Depreciation of Naira, farmers-herders clash responsible for soaring food prices

Nigerians have blamed naira depreciation, conflicts in food producing regions and soaring transportation expenses among other factors for the increase in the prices of food items and other costs.

The latest food price watch for March 2024, published by the National Bureau of Statistics (NBS), revealed that certain food items have witnessed over 100 per cent year-on-year increases.

Mrs. Ijeoma Ezeasor, a Director at Cutix Plc., emphasized the adverse effects of foreign exchange instability, particularly at the ports, exacerbated by practices within the Nigeria Customs Service which are placing local manufacturers at a disadvantage.

Ezeasor further noted the prevalence of non-state actors extorting funds from agricultural transporters along highways, exacerbating the cost burden on consumers.

For traders like Bunmi Saheed, a middle-aged wholesale grocery seller in Lagos,  scarcity-driven price hikes, attributing them to the unfortunate circumstances facing farmers, many of whom have been either killed or injured.

She further explained the cost of running her business has more than doubled over the past two years.

“I started with N400,000, Then, with N100,000 you could buy four bags of rice. But now that amount can only buy 1 bag and a half. Can you imagine that?” she explained, citing staggering increases in the prices of essential commodities like rice and beans.

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Another trader lamented the dwindling initial capital and the challenge of sustaining the business amidst escalating costs.

“We’re grappling with the impact of the price hikes. Our initial capital is dwindling, making it increasingly challenging to sustain the business. As a result, you’ll often find us injecting additional funds when we get to the market.

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A civil engineer in Lagos, Kayode Brito lamented the ripple effect of inflationary pressures stemming from various national challenges.

Ogaga Ologe, Finance Director of Cadbury Nigeria Plc, stressed that attributing rising costs solely to factors like diesel prices is no longer sustainable.

He pointed out the inevitability of price adjustments to reflect fluctuating input costs, citing the ongoing instability in the economy as a driving factor.

Ologe concluded that maintaining price stability amid changing economic conditions poses significant challenges for manufacturers, underscoring the need for a more stable economic environment to mitigate such fluctuations.

During the last Monetary Policy Committee (MPC) meeting held between March 25 and 26, 2024,  governor of the Central Bank of Nigeria (CBN), Yemi Cardoso emphasized that new inflation drivers were emerging, extending beyond conventional monetary factors.

He also pointed out seasonal factors such as price hikes during religious fasting and festive periods that are contributing to price cyclicality.

Cardoso advocated for collaborative efforts between fiscal and monetary authorities to effectively address these evolving sources of inflation and achieve comprehensive price stability.