Nigerian Economic Crises Force 300% Rise in Food Prices
January 2, 2017
Nigeria Punch
The outgone year will remain in the memory of most Nigerians for different reasons, as Nigeria entered its worst economic recession in decades and food prices recording astronomical increases, IFE OGUNFUWA writes
The prices of staple food items in the country increased considerably between January and December 2016, with many selling at triple their prices at the end of the year.
Analyses of the Novus Agro Commodity prices between January and December showed that the market prices of palm oil and maize tripled, while garri and imported rice doubled in price in the same period.
A 25-litre keg of locally produced palm oil sold for an average of N6,190 in January. The price gradually increased to peak at N18,650 in November, and was sold for N18,390 in December.
In addition, a 100kg bag of maize, which cost N6,000 in January, reached its peak price of N17,515 in December of the same year, increasing by 192 per cent.
The price of a 60kg bag of garri, a major staple food in the country, rose beyond the reach of the poor, recording a 123 per cent rise from N5,940 to N13,240 in the period.
The value of a 50kg bag of imported rice, which was N9,400 at the beginning of the year, doubled towards the end of the year, reaching a peak of N18,275 in November, and selling at an average of N17,710 in December.
Also, the market price of the 100kg bag of beans rose from N20,165 in January to N33,475 by December.
In addition, the cost of a 25-litre vegetable oil more than double from N6,800 in January to N16,500 at the end of the year, recording 143 per cent price increment.
A crate of egg now sells for N1,300 on the average from N900 in the earlier part of 2016.
Analysts say the increasing prices of both locally-produced and imported foods was mainly the result of the depreciation of the naira, while the hike in fuel and transport costs was an additional factor.
The increasing food prices has contributed to the high rate of inflation in the country, according to the National Bureau of Statistics.
According the NBS Consumer Price Index data, which measures the average price of goods and services in the country within a specific period of time, the rate of inflation had been on a steady increase since the beginning of 2016.
In January, the country recorded 8.8 per cent inflation rate, which soared sharply to 11 per cent in February. Inflation continued its steady rise to 12.2 per cent in March, 13.4 per cent in April, 15.1 per cent in May and 16.2 per cent in June.
The CPI also showed that in July, August, September and October, the inflation rate climbed to 17.1 per cent, 17.3 per cent, 17.9 per cent and 18.1 per cent, respectively.
In November, the Consumer Price Index increased by 18.48 per cent year-on-year, following a 18.3 per cent growth in the previous month, and above market expectations of 18.4 per cent.
This showed that the inflation rate accelerated for the 10th month to the highest level since October 2005, as prices continued to rise for imported and locally-produced food items, clothing, housing, utilities and education, among others.
To ease the pressure on the naira and forestall the free fall of the naira against the United States dollar, the Central Bank of Nigeria introduced a flexible exchange rate policy and pegged the official exchange rate at N305 to one dollar.
Before then, the currency had been pegged at about N197 to a dollar since March 2015.
One of the significant factors that contributed to the general food price rise was the cost of transportation occasioned by the new pump price of petrol as introduced by the Nigerian National Petroleum Corporation, which saw 67 per cent increase from the former N87 per litre to a maximum of N145.
Highlighting other factors responsible for the changes in food prices, the President, All Farmers Association of Nigeria, Kabiru Ibrahim, said that disease epidemic, which affected the output of some crops, pushed food prices up.
He said, “We no longer import food items in large quantities like we used to do. Take rice for instance, we have reduced its importation. We are presently depending more on local production and it is not enough at this point, which makes the food products to appreciate in value. With time, this will normalise.
“Some diseases, like the tomato Ebola, happened in epidemic proportions and there was at the same time a ban on imported tomato paste. It was scarce, which made it costly.
“Recently, we have bird flu affecting our chicken, which is a serious disaster, because it wipes out the whole flock and drives farmers out of business and most times, they need help to get back in business. The scarcity of egg and chicken due to bird flu is affecting the prices of foodstuff, including small chickens.”
