From Statista’s compilation of food prices in Nigeria in April 2022 (compared to the previous year), using 13 food items as case study, price of eggs went up by about 30 per cent, brown beans rose by 40 per cent and white black-eyed beans rose by 45 per cent.
Statista, an online portal that provides data on the global digital economy, industrial sector, consumer market, public opinion, media and macroeconomic trends, says one kilogramme of beef bone rose by 31.67 per cent, while that of boneless beef rose by 35.31 per cent. The price of bread (500g) rose by 34.65 per cent. One kilogramme of Ofada rice went up by 8.75 per cent, one kilogramme of fresh catfish rose by 25.65 per cent, dried one went up by 22 per cent, while smoked catfish was up by 13.75 per cent. Chicken laps increased by 18.93 per cent.
NBS data
The foregoing market survey carried out since April has gained momentum without allowing consumers a breathing space, as it has compelled them to groan under the weighty market situation, so much that the National Bureau of Statistics recently reported that the country’s inflation rate jumped to nearly 20 per cent in July – the highest in nearly two decades.
NBS says price increases were recorded in necessities, forcing consumers to groan under the July inflation that was calculated to be 19.64 per cent – the highest since September 2005. The bureau found that the highest increases were recorded in necessities like food, clothing, accommodation, fuel and transportation.
Food prices, the NBS reported, have risen steadily in Nigeria for years, due to the effect of climate change, the Coronavirus Disease and widespread insecurity. In a similar vein, in February, when Russia invaded Ukraine, commodity prices soared, affecting the ability of millions of citizens to meet their basic needs.
From hand to mouth
That many salary earners now live from hand to mouth is just stating the obvious. A resident of Agege, Lagos State, Joshua Adenekan, whose monthly pay reportedly hovers between N95,000 and N100,000 depending on the deduction in a given month, said his salary could no longer cushion the impact of economic pressures.
He said, “Bills that I pay at the end of the month have increasingly been mounting due to soaring prices of goods and services. I cannot even talk of going to the market to buy something to feed myself because the prices are not encouraging at all. A loaf of bread that used to be N350 is now close to N1,000. Even some of the bakers in Lagos and Abuja have shut down their bakeries due to the unprecedented high prices of production.”
Enter the CBN
To address the rising inflation, the Central Bank of Nigeria has been strict with monetary policies. It increased interest rate from 11 per cent in January to 14 per cent in July 2022.
Experts were unanimous in the view that there is too much money in circulation chasing a few goods, thus causing inflation. According to them, there is scarcity in supply; hence, the CBN is using the Open Market Operation to reduce the money in circulation. With higher interest rate, people will be encouraged to save in the bank, leading to mop up of liquidity from the economy.
On his part, Jose Olorunyomi said Nigeria, being an import-dependent economy, has further been hit by currency devaluation. This is as the naira has lost more than 30 per cent of its value in eight months. Though he opined that inflation nowadays is a global problem, not peculiar to Nigeria.
He said, “It is not only Nigeria as a country that is passing through this inflationary phase. Even the United States’ inflation is also soaring. Our neighbours, such as Ghana, are already experiencing inflationary rate of over 30 per cent.”
Against the foregoing, it would be recalled that last March, the World Bank estimated that four out of 10 Nigerians live below the national poverty line, while experts predict that inflation rate will increase further in coming months and send many more Nigerians into poverty. Going by the spiralling inflation being witnessed by consumers across the country, the prediction can be said to have come to pass.
As mentioned in one of its reports entitled ‘Nigeria at a Glance’, the Food and Agriculture Organisation of the United Nations stated, “Despite the contribution to the economy, Nigeria’s agriculture sector faces many challenges, which impact its productivity. These include, poor land tenure system, low level of irrigation farming, climate change and land degradation. Others are low technology, high production cost and distribution of inputs, limited financing, high post-harvest losses and poor access to markets.”
Agrotech to the rescue
At this juncture, it is expedient to say that of all the factors militating against bounty production of food in Nigeria, low technology stands as the weightiest of all, as the adoption of agricultural technology or agrotechnology, abbreviated as agrotech, by farmers is capable of rendering other factors inconsequential, if pragmatically adopted and implemented across board.
According to Cletus Iweka, the adoption of agrotech, as done in developed economies, will lead to bounty production, which will eventually crash the prices of food items.
To many that understand basic economics, it is common knowledge that achieving bumper harvest following a promising farming season could lead to better agricultural yield, boost availability and, going by the economies of scale as well as forces of demand and supply, crash prices of food items.
Without recourse to explanation in this context, the law of demand and supply is an economic theory that explains how supply and demand are related to each other and how the relationship affects the price of goods and services. It is a fundamental economic principle that when supply exceeds demand for goods or services, prices fall; but when demand exceeds supply, prices tend to rise.
Gabriel Imudia, a consumer protection advocate, says when adoption of agrotech leads to increased or bumper production of agro products, there is the tendency for the prices of food items to crash.
In staggered chats on how the prices of various food items can be crashed, Financial Street gathered from respondents that the adoption of agrotech, which is the use of technology in agrotech, horticulture and aquaculture to improve yield efficiency and profitability, remains the solution.
