Food, food and food remains the most constant nutritional and vitamins’ value human beings cannot do without. Our existence depends on it or else humanity will go into extinction.
Food is not something anybody jokes with or keep enmity with .
This is the reason serious nations make deliberate efforts toward not just food security, but strategic abundant, availability, and affordable foods for the people. In other words, there is greater attention of government policy direction that defines food essentially as number one priority among the scale of preference. In this regard, policy to make food available all year round and affordable are not toyed with no matter the economic technical conundrum, call it inflation or food inflation.
Food must be on the table for every household. Recently, there was soaring energy and food prices, with inflation of over 7.5% in the US and above 5% in Europe and the UK. There, the governments are not sleeping over the situation. Taming food inflation headlong through pragmatic efforts are being deployed because the leaders grasp deeply, the social cost of food inflation beyond just the economic technicality of it.
What then is inflation? With hindsight, a simplistic definition of inflation is the general rise in the prices of goods and services in a particular country, at a particular period, which results in a fall of the value of money.
In this way, inflation simply devalues and weakens a country’s currency, as well as erodes the purchasing power of income and wages available for workers to spend on food and other desired needs
Significantly, food inflation if let loose, would affect mostly the poor who are most vulnerable.
Nigerians are asking what is fuelling food inflation in the country. Specifically, they want to know how government’s policy failed to tame food inflation because successive governments, we acknowledge, did have one or more projects in this direction.
Space would not permit us to begin a narrative around failed government policy, formulated and partially or fully implemented before 1999. However, Nigerians would never forget how the military government truncated the 1st,2nd, 3rd, 4th and Rolling Development Plans, with sizeable segment of these development plans focusing on food self sufficiency and economic self reliance through local resource development. Moreso, they are laudable economic framework, with multi sectoral approaches, but were jettisoned due to lack of continuity of government policy.
Meanwhile, a modest history of how our nation’s economic policy was formulated and implemented since 1999 when civil democratic government returned, showed nothing significant has been achieved to address economic challenges. And for us, one of such troubling issues is the rising food inflation.
Noticeably, the aftermath of successive governments in Nigeria’s failures on economic policy always get every concerned citizens thinking and, one wonders how we got so deep in the mess we found ourselves even though we are resources blessed nation.
Surprisingly, we are not lacking on policy or policies formulation and development ideas. This in fact, demonstrates why a lot is expected from us as Africa’s most populous nation with brilliant minds and skills.
Sadly, Nigerians are looked down on, as our green passport on any immigration desk outside our shore is scrutinized and interrogated under heavy suspicion. Why, because we by ourselves care less about our dignity, and what the outside world has come to know about us is one of corruption’ and looting’ of public funds that has permeated our government structures as exhibited by people who are lucky to have been elected or appointed.
Some of us as political analysts or economists are ashamed and disappointed, because the government over time would always create the impression of walking the talk of many of it’s economic policies.
Alas, to the greatest surprise of Nigerians, it is all media hype and show, that has never translated the economy to lifting the citizenry out of poverty.
Nevertheless, for the period under review, many Nigerians can never forget in a hurry, the following policies; National Economic Empowerment Development Strategy (NEEDs), State Economic Empowerment Development Strategy (SEEDs), and the Local Government Economic Empowerment Development Strategy (LEEDs).
These were jealously guarded policy of the Olusegun Obasanjo’s administration (1999-2007).
However, Obasanjo’s dead on arrival third term agenda made a mess of that brilliantly coined policy with massive input from World Bank experts and others. We would not also fail to mention how this same policy was linked to New Partnership for African Development (NEPAD).
Another is the 7- Point Agenda of Umaru Musa Yar’Adua (2007- 2010), with deliberate focus on Electricity, Rule of Law, Health, and Transportation,while Agriculture was tailored to reduce food importation.
Similar to the above was the Transformation Agenda of Goodluck Jonathan (2010 -2015), that even produced Transformation Ambassadors across and outside the country, ushering in, a new lexicon called economic diversification and clear approach towards agro produce export orientation and cassava bread made famous by then minister of agriculture, Dr Akinwunmu Adeshina.
Then came the Economy Recovery Growth Plan (ERGPs) of the Muhammadu Buhari administration (2015- 2023), stepping the policy economic forward with so much funding for agriculture in the name of economic diversification.
A whooping N1trillion went into rice, wheat, casava and others under the Central Bank of Nigeria’s Anchor Borrowers Schemes, and many other fundings through the National Agricultural Land Development Agency (NALDA).
Today, we are being harassed by the government of President Tinubu left,right,centre, back and front, depending on which side the harassment is coming from, with his Renewed Hope Agenda, and policy directive of making food and water resources as primary focus of National Security Council.
Critically, all of the above mentioned policies are trackable to tackling food inflation or food related problems being faced in the country. Hence in the wisdom of the government, food and agricultural elements are of national security importance.
Whether they understood the import of food inflation in all their policy actions is another issue.
However, food inflation is scary, dreadful, and dangerous, as it reduces the nutritional and vitamins value of the poor, denying them the necessary health benefits through food consumption.
This now brings us to the recently released August 2023, general inflation rate of 25.8 per cent by the National Bureau of Statistics (NBS), which as usual, has drawn attention to the flipping floppy economic situation.
The NBS in its Consumer Price Index (CPI) report for the month of August 2023, said headline inflation rate increased to 25.80 per cent relative to the July 2023 headline inflation rate of 24.08 per cent.