Nigeria Punch
The outgone year will remain in the memory of most Nigerians for different reasons, as Nigeria entered its worst economic recession in decades and food prices recording astronomical increases, IFE OGUNFUWA writes
The prices of staple food items in the country increased considerably between January and December 2016, with many selling at triple their prices at the end of the year.
Analyses of the Novus Agro Commodity prices between January and December showed that the market prices of palm oil and maize tripled, while garri and imported rice doubled in price in the same period.
A 25-litre keg of locally produced palm oil sold for an average of N6,190 in January. The price gradually increased to peak at N18,650 in November, and was sold for N18,390 in December.
In addition, a 100kg bag of maize, which cost N6,000 in January, reached its peak price of N17,515 in December of the same year, increasing by 192 per cent.
The price of a 60kg bag of garri, a major staple food in the country, rose beyond the reach of the poor, recording a 123 per cent rise from N5,940 to N13,240 in the period.
The value of a 50kg bag of imported rice, which was N9,400 at the beginning of the year, doubled towards the end of the year, reaching a peak of N18,275 in November, and selling at an average of N17,710 in December.
Also, the market price of the 100kg bag of beans rose from N20,165 in January to N33,475 by December.
In addition, the cost of a 25-litre vegetable oil more than double from N6,800 in January to N16,500 at the end of the year, recording 143 per cent price increment.
A crate of egg now sells for N1,300 on the average from N900 in the earlier part of 2016.
Analysts say the increasing prices of both locally-produced and imported foods was mainly the result of the depreciation of the naira, while the hike in fuel and transport costs was an additional factor.
The increasing food prices has contributed to the high rate of inflation in the country, according to the National Bureau of Statistics.
According the NBS Consumer Price Index data, which measures the average price of goods and services in the country within a specific period of time, the rate of inflation had been on a steady increase since the beginning of 2016.
In January, the country recorded 8.8 per cent inflation rate, which soared sharply to 11 per cent in February. Inflation continued its steady rise to 12.2 per cent in March, 13.4 per cent in April, 15.1 per cent in May and 16.2 per cent in June.
The CPI also showed that in July, August, September and October, the inflation rate climbed to 17.1 per cent, 17.3 per cent, 17.9 per cent and 18.1 per cent, respectively.
In November, the Consumer Price Index increased by 18.48 per cent year-on-year, following a 18.3 per cent growth in the previous month, and above market expectations of 18.4 per cent.
This showed that the inflation rate accelerated for the 10th month to the highest level since October 2005, as prices continued to rise for imported and locally-produced food items, clothing, housing, utilities and education, among others.
To ease the pressure on the naira and forestall the free fall of the naira against the United States dollar, the Central Bank of Nigeria introduced a flexible exchange rate policy and pegged the official exchange rate at N305 to one dollar.
Before then, the currency had been pegged at about N197 to a dollar since March 2015.
One of the significant factors that contributed to the general food price rise was the cost of transportation occasioned by the new pump price of petrol as introduced by the Nigerian National Petroleum Corporation, which saw 67 per cent increase from the former N87 per litre to a maximum of N145.
Highlighting other factors responsible for the changes in food prices, the President, All Farmers Association of Nigeria, Kabiru Ibrahim, said that disease epidemic, which affected the output of some crops, pushed food prices up.
He said, “We no longer import food items in large quantities like we used to do. Take rice for instance, we have reduced its importation. We are presently depending more on local production and it is not enough at this point, which makes the food products to appreciate in value. With time, this will normalise.
“Some diseases, like the tomato Ebola, happened in epidemic proportions and there was at the same time a ban on imported tomato paste. It was scarce, which made it costly.
“Recently, we have bird flu affecting our chicken, which is a serious disaster, because it wipes out the whole flock and drives farmers out of business and most times, they need help to get back in business. The scarcity of egg and chicken due to bird flu is affecting the prices of foodstuff, including small chickens.”
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