Food inflation is a crucial economic metric representing variations in food prices over time. Measuring food inflation provides insight into a country's financial health and the well-being of its population. Food inflation has serious consequences in Nigeria due to the country's reliance on agriculture and the disparities in economic situations between regions.
The statistics reveal significant changes in Nigeria's food inflation rates. The time-series study for 2023 to 2024 shows a steady rise in food inflation, peaking in the first quarter. This pattern might be ascribed to a variety of variables, including seasonal variations, supply chain interruptions, and macroeconomic situations like currency rates and gasoline prices.
Fig 1: In 2023, the food inflation rate steadily increased, from 24.82% reaching 33.93%, and this hike experienced a surge in the first quarter of 2024. The increase in food prices is attributed to various factors. For one, it was largely affected by the removal of subsidies, which led to higher transportation costs. How much higher can these numbers go? By May 2024, the food inflation rate hit 40.66%, a significant rise from 24.82% accounting for a 48% rate increase over 13 months.
Over the past 13 months, the prices of essential food items have soared, impacting different geopolitical regions. One thing that unites households across Nigeria is the love for rice, stew, beans, and Garri. On average, Nigerians prepare this meal three times a week. Imagine the burden if these staple meals become too costly to afford.
Fig 2: The Northern region is a significant producer of tomatoes, with the North Eastern zone recording a price of 256 Naira per 1kg in 2023. The market conditions in 2023 were slightly favorable across the areas, with the prices of tomatoes ranging between 500-900 Naira per 1kg. Despite this being a manageable price compared to the present day, due to consistent scarcity, crop ruin, transportation limitations, and tomato prices have risen three times more than in previous years. The North East, which had the lowest price, now sells at 854 Naira per 1kg, and the South-South zone has a price of 1689 Naira per kg. This has sparked complaints among consumers wondering how much longer tomatoes become unattainable due to their consistent price increase.
Fig 2.1. Nigeria is one of Africa's leading rice producers but still faces significant inflation in rice prices. Rice is a major source of revenue in Nigeria's agricultural sector. In 2023, rice prices were high in the Southern regions, with South-south listing at 638 Naira per kg due to logistics challenges and higher demand. The Northern region, as the primary producer, had relatively lower prices, ranging between 400 and 540 Naira per kg, with the North West Zone selling at the lowest price of 464 Naira. The first quarter of 2024 saw a surge in rice prices across the regions, estimated to be double the previous price, with the southwest experiencing the highest increase. Import dependency and exchange rate fluctuations could be contributing factors.
Fig 2.2. Beans, the most affordable source of protein, have been steadily increasing in price over the past few months. According to Punch, farmers in the South West are blaming grazing cows for destroying their crops, causing delayed harvests in 2024. In 2023, the Northern regions had the lowest prices for beans, with the highest price at 540 Naira in the Northwest and 496 Naira per kg in the Northeast. The prices in the southern region varied, ranging between 680 and 834 Naira. A general increase in prices was observed in the first quarter of 2024, particularly in the southern region. This could be due to higher demand and increased transportation costs. Currently, the price of beans is between 1500 and 1580 Naira per kg in the southern zones.
Fig 2.3. One of the most affordable food items across the region has seen a notable increment in 2024. In 2023, the price of Garri varied from 300 to 440 Naira per kilogram across the region, with the Southeast and south-south zones recording the highest prices at 439 and 389 Naira, respectively. However, due to the increased inflation rate in 2024, the cost of Garri has surged to between 680 and 1000 Naira. The Northwest now offers the lowest price at 681 Naira, while the south-south commands the highest at 1031 Naira. This price hike has left consumers struggling to afford Garri, once known as one of the most affordable food items in the area.
Fig 2.4. Although palm oil is a relatively expensive food item due to its production cost, it plays a vital role in Nigeria's economy. The country is a leading producer, with the majority coming from the south-south region. Edo state alone contributes 12% to Nigeria's total palm oil production, closely followed by Cross River, Akwa Ibom, Osun, and Ondo states. Despite the significant progress, the price of palm oil in the southern region is considerably higher than in the Northern region. In 2023, the North Central had the lowest price at 863 Naira per liter, while the Southwest had the highest price at 1249 Naira per liter. The first quarter of this year saw a general increase in prices across the regions, with the south-southwest estimating the cost at 2291 Naira and the northeast at the lowest at 1380 Naira per liter.
Fig 2.5. Onions are a key ingredient in Nigerian cuisine, and monitoring their price trends is crucial for analyzing food inflation. In 2023, the Northern region was a major producer with significantly lower prices. The northeast region had prices set at 247 Naira per kg, while the north central region had prices set at 290 Naira per kg. In the Southern region, prices ranged from 549 to 688 Naira per kg, with the south-south zone recording the highest prices. In 2024, there was a significant price increase, particularly in the north-central area where prices are now set at 995 Naira per kg, and in the south-south zone where prices reached 1680 Naira per kg. This sudden increase can be attributed to factors such as rising demand in the north-central region and transportation constraints in the south-south zones.
The analysis helps to visualize regional variations in food costs. Southern regions (SE, SW, SS) often have higher pricing than northern regions (NC, NE, NW). This might be caused by a variety of factors:
Agricultural Productivity: Northern areas tend to have more extensive agricultural activity, which might contribute to cheaper food costs.
Supply Chain Issues: Southern locations may experience greater transportation and logistics expenses, resulting in higher prices.
Price rises: From 2023 to 2024, all areas saw price rises, indicating persistent inflationary pressures and probable supply chain disruptions
Policy implications
Targeted policy measures are needed to address the observed trends and regional differences in food inflation.
Agricultural Support: Increasing agricultural production in southern regions by subsidies and technological support can help to alleviate high food costs.
Infrastructure Development: Improving transportation infrastructure helps lower logistical costs and keep food prices consistent across areas.
Market Regulation: Putting in place mechanisms to prevent price gouging and promote market efficiency can assist in moderating inflationary pressures.
The analysis of food inflation across Nigerian states from 2023 to 2024 highlights the significance of ongoing monitoring and focused policy measures. Understanding regional trends and the causes that drive food inflation can aid in developing effective measures for ensuring food security and economic stability in the country.
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