Nigeria’s bread market: Before we get to Zimbabwe

Nigeria’s bread market is in quandary. ONYEKORMAKA ASABOR, in this feature, writes that urgent action should be taken to arrest the situation

In 2008, most Nigerians joined the rest of the world to have a good laugh at Zimbabwe when the President Robert Mugabe regime allowed bread to be sold at $10m ( Zimbabwean currency). As expected, some ‘churchy’ Nigerians muttered, “God forbid; not our portion.” Then the country had the world’s highest inflation rate at 100,000 per cent.

But with the present Nigerian situation under President Muhammadu Buhari, most Nigerians are no more surprised at the Zimbabwe situation. The reality is here.

Now, the question on their lips is whether Nigeria’s bread market is driven by price fixing or free market forces. The reason for the question cannot be far-fetched, as bread consumers wake up everyday to escaling prices of the commodity, far more than it was sold the previous day. They have continued to grapple with the persistent increase in prices of bread in the last few years.

Findings by Financial Street revealed that since the beginning of the year, prices of consumable goods, especially food, have been on the rise, despite consumers’ low purchasing power, and the trend has not in any way exempted the bakery sector of the economy.

 

Gang up?

In June 2021, while interacting with newsmen, the Chairman, Master Bakers of Association of Nigeria, Port Harcourt Branch, Chidi Orlu, had revealed that price of bread would go up by 30 per cent before the end of the month. He explained that the decision to increase the price was a directive from the National Executive Council of the body, blaming high cost of baking materials in the country.

He said, “In recent times, we have noticed a steady rise in the prices of baking materials. A bag of flour we used to buy at N9,000 has now risen to N16,000. We equally noticed that prices of other items for baking have gone up three times within this year. How can we feed the public with bread in this kind of situation with the old price? That was why the leadership has decided that the prices of bread be increased by 30 per cent, and let those who can afford it buy and eat.”

Orlu, however, warned the public against buying bread that are sold cheaper in the market, stressing that the health implication of such is grave.

According to him, many unregulated bakers and bakeries have resorted to the use of materials that contain high cholesterol and items that are harmful to health, just to make quick money.

He, therefore, called on the National Agency for Food and Drugs Administration and Customer service and theontrol to wake up to its responsibilities by dealing with bakers that do not adhere to the good standards of baking.

To most bread consumers, Orlu’s disclosure of the imminent increase in prices of bread across the country is no more news. MBAN, at the end of its NEC meeting in May, had stated that prices of bread and biscuits would increase by 30 per cent to cushion the impact of rising cost of production. So, Orlu’s disclosure in Port Harcourt was mere reiteration.

The National President, Association of Master Bakers and Caterers of Nigeria, Mansur Umar, who read the statement, affirmed that increase in prices of flour and other baking materials necessitated the development. The association noted that a truck of flour, which was sold at N6m, shot up to N9m.

 

Clamour for market forces

However, Mr Akanimo Ime, a businessman, suggested that the association should look for ways of cutting down cost, rather than resorting to price increase each time they met.

He said, “These people should look for ways of making bread cheaper because each time they meet, they must come up with the announcement that the price of bread has gone up with a fixed percentage of increase.

“They should allow prices of bread to be determined by free-market forces, and they should understand that fixing of price for bread is illegal, as they always collude to set the prices.”

 

Remembering cassava bread

Analysed from the foregoing perspective, bread producers’ inability to find means of making the commodity affordable and letting market forces decide the price rather than fixing it is regrettable, despite huge investment by the Federal Government in the cassava bread initiative for decades.

However, stakeholders regretted that such investment, coupled with the campaign by the President Goodluck Jonathan regime to popularise the initiative, went down the drain.

Hillary Obuseh said, “Were the project successful, it would have by now crashed the demand for and price of wheat flour.”

There is no denying the fact that not few of the bakers then were excited about the promotion of the cassava bread initiative by the Federal Government. Bakers that participated in a series of training organised by a government agency on how to produce cassava bread using composite flour (wheat and cassava), with the hope of accessing the intervention funds provided by the government to attract a lot of investors into the cassava bread production chain, must, today, be in a state of despair. They have realised that the project they delightfully looked forward to its success has become a mirage. Without any iota of exaggeration, the bakers are today disappointed, as the government has dampened their collective enthusiasm in the initiative with its woeful implementation.

To this end, Edwin Iweka said, “The bakers on the platform of the bakers association should find a way of letting market forces prevail rather than engaging in price fixing as being alleged by some consumers.”

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