The SBM Jollof Index: A stitch in time saves nine

Food insecurity is a significant problem many Nigerians are currently fighting. Nigerians now discuss food prices the same way the British discuss the weather. The drivers of the problem are complex and multidimensional in nature, hence it has the capacity to get deeper if the government does not put preventive measures in place. These key drivers range from fuel scarcity, poor electricity and storage, and protracted insecurity to reactionary control policies, amongst other issues. Our previous Jollof Index highlighted the issues and recommended viable solutions, but things have remained almost entirely unchanged. The government has not responded to previous warnings about the dire situation and in effect, the country struggles with emerging issues that compound the problem of food insecurity, such as flooding and climate variability.

The SBM Jollof Index is released three times a year, at the end of each of the first three quarters. This quarter’s Jollof Index adopts a system thinking approach that enables it to examine the broader impact of rising food prices in Nigeria, especially as it relates to health and politics. The national average shows that prices continued to rise up till June. Prices of seasoning, curry, pepper, vegetable oil, turkey and onions increased in most markets. The continued increase in prices can be attributed to fuel scarcity, continued foreign exchange restrictions, increased insecurity and the effect of global events, especially the Russia-Ukraine war. In the last few months, there has been fuel scarcity across major cities in the country, and this has had an effect on the cost of transportation and storage of frozen food. Major producers of grain are contemplating restricting exports until the global shorting is over. Nigeria thus needs to store grain as a buffer during this period.

Another driver of food prices is production cost which has been affected by diesel prices. At the moment, diesel sells at over ₦800 per litre as against ₦539.32 which it sold for at the end of Q1. This has increased the operating costs for most businesses, thereby increasing the final cost of goods to consumers. Apart from these external factors that drive prices, the internal organisation of open markets (where Nigerians purchase most of their groceries) influence the cost of items. While these could go unnoticed when food inflation was at moderate levels, increased food prices spotlight every price driver.

The average cost of making a pot of jollof rice went up from ₦8,595 to ₦9,311 at the end of Q2 2022, an 8.3% increase. Bauchi had the highest cost at ₦11,600, followed by Wuse II at ₦11,300. The noticeable pattern here is that the Northern states had a higher cost of making a pot of jollof rice despite their farming and livestock rearing occupations. This trend is accounted for by increased insecurity in those states. Traders who purchase from the rural markets are boycotting those areas. Transportation costs have greatly increased, not only because of fuel shortages but also because of the risk involved in travelling those kidnap-infested roads.

Nigerians are employing different coping strategies depending on economic status. Traders are rotating who sells what. Buyers are complementing their cooking with flavours to cover for the absence of protein. More people are using electricity to cook when there is power, to save on cooking gas. Increasingly, people don’t care about a balanced diet. They care more about filling their stomachs. As a result, in different parts of the country, we are beginning to see evidence of malnutrition, especially among children. A teacher in Port Harcourt said that she observed that her students have been coming to school with reduced rations of food and snacks. SBM Intelligence added Port Harcourt to our Jollof Index at the start of 2020. At the time, a single egg cost ₦40 in the city. Two years later at the start of 2022, it cost ₦50. In six months, the price of that egg has gone up to ₦80.

A stitch in time saves nine. In this quarter’s Jollof Index, food prices remained high mainly because of insecurity and fuel scarcity. Things will likely go worse if the government does not immediately step in to remedy these challenges. From the interviews we conducted, it is clear that many Nigerians are devising several coping strategies to deal with the constant increases in food prices. For many, their income levels have remained the same, hence the purchasing power of their income has largely been eroded by the continuous price hikes. The result of this is that more people are slipping below the poverty line. Not only that, many are compromising their health as they choose food quantity and availability over quality and necessary dietary requirements.

The government needs to rise to the occasion now more than ever before. A good place to begin is to decisively tackle the challenge of fuel scarcity and improve the storage of agricultural products in the immediate short term and also for the future to avoid a deeper food crisis.

This food storage is critical now, especially for rice which is one of Nigeria’s major staples. Currently, there is a probability of increased rice prices following the rise in international rice prices. If this happens and both Thailand and Indian rice that Nigeria imports to substitute for domestic consumption is affected, the country will be faced with a deeper food crisis than there currently is. The situation will be even grimmer should these countries adopt protectionist policies to maintain food supply for internal domestic consumption while negotiating the effects of the Russia/ Ukraine war.

It is important that the government tackles insecurity while also boosting domestic food production. The federal government needs to assist states that are rich in producing certain major agricultural products. All concerned actors should ease the supply chain to avoid unnecessary bottlenecks involved in the distribution and supply of some food items. Agencies in charge should also check price control and hoarding to ensure that producers, wholesalers and retailers do not exploit the masses in the name of food shortage.

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