Nigeria’s food inflation has risen by 110.5% in 5 years, between September 2015 and September 2020.

A comparison of the Composite Food Index within the period under review indicated that food inflation rose from 181.8 index points to 382.7 index points.

This means that the price of food items has not only increased, but more than doubled in the last five years of President Muhammadu Buhari’s administration.

READ: UPDATED: Inflation rate jumps to 12.40%, highest in over 2 years

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Similarly, the All Items Index rose by 92.4% during the same period.

Food items that have witnessed significant increases

Data obtained from Nairalytics, the research arm of Nairametrics, revealed that:

• Foreign rice (Caprice) which sold for an average of N14,500 as of May 2019 is now sold for an average of N30,000.
• A 50kg bag of Ijebu garri that sold for N7,200 in May 2019, now costs N13,700.
• A 25-litre keg of vegetable oil sold for N9,750 in May 2019, now sells for N14,625.
• A piece of frozen fish which cost N417 in May 2019, now sells for N625.

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Why are the figures going up?

The hike in the cost of staple food items could be attributed to the border closure directive of the federal government that was announced in August 2019.

It is projected to hit 20% by the first quarter of 2021, when the effects of the increase in petrol and electricity prices are accounted for.

Also, yield per hectare for most farming is well below global standards, driving up the cost of whatever is left to be sold to Nigerians.

Farmers also face insecurity, flooding, and sometimes famine affecting their ability to plant and harvest. Even after harvesting, supply chain challenges still persist, leaving farmers to contend with middlemen, transportation, and storage. The result is far less farm produce reaching the final consumer.

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What they are saying

Prof. Steve Hanke, an American Applied Economist at the Johns Hopkins University in Baltimore, Maryland, USA, expressed his dissatisfaction over the performance of Buhari’s administration.

According to him, the Federal Government could do more than what it is doing; he described the administration as a failure over security of its citizens, unemployment, and inflation.

He tweeted, “President Muhammadu Buhari has failed. Nigeria is in the grip of chaos. Bandits control major highways.

“The government can’t protect its own citizens from Boko Haram or the corrupt Police. Unemployment stands at 27.1%, and Inflation, which I accurately measure every day and that soars at 30.37%/yr.”

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.@MBuhari has failed. #Nigeria is in the grip of chaos. Bandits control major highways. The government can’t protect its own citizens from #BokoHaram or the #Corrupt police. #Unemployment stands at 27.1%, and #Inflation – which I accurately measure every day – soars at 30.37%/yr. pic.twitter.com/LZOzHWkiau

— Prof. Steve Hanke (@steve_hanke) October 28, 2020

READ: Northern States worst hit as Nigeria’s inflation jumps to 11.85% in November 

What you should know

• On October 15, 2020, Nairametrics reported that Nigeria’s inflation rate rose to 13.71% (year-on-year) in September 2020, indicating 0.49% point higher than 13.22% recorded in August 2020. This was contained in the Consumer Price Index (CPI) report, released by the National Bureau of Statistics (NBS) about two weeks ago.
• According to the report, Nigeria has endured persistent increase in inflationary rate —growing from 12.13% in January to 13.71% in September—the highest recorded in 30 months.
• A closely watched component of the food inflation index rose by 16.66% in September 2020 — a 0.66% increase compared to 16% recorded in the previous month.
• On a month-on-month basis, the food sub-index rose by 1.88% compared to 1.67% recorded in August 2020.
• Meanwhile, the rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits, and oils and fats.

READ: Nigeria’s inflation rate rose to 11.40% in May 2019

The consumers’ overall confidence index dipped to -21.2 points as at the third quarters of 2020(Q3,2020), down by 25.0%, from 3.8 points it recorded in the corresponding period last year. This is according to the latest Consumer Expectations Survey Report for Q3, 2020

What this means: The slip in outlook indicates that consumers were pessimistic in their outlook for Q3 2020. Respondents attributed this unfavourable outlook to declining economic conditions, family financial situation and declining family income.

The consumers were however optimistic in their outlook for the next quarter and next 12 months with indices of 10.1 and 30.5 points, respectively. This positive outlook could be attributed to the expected increase in net household income, an anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/or have plenty over savings in the next quarter and the next 12 months

Why this matter: The pandemic negatively impacted consumers’ income and businesses. Hence, the CBN wanted to gauge the impact of this pandemic on their confidence and outlook, both in the past and going forward, through their quarterly survey.

