What Tinubu Must Do To Avert Food Riots In Nigeria

 By Steve Onyeiwu

AS the saying goes, a hungry man is an angry man. He is also a restive and dangerous man. Nigerians are already very angry and weary about the country’s severe economic challenges; the lack of inclusivity in economic development; the high unemployment rate; extreme poverty; infrastructural decay, pervasive insecurity, and a bleak economic future. For many Nigerians, a persistent and steep increase in food prices would be the last straw that jolts them into violent food riots. 

Prof Onyeiwu 

President Bola Tinubu understands the severity of the problem when he declared a state of emergency on food security in July 2023, and the formation of a Presidential Task Force on food insecurity early this month. It would be recalled that Acting President Yemi Osinbajo also set up a similar task force in February 2017. But long-term solutions require much more than the mere setting up of a task force. Nigerians are sick and tired of task forces, special committees, advisory councils, high-level summits, council of experts, technical committees, extraordinary body of thinkers, leaders of thought, etc. They want action and impactful results, not admonitions, regurgitated solutions, and empty promises.

Rising food prices in Nigeria is very intriguing, considering that food prices have been falling globally since January 2023, according to data from the Food and Agriculture Organisation, FAO. The world food price index fell from 131.6 in January 2003 to 118.0 in December of the same year, representing a decrease of about 10 percent. One factor that is causing global food inflation to decline is the easing of COVID-era supply chain bottlenecks, as well as falling oil prices, which has reduced transportation and production costs.

In contrast, Nigeria’s National Bureau of Statistics, NBS, announced that the average price of food in the country increased by a whopping 34 percent during the past year. Rising food prices is responsible for the historic 29 percent inflation rate in Nigeria. Beyond statistics, most Nigerians I spoke with in the past year, including middle-class households, complained that food has become unaffordable. During the July 2023 food crisis, I did a back-of-the envelope calculation of food cost in the country. I estimated that a moderate-income family of four, consuming staple foods like egg, milk, bread, rice, beans, garri, beef, catfish, plantains, and vegetable oil, spent about N80,000 monthly on food. Today, that same family would spend at least N100,000.   

Rising food prices are problematic because they reduce the real purchasing power of households, and shift expenditures away from essential items such as health, education, housing, etc. Data compiled by the World Economic Forum show that the average Nigerian household spends about 56 percent of income on food (the highest in the world!). Three other African countries with high expenditures on food as a percentage of income are: Kenya (46.7 percent), Cameroon (45.6 percent), and Algeria (42.5 percent). To put things in context, countries like USA, UK, Canada and Australia spend 6.4 percent, 8.2 percent, 9.1 percent and 9.8 percent, respectively. This is consistent with Engel’s Law in Economics, which posits that poor households typically spend a larger proportion of income on food. A corollary of the law is that, as income rises the proportion spent on food decreases.

Why are food prices rising in Nigeria, whereas they have been falling globally? First, as an import-dependent economy, the depreciation in the value of the naira has resulted in steep increases in the prices of imported food (rice, sugar, milk, beverages, frozen food, etc.). For instance, only 1-2 percent of the roughly six million metric tonnes of wheat that Nigeria consumes annually is produced domestically. The war in Ukraine has had a deleterious impact on food prices in Nigeria, as the country imports wheat from Russia and Ukraine, in addition to fertilizers from the former.

Low productivity in the agricultural sector has made it difficult for output to keep up with population growth. Nigeria’s population has been growing by about 2.4 percent per annum, while the growth of agricultural value added is a paltry 1.8 percent, according to the World Bank. Rising production costs and supply shortfalls in the agricultural sector have been exacerbated by the abrupt removal of fuel subsidies, instability in food-producing areas of the country, deteriorating rural infrastructures, climate change and the exodus of rural dwellers to urban centers in search of elusive opportunities. 

Rising food prices is a major problem in Nigeria and may precipitate food riots across the country, if not addressed effectively and urgently. The high unemployment and poverty rates in the country imply that many Nigerians suffer the double-whammy of low income (or no income at all) and rising food prices. Wages have also been very stagnant, causing significant decreases in the real purchasing power of workers. It is perplexing that wages and earnings in Nigeria are not indexed to inflation. In the United States, retirees and government workers are statutorily entitled to Cost-of-Living Adjustment, COLA, to their earnings, which is indexed to the prevailing rate of inflation.

Thus, the demand by the Nigeria Labour Congress, NLC, for a significant increase in the minimum wage is unassailable and long overdue. It is now obvious that the so-called minimum wage of N30,000 in Nigeria is a “starvation wage”. Nigeria is one of few developing countries with no food-related safety nets for the poor. Perhaps more worrisome is the fact that the Nigerian financial system has not evolved to the level whereby people could easily obtain credit to smoothen short-term falls in consumption, as households in other countries do. Poor Nigerians have become victims of shylock and predatory payday companies that charge exorbitant interest rates for short-term credit. 

There are short-term and long-term solutions to Nigeria’s food affordability problem. In the short-term, the state and Federal governments should scale-up their food palliative measures and reach more vulnerable people. The duration of the palliatives should be increased to at least one year. It is unconscionable that a resource-rich country like Nigeria does not have an institutionalised safety net for food.

President Tinubu’s decision to release over 100,000 metric tonnes of food from the national food reserve is commendable. That is what reserves are meant for, though it is unclear how food from the reserve is being distributed; whether it is reaching those who are most in need, and whether the mode of distribution would help tame rising prices. Non-governmental organisations, such as religious institutions, should mobilise resources for supporting the food needs of members and non-members. But short-term palliative measures won’t solve the problem; only bold and revolutionary measures will. 

To address the problem of rising food prices, Nigeria could learn some lessons from countries that have been successful with food security and affordability. One such country is India, which in the 1950s and 1960s experienced food shortages so severe that it became known as the “begging-bowl” nation. 

But by making food self-sufficiency its top economic and foreign policy priority in the 1960s, India has succeeded in jettisoning its “begging bowl” image and has become a net exporter of food. One major surprise a first-time visitor to India would experience is the abundance of food at every nook and cranny. 

During one of my visits to the country, I found that monthly food expenditure at the cafeteria of my host university was only about 2600 Rupees (approximately $30) for a very sumptuous three-square meal, including appetizers, desserts, and non-alcoholic beverages. Low food prices have enabled the Indian government to offer safety nets, mainly by way of giving poor households “food rations”. 

*Onyeiwu, a Professor of Economics, writes from Meadville, Pennsylvania, USA. He is the author of Emerging Issues In Contemporary African Economies