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Tuesday, July 23, 2024

How inflation threatens agricultural revolution in Nigeria

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“My pension is only N90, 000 monthly; my children, two undergraduates, and one graduate all rely on this money and my wife’s little income from her petty trading.

“With the rising prices of food, we can barely afford to eat twice a day, not to mention meeting other needs.

This is the story of Mr David Omotayo, a pensioner whose children still rely on to meet their needs amidst other family demands in the face of increasing food prices and inflation.

The situation not different with Ms Blessing Ike, who said inflation has negatively affected her business and eroded her purchasing power.

“There is no profit from this business anymore, we are barely managing. The high prices of foodstuffs coupled with the increasing price of cooking gas which I use for my business, leave me with no profit,” she told the News Agency of Nigeria.

For Mrs Amina Audu, a civil servant, the high cost of living caused by inflation has reduced her living standard.

She says that 90 per cent of the family income is used on expenses ranging from food to other consumables such as cooking gas and electricity bills.

“It is impossible to save money in recent times”, Audu told NAN.

This is the reality in many Nigerian homes as inflation rate hits a 17- year high, the highest since September 2005 amid soaring food prices, according to the National Bureau of Statistics (NBS).

NBS statistics shows that Nigeria’s headline inflation rate increased to 21.09 per cent on a year-on-year basis in October 2022, indicating a 5.09 per cent increase compared to 15.99 per cent recorded in October 2021.

According to the Statistician-General of the Federation, Prince Semiu Adeniran, factors responsible for the increase in annual inflation rate include disruption in the supply of food products, increased import cost due to currency depreciation, among others.

Consequently, the average Nigerian cannot afford to purchase some of these staple food items, which the Multidimensional Poverty Index Survey (MPI) report launched on Nov. 17 confirms.

The MPI report revealed that 63 per cent of Nigerians are multi-dimensionally poor, accounting for 133 million Nigerians.

According to The World Bank’s Food Security report, domestic food price inflation remains high around the world. Information between June and September 2022 shows high inflation in almost all low-income and middle-income countries.

The bank, therefore, recommended Social Protection Responses to the Global Food Crisis, advising policymakers in developing countries to focus on the poor through social investment.

“Strengthening national social protection systems can help populations manage shocks and stressors and build long-term resilience to food insecurity.

“Social protection, food, and health systems can work together across sectors to improve food security and nutrition outcomes of vulnerable groups,” the report said.

Similarly, the International Monetary Fund (IMF) says high food insecurity is compounding the Covid-19 pandemic’s scarring effects on the vulnerable in Nigeria.

After its routine official visit to Nigeria in November 2022, the IMF said it anticipates that food prices would continue to increase in Nigeria in 2023 due to high fertiliser prices and recent flooding in many parts of the nation.

“Similarly, further volatility in the parallel market exchange rate and continued dependence on central bank financing of the budget deficit could exacerbate price pressures,” IMF said.

The Fund’s position is contained in its Staff Concluding Statement of the 2022 Article IV Mission in Nigeria.

The IMF recommended strengthening the performance of the agricultural sector as key to job creation, food security, and social cohesion.

However, the Federal Government has debunked insinuations that Nigeria will experience food shortage due to recent floods.

At the 5th Edition of President Muhammadu Buhari Administration Scorecard 2015-2017 series in Abuja, the Minister of Agriculture and Natural Resources, Dr Mohammad Abubakar, assured Nigerians that there would be no food shortage in the country.

Abubakar said in spite of the rising inflation in the country, which he said was a global crisis and the flood disaster notwithstanding, the country would not experience food shortage.

“Absolutely, we have enough to eat in this country. There is no shortage of food.

“Yes there is inflation and an increase in prices, but we have enough food to feed everyone. It is better to have inflation than to have no food. We have enough to eat and we will continue to have enough to eat”, Abubakar said.

Mohammed said one of the measures the government had put in place to ensure food security was dry season farming which would be done by also harnessing some of the flood waters.

However, Sam Amadi, an analyst and Director, Abuja School of Social and Political Thoughts, said: “if we are food secured then we want to see it in its affordability.

“Experts are predicting a difficult time with respect to food in Nigeria. Human security includes food affordability.

Economists have suggested concrete steps to address the rising inflation and food prices in Nigeria.

They also opine that the increasing inflation rate in Nigeria has impacted negatively on the living standard of Nigerians.

Prof. Aminu Usman, a lecturer at the Department of Economics, Kaduna State University, said the rising inflation rate meant devaluation of individual income, which amounted to drop purchasing power.

Dr Ayo Anthony, an economist, said Nigeria’s exchange rate management needed to be revisited; and the cost of production must be looked into before inflation can come down.

“The cost of production must be looked into because inflation in Nigeria is more of cost-push inflation. We have energy costs with diesel and petrol, which are on the high side now”, he said.

Mr Tope Fasua, an economist, advised the federal government to put more efforts into the agriculture sector for increased food production.

“Nigeria is a largely agricultural country, yet 62 years after independence we can’t do better than grow rice. We are also not growing the crops properly and we are not even growing enough crops, diversify across the board, not even the ones we need.”

“So, one place to start is to do more in agriculture and bring some science into agriculture and recognise our luck, capability, and capacity to turn things around”, she said.

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