Mostly, farmers
view their expenses, other challenges and
difficulties; then they migrate to a more
profitable farming venture with higher
yields.
“Cash crops have suffered a similar issue.
Nigeria has lost wheat, barley, cotton
among others.
“Farming output has diminished and has
completely changed the agricultural
environment. Therefore, the Nigeria society
has to reflect the changes.
“Some of the effects that can be seen
generally are the cumulative rise in prices
attached with increase in the cultivation of
rice, soya, sweet potato, millet and few other
crops.
“This clearly attributes the practical
increase of their quantities with their
respective prices.
“But all these are caused by the systematic
high prices of fertilizer, farm inputs,
implements and tools, surrounded by very
poor agric mechanization.
“Food prices in Nigeria have been
rising every day without control,
regulation or soft pedaling because
government cannot stop spending on the
critical agricultural sector.
“In fact, governments in advanced
countries have continued to provide
subsidies to farmers and agripreneurs.
“Furthermore, those perishable food
items cannot be given clear explanations
because of its poor, local and unimproved
methods of storage, transportation and
handling. Their prices vary depending on
the everyday market, i.e. daily price effect.
“When the market becomes
uncontrolled in manner and attributes, it
is government that can dominate it and
bring it to under control; otherwise it may
take longer than expected for it to
stabilize.
“As a follow-up, the Federal
Government needs to ensure that local
governments are functional especially in
agricultural services.
“As a matter of fact, the National
Assembly needs to amend the local
government services and make them fifty
percent agricultural. This will indeed help
Nigeria out of food crises in the medium
and long term”.