The Food Inflation Scourge
There was a time when Nigerians would go to the market with money in their pockets and come back with wares in a basket. Those times are gone and may be gone for a pretty long time. Nigerians now go to the market with money in a basket and come home with wares in their pockets. Inflation, man’s invisible enemy, is at work and is determined to make life miserable for millions in Africa’s largest economy. Inflation steals the money in your pocket even as the bank notes remain with you. It eats into the purchasing power of the money in your pocket and reduces its usefulness drastically.
By the last count in January 2021, inflation had reduced the purchasing power of the money in everyone’s pocket in Nigeria by 16.4 percent. If you are shopping for food items, inflation has reduced the purchasing power of the money in your pocket by 20.4 percent.
That explains why a bag of beans that sold for N18, 000 during the lockdown in the middle of 2020, now sells for N38, 000. During the 1960s and early 70s, Nigeria was the largest producer of palm oil in the world. Nigeria lost that grandeurs position to Indonesia in the 1970s when it became a major exporter of crude oil and abandoned agriculture to peasant farmers. Indonesia now churns out 34.5 million tons of palm oil annually, while Nigeria chips in a paltry 1.2 million tons as a distant number six in the list of global palm oil producers.
Nigeria now imports both crude and processed palm oil from Indonesia and Malaysia. The import is done with a currency whose exchange rate is persistently in a disorderly retreat in the foreign exchange market. Because of the persistent depreciation of the naira, five liters of imported vegetable oil that carried the price tag of N3. 200 in November 2020, now sells for N5, 000.
Three major factors are responsible for the surging food inflation in Nigeria. The first factor is the country’s worsening insecurity. Peasant farmers produce 80 per cent of the food items consumed in Nigeria. They clear the land with cutlasses and till the soil with hoes. What tractors and combined harvesters do in three hours in Europe and North America, 60 million Nigerian peasant farmers do in three months and eke out poor harvest from a grumbling soil.
Now the Islamic lunatics have rendered the farms very unsafe for the peasant farmers in the north-east. Few would dare the lunatics by going to farm after the throats of 70 of their colleagues were slashed in November 2020. No one in the federal government can guarantee the safety of farmers in the north-east. The farms have been consequently abandoned.
In the south where the Islamic Jihadists are yet to extend their unholy war, Fulani herdsmen have done more devastating things to peasant farmers. The murderous herdsmen are everywhere in Southern Nigeria. In Akwa Ibom state where the ill-timed and corruption-riddled maize intervention programme of the Central Bank of Nigeria (CBN) reached the beneficiaries some three months after the planting season, the daring peasant farmers who took the risk of accepting the Greek gift, watched helplessly as Fulani herdsmen marched their cattle into the farms and fed them with the crops cultivated with CBN loans and maize seedlings. Now the apex bank loans collectors are asking for their money but the farmers have nothing to present. In Ibiono Ibom Local Government Council of the state, Fulani cows are not only eating the leaves of the cassava planted by peasant farmers, they pull the stem, uproot the cassava and eat the tubers.
No one can complain about the menace of the Fulani herdsmen. The graveyard silence of the men in Aso Rock gives them the tacit backing of the federal might. Not even the state governors can challenge the murderous herdsmen because no one can match their arsenal of AK-47 assault rifles and bullet-proof charms. Food inflation is just beginning to climb. With the proceeds of the 2020 harvest thinning out in store houses, a medium size tuber of yam would sell for N2, 000 in March.
The second reason for the surging inflationary trend is the persistent depreciation of the naira. Because the rulers of Nigeria had, over the last 30 years, refused to diversify the economy, the unholy dependence on crude oil exports for 90 per cent of Nigeria’s foreign exchange earnings and 70 per cent of revenue has exposed the economy to devastating shocks from the international oil market. The exchange rate of the naira tumbles precipitously when oil price slumps.
The second evil of the failure to diversify the economy is that Nigeria imports even the refined petroleum products it consumes. With oil price at $63 per barrel, the average global pump price of petrol has risen to the naira equivalent of N408 per liter. Nigeria does not tax petrol because the rulers cannot explain what they do with such tax. That makes the pump price of petrol in Nigeria the 10th lowest in the world. However, the federal government spends billions of dollars annually importing refined petroleum products that could be refined in Nigeria and sold at lower pump price while the government saves its scarce forex.
Most of the surging inflation is imported inflation as the exchange rate of the naira plummets precipitously due to inept and corrupt management by the CBN. The third factor behind the surging food inflation is Nigeria’s primitive method of farming. The menace of the Fulani herdsmen who now feed their cattle with crops planted by peasant farmers while complaining farmers are slaughtered, points to the fact that Nigeria is light years behind the world in agriculture development.
Northern Nigeria is blessed with immeasurable farmland that could be used to develop ranches for the herdsmen to feed their cattle, slaughter, process and convey them in refrigerated trucks to the markets in the south. No one in the federal government thinks in that direction. The Fulani are nomads and they are allowed to raise their cattle in their primitive tradition of marching them down to the market for hundreds of kilometers and destroying crops as they move.
The consequence of that defiant cling to the primitive method of cattle rearing is why Nigeria imports 70 percent of the milk it consumes. In the developed world where cattle are reared in developed ranches and treated by trained veterinary doctors, the daily milk output per cow is in the range of 30 liters. Nigeria manages to squeeze out a scant six liters of milk per cow per day because the cows are malnourished and ill-treated.
The same reason is why Nigeria lost its leading position in palm oil production to Indonesia. About 60 million peasant farmers toil to produce palm oil from millions of wild groves that no one ever planted nor tended.
The wild groves survive at the mercy of providence. Consequently, they grudgingly produce fruits that are very low in oil content. The poor production and low oil content of fruits from the wild groves is worsened by primitive processing devices that manage to extract a scant 50 per cent of the oil in the fruits. The result is that Nigeria imports 700, 000 tons of palm oil annually, when it is blessed with arable land for palm oil plantations that could rival Indonesia in palm oil production.
Nigeria’s food inflation is bound to worsen because, like the subsistence farmers, the federal government is always moving in the wrong direction when it comes to agricultural development. Olusegun Obasanjo’s Operation Feed the Nation in 1977 presented farming as an all-comers affair, when actually it is the exclusive preserve of those trained on it. Operation Feed the Nation was a colossal failure because no one gave a serious thought to mechanised farming.
Shehu Shagari’s Green Revolution followed a similar path and failed catastrophically. The CBN intervention in rice and maize production is equally skewed in favour of peasant farmers. Corruption and Fulani herdsmen have already crippled the programme. The rulers of Nigeria must go back to the drawing board and think of ways to boost mechanised farming while at the same time arresting the insecurity in the land. That is the only way to stem the surging food inflation.