Jollof rice is the one meal that is common to all parts of Nigeria. The SBM Jollof Index is a composite index that tracks how much it will cost to make a pot of jollof rice across 12 markets in seven states in the six geopolitical zones for a family of five or six, the average rural and urban family size in Nigeria.
In the July 2019 edition of the SBM Jollof Index, we chronicled the trend of the index over the three years from July 2016 to June 2019. In the last quarter, a landmark policy impacted significantly on some of the components of the index. In August, Nigeria announced the closure of its land border with the Benin Republic in order to tackle cross border smuggling of rice, the major component of the Jollof Index. The result of this has been a sharp increase in the price of rice as well as of frozen turkey and chicken across the country. The impact of this spike is more marked in relatively richer parts of the country, as demand for these items have remained high while supply is affected by this policy.
These factors contributed to the trend reversal observed on the Jollof Index. Since mid-2018, there had been a general decline in the Jollof Index as the effects of the recession receded, and the inflation driven highs of 2016/2017 abated, bringing some respite to Nigerians who already spend as high as 60% of their income on food. In some cases, as we found in this SBM study, some Nigerians already spend more than what they earn monthly on just food alone, making any policy that impacts on food prices extremely important. Since April 2019, there has been a slow rise in the Jollof Index. Even during the Sallah festivities, this slow increase trend continued. However, from late July and August, the Jollof Index has been driven to the highest it has ever been, eclipsing even the 2016/2017 highs, fuelled by the drastic measures the government took to curb smuggling of rice and inadvertently poultry and vegetable oil. On the average, Nigerians pay 60% more for the family pot of jollof today than they did three years ago. This of course must be placed in the context of the drop in the purchasing power of most Nigerians due to the devaluation of the currency from ₦199 to ₦360 for the dollar.
On 14 October 2019, the government announced a total closure of Nigeria’s land borders to all goods. This is bound to exacerbate this trend, as shown by the appeal, on the same day, by the Governor of the Central Bank of Nigeria to rice growers and millers not to increase prices of the product. The CBN governor’s appeal indicates that the government is aware that local capacity is grossly inadequate to meet demand, and accordingly prices are bound to be driven even higher as producers seek to profit from the situation, regardless of appeals to patriotism.
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