The average cost of making a pot of jollof rice in Nigeria rose by 7.8% between March 2020 and March 2021. This is contained in the SBM Jollof index report for Q1 2021, published by SB Morgen.

According to the report, the increase was caused by the prolonged border closure, increased energy tariffs, exchange rate volatility, coronavirus pandemic, and the restrictions of forex for the importation of items, largely due to falling oil prices.

It also identified the effect of the #EndSARS protest against brutality and the response of the government, which brought the main economic states in Nigeria (Lagos and Abuja) to a standstill for major parts of the month of October 2020.

Highlights

• Specifically, the average cost of making a pot of jollof rice in Nigeria increased from N7,167 recorded in Q4 2020 to N7400 in the first quarter of 2021. representing a 3.24% quarter-on-quarter increase.
• The cost of making a pot of rice is most costly in Wuse and least costly at Awka. The report, however, suggests that the disparity could be a result of operational costs rather than the actual cost of commodities.
• While it is possible for people in Awka to substitute buying some of the commodities with products from their subsistence agriculture, the same is not possible in Wuse, largely because of its very urban nature.
• The high exchange rate of N410/$1 to N475/$1 in the parallel market also adversely affected the price of jollof rice in the country as tomato puree, rice, turkey, and seasoning are affected by the exchange rates.
• Also, flooding destroyed several hectares of rice farms across the country. The report stated that up to 500,000 hectares of rice farms were destroyed in Kebbi State alone.
• The price of turkey has increased as a result of increased electricity tariffs which has forced increases in cold room costs.

According to the SBM Jollof report, “Our interviews with traders shows that transportation costs have not reduced since they were increased during the introduction of the COVID-19 protocols. One of the traders stated that she pays almost twice her former transportation cost prior to COVID-19, and the prices have not gone down even after drivers began to carry more passengers than permitted by the social distancing protocol.”

Jollof costliest to cook in Wuse, Abuja

In Abuja, food production is mainly undertaken by its neighbouring states Benue, Kaduna, Kogi and Niger, all of which have seen several attacks in the past few years, showing a decline in that dimension.

• The report revealed that the cost of making a pot of jollof rice is highest in Wuse, Abuja.
• Although food distribution has not been affected and unemployment rates are over 40%, but being the administrative headquarters of the government and most international NGOs, outreaches and food distribution are common.

“In all the states surveyed, out of a score of 50, the combined score ranged from 18-27 which shows a general decline in entitlements across the states and similar levels of severity. While Bauchi has a higher chance at getting food insecure, the other states are slightly above the borderline, showing medium decline in their entitlement (ability to get food).”

What you should know

According to the report, in all the markets surveyed, the cost of making a pot of jollof rice increased in Awka, Calabar Municipal Market, Mbakpa, Onitsha, Port Harcourt and Trade Fair, while Balogun, Bauchi, Bodija, Dugbe, Kano, Nyanya and Wuse experienced a slight decrease.

• The South-South and South-East states experienced an increase in the cost of making Jollof rice, Northern states experienced a price reduction.
• The price decrease was attributed to the harvest period which usually forces prices of some commodities like onions and tomatoes down.
• It however suggested that this decrease may have failed to happen in the Southern part of the country because of the cost of transporting the goods down south and because of the price surge introduced by the food blockade.

Mobile transactions in Nigeria (mobile & USSD) surged by 82.6% in 2020 to stand at 1.69 billion compared to 928.86 million recorded in the previous year. This is according to the 2020 instant payment annual statistics, recently released by the Nigerian Inter-Bank Settlement System (NIBSS).

The report also revealed that 78% of total instant payments carried out in Nigeria in 2020 were done through the use of mobile devices.

The breakdown of the data showed that while mobile payment retained its position as the most preferred channel, accounting for 43% of the total transactions in 2020, USSD followed closely at 762.19 million transactions, accounting for 35% of the total recorded in the year.

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The agency attributed the growth to the move by Nigerians away from physical channels, and the closure of most bank branches in the country during the heat of the covid-19 pandemic.

In terms of Year-on-Year performance, the volume of mobile transactions in the country grew from 506.16 million in 2019 to 933.66 million in 2020, indicating a surge of about 84.5% YoY. Also, the volume of USSD transactions grew from 422.7 million to 762.19 million, advancing by about 80.3% YoY.

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Key highlights

• The report stated that with approximately 49.5% smartphone ownership in the country and 97 million mobile internet users, there are strong indications that mobile and USSD payments will see significant growth in the short-medium term.
• Customers between the ages of 25 – 34 years carried out 36% of all interbank instant payments in 2020. This indicates that the younger demographics boosted the adoption of instant payment in the review period.
• Also, 79% of instant payment transactions in the review year were initiated by customers between the age of 15 – 44 years.
• A cursory look at the report also shows that Lagos state maintained the hub for electronic payments, accounting for 30% of the total transactions initiated in the country. Others on the list of highest transaction volumes include; Abuja (7%), Ogun (6%), Rivers (6%), and Oyo state (5%).
• According to the report, 1.37 billion transactions initiated in the year were carried by males, representing 72% of the total, while 520.04 million or 28% were females.

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Nairametrics had reported that twelve Nigerian banks listed on the NSE, raked a sum of N216.52 billion from their e-business earnings in 2020. A list that is clearly topped by the tier-1 banks in the country. This shows how banks are leveraging the growing internet adoption in the country.

A look at bank financials

• Union Bank in its FY 2020 Investors’ presentation stated that the pandemic played a vital role in its 38% YoY growth in Union Mobile active users. It stated that 94% of its transactions are now done online.
• In the same vein, Access Bank remarked that its USSD users at the end of FY 2020 increased to 7.8 million, while the mobile app and internet banking users were 9.8 million at the end of 2020.
• GT Bank on the other hand noted that its USSD users grew by 13.1% YoY, from 6.1 million as of December 2019 to 6.9 million in 2020. Of this figure, 5.7 million users were categorized into the active segment.

Bottom line

As witnessed from the increase in the volume of transactions, the covid-19 pandemic has changed the electronic payment landscape in Nigeria and the world as people try to cut the excesses of physically visiting banks to carry out their financial transactions. This was due to the lockdown implemented by the federal government in response to the covid-19 spread.