According to the bureau, it showed a 1.72 percentage point increase when compared to the July 2023 headline inflation rate. On a year-on-year basis, the headline inflation rate was 5.27% points higher compared to the rate recorded in August 2022, which was 20.52%.
However,what was more fearful was the damaging figure of food inflation of 29.34% rate.
The NBS noted that food inflation for August 2023 rose to 29.34 per cent, representing a 2.35 percentage point increase from 26.98 per cent recorded in the previous month, on a year-on-year basis, which was 6.22% points higher compared to the rate recorded in August 2022 (23.12%).
Our fear about this double-digit food inflation is that it has persisted for many years untamed. And we are very sure that this latest figure is linked not just to distort fiscal and monetary policy presently, but previous ones are to be blamed also.
Major food commodities that are daily consumed by Nigerians such as bread, cereals, milk, meat, fish, potatoes, yam, and other tubers, soft drinks, and fruits are not without government policy intervention.
Meanwhile, the rise in food inflation are seen in wheat flour with price increase of 43 per cent to N38, 000, rice with 91 per cent increase to N61,000, palm oil with 55 per cent increase to N31,000, sugar with 75 per cent to N42,000 and tomatoes with 82 per cent increase to N40,000, according to NBS.
Fundamentally, economists would always attribute demand and supply paradigms as factors that drive inflation, and most especially, food price inflation. Consequently, one may not be surprised at the report going by the many years of structural decay and successive governments’ poverty of economic governance both in fiscal and monetary policies deployment to address the country’s food inflation’s woes.
For instance, the Central Bank of Nigeria’s (CBN) projection that the country’s inflation rate would drop to a single digit range of 6–9 per cent has failed,using it’s interest rate currently standing at 18.75% as monetary measure to fight inflation.
Even though we acknowledge the relationship between interest rate and inflation, one cannot become a threat to other, in this case, stifling supply of money and credit to businesses.
Lack of understanding in this regard mess up the apex bank’s strategic policies that cut across multi-sectorial macroeconomics and microeconomic variables failing to tame inflation.
Another is the poverty of fiscal policy through government spending to address poor infrastructural facilities to aid farming activities across the country, with federal government throwing money on cosmetic and ad hoc agricultural projects, leaving out the core needed project in terms of electricity,storage facility, roads and better transport logistics for rural farming communities and others that are the base station of food supply.
Similarly, fiscal policy failure is the multiple taxation of government at the federal ( 9 tax items) and sub-national levels (46 tax items).
The entire government fiscal mandates is all about revenue drive without balancing how this would go back efficiently to tackle inflation.
A case in point is the huge operational cost of manufacturing sector that are more in food commodities sub sector bear together with taxes and fees being paid.
Lastly, is the failure in our national security architecture to arrest the persistent insecurity that is increasingly affecting farming communities and wrecking havoc on food chain and commodity supply in the country.
The reality of the foregoing cannot be overemphasized enough; the fall out of the burden is fueling food inflation rate.
Sadly, despite trillions of naira being spent as an intervention in agriculture, security,infrastructure amongst others, the increase in food inflation rate and the surge in prices of bread and cereals, and protein foods like fish, meat, egg and beverages as reported by the NBS food price index are unbearable.
Arguably, the centrality of this piece is that the failure of government’s policy to address food inflation tends to aggravate it .
What can be done to address food inflation in Nigeria, seriously, is to remind the federal and state governments that poverty of infrastructural is the bane of food inflation in the country.
There is poor state of our roads, poor storage food facilities, multiple taxes, and high cost of transportation.
We believe it is appropriate that the governments across board gets involved directly in collaboration to tackle food inflation headlong.
This can help us drive down negative impact of food inflation resulting from disjointed policy direction.
In addition, it is not a bad idea for the government to put in place, a price control board to tackle the menace of middlemen and women taking advantage at this time.
On the other hand, we acknowledge the fact that to deal with inflation, the CBN must have a grip on the supply of money, and credit must not be let loose. In this way, CBN’s stance in creating new money must be justified through steady interest rate rise, with a target to boost investment and employment generation.
For us, CBN using interest rate to fight inflation seems to not be working.
Rather, it’s wreaking havoc on the poor. Poignantly, it will be a great service if the CBN focuses on curing inflation that tends to foster economic inequality and divide our society.
Ours is for a monetary policy that prioritises the prevention of inflation with decisive action to remove more Nigerians from poverty and hunger.
Another is a moderation breaker from the central bank tightening its monetary stance, although the last Monetary Policy Committee (MPC) for 2023 retains the 18.75% interest rate and projections of over 3% economic growth for the country.
We are expecting a paradigm shift from Dr Olayemi Cardoso led CBN and it’s brand new four deputy governors.
To put out strong measures to reduce unabating FX pressure on the naira in the currency market is quite enormous, because FX market unification has brought it’s own problems, with I&E Window creating it’s own currency round tripping and speculators.
Our take is to stop every factor responsible for eroding the purchasing power of Nigerians and depreciation of the naira is welcome.
Since the fear of farmers returning to their farmlands due to clashes with the herders in the Northern Region as well as in some Southern part of the country still persist, there’s need for stronger security action in this regard.
In closing, we need to reason around the ugly role of unscrupulous individuals’ proclivity in food inflation. Consequently, it’s time for the Nigerian authority to fight inflation with a tripod of monetary, fiscal and trade policies in collaboration with sub-national government.
Adefolarin A. Olamilekan
Political Economist
08107407870
