Nigeria’s double digit inflation is still in the emerging market economy planner’s comfort zone. At 17.9 per cent, inflation rate is high but it is light years away from Venezuela’s six digit inflation in 2019.
Nigeria has never reached even three digit inflation. The highest it went was in 1995 when inflation hit the 72 per cent mark. Even at that point, the level of poverty was not as high as it is today.
The World Bank probably was not worried about Nigeria’s inflation rate at 72 per cent in 1995 as it is troubled by the current inflation rate of 17.9 per cent. The income distribution system in 1995 was more egalitarian than today. Consequently, the high inflation rate could not push many down the poverty line.
Ironically, the current L17.9 per cent inflation rate has taken more people below poverty line than the 72 per cent rate did in 1995. The World Bank is so troubled by the seemingly modest inflation rate that it raised an alarm in its Nigeria development update (NDU).
The bank warned that surging inflation pushed an estimated 7 million more Nigerians below poverty line in 2020 alone. The bank fingered escalating food prices as the engine room of Nigeria’s surging inflation. It lamented that food inflation accounts for 60 per cent of the developments in headline inflation.
When the bank released its NDU, food inflation stood menacingly at 23 per cent and there were fears that with the new harvest about two months away, it might hit the 25 per cent target. With food inflation at 23 per cent, millions of Nigerians are already starving on the throes of malnutrition.
The World Bank report, which established a direct link between inflation and poverty, is a sad reminder of the grim message from the United Nations Food and Agriculture Organisation, (FAO).
The FAO report submitted when the 2020 harvest was still on, lamented that 9.8 million Nigerians were starving on the throes of malnutrition in 16 northern states and the Federal Capital Territory (FCT).
The warning from that report is that Nigeria may be sailing perilously close to a replay of the civil war scenario when thousands of Nigerians died from the malnutrition disease known as Kwashiorkor.
There are fears that the number of people starving as a result of what the World Bank now attributes to inflation-induced poverty, might have doubled with the depletion of the nation’s food stock several months after the 2020 harvest.
The World Bank’s alarm on inflation-induced poverty came at a time when the federal government rolled out the drums on June 12 to celebrate the lifting of an imaginary 10.5 million people out of poverty.
Between the World Bank and the federal government everyone knows who to believe. Before the grim message on inflation in its NDU, the World Bank had earlier warned that Nigeria would push 15-20 million people below poverty line by 2022.
The only difference this time is that it pinned poverty down to surging inflation. Nigeria’s food inflation, which the World Bank blames for the mass starvation in the land is rooted on the country’s internecine security crisis.
The menacing food inflation is the collateral damage of 11 years insurgency in the north-east by Islamic lunatics. Last November, the lunatics marched into an expansive rice farm and slashed the throats of 70 farmers. The military could not deter them.
The farmers consequently abandoned their farms as no one could guarantee their safety. Borno state, the epicenter of the senseless bloodletting is larger than the land mass of the five states in Nigeria’s south-east geo-political zone.
The insecurity in the area has robbed the country of proceeds from its north-eastern food basket.
Besides, Fulani herdsmen have caused even more encompassing food security damages in the remainng 35 states.
They hypocritically march their cattle into the farms to feed on the crops.
Last week, Ogoni peasant farmers in Rivers state cried helplessly as Fulani herdsmen laid siege to cultivated fields and fed their cattle with the crops.
The menace of Fulani herdsmen has resulted in a nationwide outcry with no one actually listening.
A Nigerian conglomerate lost 2,000 hectares of cassava plantation in Ekiti state to Fulani cattle. The N250 million cassava plantation was to feed the company’s ethanol plant.
Even the peasant farmers benefitting from the CBN Anchor Borrowers Programme are not spared the herdsmen’s tyranny. Many complained that Fulani cattle destroyed the maize in their farms.
In some communities in Niger state, bandits have added to the tyranny of Fulani herdsmen by imposing levies on farmers as a condition for granting them access to their farms. Those who cannot raise the N20, 000 levy imposed on each household in the communities cannot enter their farms.
The consequence of all the imposition by obdurate security crisis is that food production is severely constrained. Consequently, the quantity of food items entering the market is drastically reduced. The cost of producing the little that enters the market is doubled by the levies of the bandits and the high cost of labour engendered by heightened security risk.
The risk of entering local farms has worsened Nigeria’s dependence on imported food. The country’s food import bill rose from N267.1 billion in the first quarter of 2020 to N630.1 billion in 2021.
Besides insecurity, the virtual tripling of the food import bill is largely attributed to the massive depreciation of the naira. The high import bill explains the escalating rate of food inflation in the land.
The federal government has worsened a bad situation by banning maize imports when local production has plummeted precipitously. That development has pushed the price of eggs from N800 to N1,500 per crate. Even the price of chicken has doubled. Poultry farmers simply passed the extra cost of maize, a major raw material for chicken feeds, to consumers.
The federal government itself is losing. Maize is being smuggled in to breach the yawning gap created by the ban. No one pays the import tariff for the millions of tons of maize smuggled in to feed the distressed poultry industry.
With the security crisis worsening, the naira tumbling in the foreign exchange market and Nigeria depending heavily on food imports, food prices would simply escalate and push millions more into mass starvation. Ethiopia’s humanitarian crisis triggered by the war in its Tigray region which starves some 400,000 people might soon pale into insignificance as food inflation puts millions of Nigerians on the throes of malnutrition.
