The SBM Jollof Index: Brace for impact

Nigeria is currently grappling with rising food prices as food inflation hits 23.34% in September 2022 amid the effects of the Ukraine-Russia war, hangovers from the coronavirus pandemic, constraints imposed by insecurity, poor macroeconomic policies and more recently, floods which have affected many food-producing states.

An FAO-WFP report on hunger hot spots and early warnings of acute food insecurity from October 2022 to January 2023 has placed Nigeria, alongside five others, on the highest alert level of countries already facing critical food insecurity.

This speaks to why the government must reconsider its import substitution stance and decide to make forex available for the importation of grains and encourage importers to do so.

In this quarter’s Jollof Index, the national average shows a steep climb in July, a slight plateau in August and another climb in September due to unresolved pre-existing drivers of food inflation such as insecurity, intermittent energy shortages and increased fuel prices.

The average cost of making a pot of jollof rice for a family of five increased from an average price of ₦9,220 in June to ₦9,917 in September, a 7.6% increase. Across the 13 markets surveyed, Wuse II recorded the highest cost of making a pot of jollof rice at ₦13,150, while Onitsha had the cheapest price at ₦8,510.

The price of rice, a significant ingredient in the Jollof Index, has been rising due to a weakened naira and scarce forex, which affect imports. And as floods destroy extensive rice farmlands, the prices will further increase. Prices of protein items such as turkey and beef also increased in most markets due to the increased cost of chicken feed and higher energy costs. The price of eggs – an important substitute to costlier protein sources has also significantly increased.

Northern markets (Wuse II, Nyanya, Kano and Bauchi) had higher costs of making a pot of jollof rice than markets in other regions due to insecurity and fuel scarcity attributed to the lack of access roads due to the flooding in Lokoja, Kogi State but the South-East witnessed slight price reductions in this quarter’s Jollof Index due to the recent relative stability seen in the region.

As government-imposed import restrictions, exchange rate depreciation and scarce forex worsen food availability and costs, Nigerians are running out of ideas to cope with the situation, and many are seeing similarities between this period and the period between 1984 and 1996 when Nigeria had the worst inflation rates.

As Nigerians face the challenges of production capacity, supply chain disruptions and dwindling income levels, the government needs to create buffers, suspend bans on essential food items and make it easier for Nigerians to access food items.

Download complete report (27 pages)