Other Key Highlights:

• The unemployment index for the next 12 months remained positive at 35.4 points in Q3 2020, indicating that consumers generally expect the unemployment rate to rise in the next one year.
• With indices of 20.8 and 5.3 points, consumers expect the borrowing rate to rise and anticipate the naira to appreciate in the next 12 months.
• Overall buying intention index in the next twelve months stood at 29.7 index points, indicating that most consumers do not intend to buy big-ticket items in the next 12 months. The buying intention indices for consumer durables, motor vehicles and house & lot were below 50 points, which shows that respondents have no plans to make these purchases in the next twelve months.

What you should know

The Overall consumer confidence index is computed as the average of the three indices, namely: Economic Condition, Family Financial Situation and Family Income.

a. Economic Condition refers to the perception of the respondent regarding the general economic condition of the country.
b. Family Financial Situation refers to the level of savings, investments, other assets including cash at hand and outstanding debts.
c. Family Income includes primary income and receipts from other sources received by all family members as participants in any economic activity or as recipients of transfers, pensions, grants, and the like

Data from the National Bureau of Statistics (NBS) reveals the average fare paid by commuters for a journey by motorcycle per drop more than doubled year on year (September 2020 vs 2019 respectively).

This was contained in the recently released data on Transport fare for September 2020 in Nigeria. This covers bus journey within the city per drop, bus journey intercity, state route, charge per person, airfare charge for specified routes single journey, journey by motorcycle (Okada) per drop, and waterway passenger transport.

READ: Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN 

Motorcycle Fares

• According to the report, the average fare paid by commuters for the journey by motorcycle per drop increased by 10.47% MOM and by 111.11% YOY to N255.51 in September 2020 from N231.29 in August 2020.
• The states with the highest journey fare by motorcycle per drop were Niger (N1,467.49), Kogi (N362.47), and Rivers (N345.80); while states with the lowest journey fare by motorcycle per drop were Adamawa (N76.55), Katsina (N100.84), and Kebbi (N125.60).
• Similarly, the average fare paid by commuters for bus journeys within the city increased by 7.92% MOM and by 63.88% YOY to N309.73 in September 2020 from N286.99 in August 2020.

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Bus Fares

The states with the highest bus journey fare within the city were Zamfara (N579.84), Bauchi (N492.14), and Cross River (N416.32); while states with the lowest bus journey fare within the city were Abia (N188.50), Kebbi (N192.48), and Borno (N200.80).

• The average fare paid by commuters for bus journey intercity increased by 0.36% MOM and by 24.30% YOY to N2,022.70 in September 2020 from N2,015.50 in August 2020.
• The states with the highest bus journey fare intercity were Abuja FCT (N4,315.22), Lagos (N3,073.25), and Sokoto (N3,000.00); while states with the lowest bus journey fare within the city were Kwara (N223.45), Benue (N274.64), and Ondo (N291.07).

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Air Travel

Average fare paid by air passengers for specified routes single journey decreased by -4.59% MOM and increased by 20.60% YOY to N36,884.59 in September 2020 from N38,659.86 in August 2020.

• The states with the highest airfare were Lagos (N39,750.00), Rivers (N39,520.00), and Anambra (N38,950.00); while states with the lowest airfare were Akwa Ibom (N32,500.00), Sokoto (N33,700.00), and Benue (N35,000.00).
• The average fare paid by passengers for waterway passenger transport increased by 7.06% MOM and by 34.13% YOY to N734.26 in September 2020 from N685.82 in August 2020.
• The states with the highest fare by waterway passenger transport were Bayelsa (N2,250.23), Rivers (N2,200.64), and Delta (N2,150.30); while states with the lowest fare by waterway passenger transport were Borno (N200.48), Gombe (N264.29), and Abuja FCT (N294.10).

READ: Nigeria’s inflation rate hits 13.71% as food prices soar

What this means: According to the NBS, transportation makes up 6.4% of consumption expenditure of millions of naira next only to food at over 50%. Transport is also a key input cost for determining food prices and conducting business in the country contributing to the inflation rate. A combination of bad roads. poor infrastructure, exchange rate devaluation, removal of fuel subsidies, and a general rise in prices of goods and services have impacted transportation costs across the country.