COVID-19: Nigerians suffer food price surges amidst dwindling income

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Amid rising poverty, Nigeria’s food inflation has reached new levels and is telling on Nigerians daily.

Opeyemi Adeyemi works with one of the big finance companies in Nigeria. He had a pay cut due to the lockdown during the coronavirus pandemic. “To keep your job during this period, a pay cut is a relief, as thousands were fired,” Mr Adeyemi, a 42-year-old finance expert who lives at Obalende, on Lagos Island, said.

“I was overwhelmed with the prices of foodstuffs. I often discussed with my wife, who was nursing our second child, ensuring we find a substitute for afternoon meals by taking garri or noodles instead of a three-square meal in a day.”

“The cost was high on me and my household. My salary was slashed by 30 per cent to sustain my job, then, rising inflation took a toll on me. I lost most of my savings to cater for the family.

“The cost of electricity also skyrocketed during this period and I had to work from home. Despite paying a higher electricity bill, most times I still have to get fuel to power my generator, due to the erratic power supply in my area during this period,” a visibly angry Mr Adeyemi let out his frustrations.”

Mr Adeyemi’s story is that of millions of Nigerians who lost considerable regular income due to the loss of a job or drastic cuts in salaries and wages, especially during the COVID-19 lockdown period.

The ordeal of his lower income chasing higher food costs corresponds too with many people’s responses during Dataphyte’s market survey.

The research team had set out to investigate how the coronavirus pandemic impacted food prices in Nigeria, the country reputed to be Africa’s biggest economy.

Nigeria recorded its first index case of the virus on the 27th of February, 2020, in Lagos. Afterward, the virus spread across the country and led to many deaths. In all, Nigeria has recorded 166,560 cases of infections losing 2,099 of them to death as at 2nd June, 2021.

To curtail the spread of the virus, measures recommended by the World Health Organisation (WHO), were adopted. However, the continuous spread led to an ultimate shutdown of the global economy in April 2020.

The lockdown affected all economic activities in Nigeria, and indeed globally, as many countries devised measures to cope with the debilitating effects of the infections. The effect of the lockdown was felt heavily across key economic sectors in Nigeria as only essential service providers were exempted from the movement restrictions.

The full outbreak of the coronavirus in 2020 changed the normal working of the Nigerian economy. It affected many lives and livelihoods, with many families and individuals struggling to adjust and cope with its strange effects.

One of the major activities affected in Nigeria was agriculture, because the lockdown was put in place during the planting season. Though it was relaxed a little to enable farmers to cultivate their crops, they were faced with difficulties in accessing farm inputs and transporting the same across the markets.

Official data of Nigeria’s gross domestic product between first quarter of 2020 and March 2021 when Dataphyte conducted a market survey showed that the impact of the contagion was more severe on Nigeria’s industrial sector than the others. The sector had the steepest decline in output and the slowest recovery from the dip in its output.

The next hit sector was the services sector. However, the agricultural sector alone remained resilient, recording consistent growth in the money value of its output throughout the turbulent period, or so it appears.

While the money value of the output (Gross Domestic Product (GDP)) from the major sectors of Nigeria’s economy declined at various periods during the pandemic, only the agricultural sector experienced growth throughout the subsequent quarters of 2020 till the first quarter of 2021.

Source: National Bureau of Statistics (NBS)

Analysts at Dataphyte attribute the resilience of the agric sector alone during the pandemic, unlike the other sectors, to either of two things. The first is that the level of agric production increased even during a time of turbulence in public health as the COVID-19 presented, so that more agric products were sold, yielding greater income to those in the agric value chain.

The other possibility, they posit, is that there was no increase in agric production, and possibly, even a lesser agric production, which created scarcity. The higher income from the agric sector activities then could be attributed to the sales of farm produce at exorbitant prices. The responses of food buyers and sellers interviewed during the Dataphyte survey validated the second proposition.

The COVID-19 lockdown restricted the movement and transportation of goods, especially food items, across the country. A ban on inter-state movement and farmers’ inability to cultivate their farmland, amongst other processes, posed a challenge on food security in the country.

These unusual distortions of farming activities and agricultural business shrank supply of various farm produce, with attendant increase in prices of food items.

According to the recently conducted Dataphyte Food Price Survey, Nigerians witnessed an average of 66.8 per cent increase in the prices of food items between last year February, the month the first case of Coronavirus was confirmed, and this March, when the survey was conducted.

Source: Dataphyte Market Survey

Dataphyte’s analysis of the prices of foodstuffs across 13 states in the country – one of the most extensive market surveys in the country – showed that the food price situation had contracted the purchasing power of citizens. The states sampled are Anambra, Benue, Enugu, Ebonyi, FCT, Kano, Kwara, Lagos, Niger, Ogun, Ondo, Oyo, and Sokoto states.

 

The price of Beans and Garri nearly doubled within the period under review. Beans rose from N1,457 to N2,883 per paint rubber, representing a 98 percent (97.92%) increase. The cost of Garri rose from N869 to N1,856 per paint rubber, a 97 percent (97.27%) change. The price increases of these two staple foods were the highest in the last one year period of the coronavirus pandemic.

Garri is made from cassava, a tuber plant, which is one of the most important food crops in West Africa. Nigeria produces about 250,000 tonnes of it annually. Nigeria is also regarded as the largest producer of cassava in the world. Garri is either made into ‘Eba’ or soaked to drink as flakes. It is often regarded as the ‘poor man’s food’, because of its relatively low price and the ease of taking it as a snack without need of cooking, unlike most of the other food items.

How much of the increase in food prices can be attributed to COVID-19?

Further analysis of the responses of food buyers like Opeyemi Adeyemi implied that coronavirus-related activities accounted for about 69 per cent of the increase in food prices in Nigeria within the period covered by the survey.

Source: Dataphyte Survey

Like other nations across the globe, Nigeria adopted the ultimate measure to prevent the spread of the virus. By the end of March 2020, the government shut down its entire economy. This halted all production activities, movements and major economic activities.

The shutdown affected farming activities, manufacturing, and all productive activities. Border closure further complicated issues as no supplements were coming into the country, creating a high demand for the few available items.

Dataphyte’s food price survey asked respondents in the 13 states what other factors they thought really contributed to the price increase. The goal was to understand what other socioeconomic factors Nigerians believed were causing food price hike during the period.

Source: Dataphyte Survey

Based on the responses from 2,351 respondents who were surveyed, analysis showed that 1,610 respondents (69%) strongly believed that the scarcity of food items and high demand for the available food products during the lockdown period led to the price surge.

However, sustained violence and a general state of insecurity in the country, especially in the northeast of the country, could have contributed to the scarcity of the farm products and processed food items.

Other factors responsible for the food price surges include border closure, contributing 4%. General Insecurity, terrorism, killings, kidnapping, farmers-herder clashes also directly contributed about 3% of the cause, according to the people interviewed.

Morufat Oluyemi, a hairdresser in Arepo, Ogun State, southwestern Nigeria, said she now engages in two jobs every day to be able to raise extra cash to cater for her four children after the demise of her husband.

“I have to shuffle between two jobs now. I own a hairdressing shop but the income can no longer sustain my family. I have to go for extra cleaning work as a cleaner to take care of the family.



Source: Premium Times

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