Nigerians are currently being tormented by hyperinflation as a result of drastic monetary and fiscal measures by the President Bola Ahmed Tinubu administration, especially the devaluation of the Naira and the removal of subsidy on Premium Motor Spirit (PMS). From North to South, East to West, the prices of staple food items, in particular, have doubled from what they were in the last six months, and significantly since the end of May 2023, when this government was inaugurated.
For instance, a 50kg bag of rice that was sold for N27,000 in February this year has jumped to N45,000 in July; a tuber of yam that used to cost N700 in February has doubled to N1,500; a loaf of bread that used to go for N600 in February is now above N1,000; and sugar that used to sell for N29,000 in February has jumped to N42,200 as of the beginning of August.
Market intelligence shows that the prices of every food item that the common man depends upon for survival have been hiked beyond reach.
The federal government has taken two steps. First, were the palliatives promised last month in a desperate attempt to forestall the planned nationwide strike action by the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC), which included the plan to distribute 100,000 bags of rice in each of the 36 states of the federation. This is not seen to have been implemented with the urgency it demands, just as other interventions are slow in coming.
So, this second measure, the special grant of N185 billion, put at about N5 billion for each state, is a welcome development. It is a good strategy for the government to devolve the distribution of palliatives to states, but we must state clearly that this is not enough. More needs to be done to ameliorate the suffering occasioned by the new policies. We also call on state governments to ensure that the funds are not diverted to unrelated issues.
There is an urgency in the current situation and we urge state governments to be mindful of that. They should embark on procurement of the food items immediately. Though, each state does not have the same population, it is still possible to cushion the effects of inflation among the people if N1.3 billion worth of food items is sent to each of the three senatorial districts in every state of the federation. Even if it means importing the food items, the state governments should do so and sell directly to buyers at very reduced prices while putting in place mechanisms to guard against hoarding. That way, the people are able to get food at affordable rate, and the cost of food items in the markets will drop generally. There must be no discrimination in the implementation of this initiative; all Nigerians should be carried along. Part of the immediate steps the government must take is to reduce tariffs on some essential food items so that they may be imported and sold to Nigerians at a relatively cheaper cost. In the aftermath of Russia’s invasion of Ukraine, which interrupted the food supply chain from Eastern Europe to other parts of the world, several countries reduced import duties on food supplies in order to cater for the needs of their citizens. For instance, South Korea had to cut import duty on wheat flour to check rising food prices and make the state-run Korea Agro-Fisheries Trade Corp import wheat flour to boost domestic supply and stabilize food prices. Nigeria could suspend import duty on staple food items in this emergency period in order to bring down food prices.
Also, relevant government agencies must come up with measures to support farmers during the dry season in the next few months. In order to bring down the cost of staple foods, governments, both federal and state, must show interest in and commitment to the cost of farm inputs, like fertilizers, herbicides, and even farm implements. The cost of food production has continued to escalate because of the high costs of inputs and labour.
It has become imperative for the government to deliberately subsidize these costs and ensure that such subsidies are enjoyed by peasant farmers, not briefcase wielding farmers who are more rent-seeking than committed to food production. If there are no deliberate measures to bring down the cost of food production, Nigeria cannot exit the revolving cycle of high food prices.
We assert that the measures the government has taken to cushion the effects of the inflation on the people are temporary, as the causes of the inflation – devaluation of the Naira and the removal of subsidies on PMS – will have longer-lasting effects on the Nigerian people. In order to increase food production, the government must do everything possible to improve security of persons, communities and farm lands. The battle against bandits and terrorists is no longer about reining them in; it is now about the survival of the Nigerian people. Subsistence food production by peasant farmers is hampered by the deadly activities of bandits and terrorists; even the Anchor Borrowers Scheme (ABS), credited for food production under the last administration, is lost to the menacing activities of those who have occupied our forests. Strategic, drastic, and enduring measures must be taken to defeat them, probably, before the dry season farming begins.