Nigeria runs the risk of falling into a food crisis if the restrictions to import food are not relaxed.
27 states in Nigeria have been hit by flooding caused by heavy rains and the release of water from the Lagdo Dam in neighbouring Cameroon, which has left 500 killed, thousands injured, millions homeless and disrupted fuel supplies.
The National Emergency Management Agency (NEMA) and the Humanitarian Affairs ministry, in a statement on Friday, warned that floods have hit 27 of Nigeria’s 36 states and impacted around 1.4 million people, as NEMA chief, Mustapha Habib Ahmed said, “The scale of the disaster is colossal”.
Considering the fact that most of the states affected constitute Nigeria’s highest food-producing states, with multiple farms destroyed due to flooding, food prices would be impacted soon, as the already reduced supply due to insecurity, is expected to put a strain on food prices.
Nigerians have already started noticing sharp price increases due to food shortages caused by flooding:
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This is made worse by the fact that Nigerian Customs warned last week that the federal government’s directive on border closure is still in force.
Customs Area Controller, Niger/Kogi Command, Busayo Kadejo, noted that his command recorded the seizure of bags of fertilizer and rice.
Nigeria’s rice production
Despite the reopening of the borders officially during Covid-19, (which President Buhari stated was initially closed to fight insecurity, but enforced strict restrictions on food trade to stimulate import substitution-based growth in agriculture), Nigeria’s rice production numbers still can’t meet local demand.
Nairametrics reported that the minister of water resources, Mr. Suleiman Adamu, had said Nigeria will need the sum of $14 billion for dredging to control recurrent flooding of Rivers Niger and Benue. This, he said, would help tackle disasters and humanitarian crises, caused by flooding in the 27 states, especially the food production hubs of Nasarawa, Benue, Kogi, and Anambra.
According to a report by SBM Intelligence in 2021, Nigeria’s domestic rice consumption in 2021 was 12,000MT, while local production stood at 5000MT, meaning Nigerians are consuming more than twice the amount of rice we produce.
Nigeria’s rice production is also severely limited by other factors, including herder attacks on farmers, which means previously cultivated land is not available, to meet local demand. The federal government, since 2015, placed a 70% tax on rice imported from elsewhere and also denied importers access to FX for rice imports. These measures were made worse by the border closure policy, which heavily impacted food prices also.
How bad is it?
One of Nigeria’s largest corporate agro firms in the rice production space, Olam Farms, recorded a harvest loss due to flooding in Doma Local Government, Nasarawa State last month.
The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), in a statement, revealed that the Nasarawa flood incident led to severe losses of food and a $20 million rice farm investment.
They said: “This incident has resulted in a significant loss for various businesses and properties around the area.
“We recognise the contributions of OLAM FARM’s Corporate Social Responsibility (CSR) to their host communities, as well as the significance of their farm to food production and the agricultural value chain.
“We also recognise the presence of other businesses around this area stretching all the way to the banks of Rivers Niger/Benue Confluence in Kogi State that were direly affected.
“We urge the federal and affected state governments, together with relevant government agencies to promptly put in place measures capable of supporting the farm and other businesses around in their salvaging and recovery efforts”.
What needs to be done
- As major rice producers announce losses to their harvest this year due to flooding, it is inevitable that Nigeria runs the risk of higher food prices soon. Nairametrics reported that food inflation rose to 23.12% in August 2022, representing a 1.1%-point increase compared to 22.02% recorded in July 2022. This is expected to rise as local supply runs out caused by flooding to farmland.
- First, the Nigerian government must treat the victims of flooding as a national emergency. Secondly, release food stock from the national reserves, and also relax rules for importing food by implementing a temporary reduction of the 70% import duties for rice, giving temporary FX to importers, and allowing food imports through the borders, giving the free market a way to handle the reduced supply.
- Failure to do so, runs the risk of increased insecurity for Nigerians, as poverty and hardships rise for Nigerians of all social classes.
Importing rice (or other food items) will do little or NOTHING to alleviate higher food prices given the calamitous free-fall of the Naira. We will simply be importing more inflation. Furthermore, asking the CBN to provide essentially subsided foreign exchange for these ‘emergency’ importers is effectively supporting round-tripping because we know where large swathes of such cheaper CBN fix will end up. Abeg, let’s not compound the issues likely to follow in the wake of these floods with even more wrong-headed rentier policies.