The World Food Programme (WFP) spent about $99.6 million on meal vouchers and cash transfers to alleviate food insecurity in Nigeria in 2023.
Despite the considerable financial efforts by the WFP and governmental interventions, Nigeria’s battle against hunger remains daunting, with the number of food-insecure individuals soaring by 38% to 24.8 million in 2023.
The figures are according to the WFP’s 2023 annual country report for Nigeria. The report read:
- “WFP’s support to stimulate local agricultural production extends beyond programmatic activities to its operational strategy – contributing over $175 million to the economy of Nigeria’s agricultural sector. 95% of the food distributed to vulnerable people through WFP activities in conflict-affected areas was locally purchased – comprising over $6 million.
- “WFP also distributed $6 million through e-vouchers and direct cash transfers, improving the financial access to food from local markets for 1,162,723 food-insecure people living in conflict-affected areas.”
Cash transfers to hungry Nigerians gulp $682,558
Despite the planned amount, the actual spending on cash transfers was relatively low, with only $682,558 utilised from the planned $83.18 million. This underutilisation, amounting to just 0.82% of the earmarked funds, reflects a significant discrepancy between the planned and actual expenditure.
Moreover, the WFP could only disburse 85.76% of the intended funds for food vouchers, spending around $98.95 million out of the planned $115.38 million. These figures highlight the challenges in fully executing the planned financial assistance.
High transactional costs hamper cash-based transfers
The WFP’s operations encountered hurdles due to high transactional costs exacerbated by cash shortages faced in the country in 2023 as a result of the naira redesign policy. This situation necessitated a shift towards e-vouchers, with 99.3% of cash-based transfers for food assistance being transitioned to electronic platforms.
The report read:
- “WFP engaged affected communities to scale up food assistance for 1.8 million people during the lean season. The necessary scale-down prioritising conflict-affected and food-insecure populations during funding shortages was also done in consultation with affected communities. Cash shortages led to high transactional costs for cash-based transfers.
- “Therefore, to ensure that people in need continued to receive assistance, WFP transitioned 99.3% of cash-based transfers for food assistance to electronic vouchers. WFP is also pursuing the use of plugPAY to allow mass payments that flow directly from WFP to the bank accounts of people receiving assistance.
- “Beyond the optimisation of operational processes, this shift supported a reduction of financial inclusion gaps by facilitating the registration for national identification and opening of bank accounts for targeted people in need, 60% of whom were women.”
Insecurity driving intense hunger
The persistently precarious security situation in Nigeria’s northern states has severely hampered food production, leading to an alarming rise in hunger.
In 2023, 24.8 million Nigerians faced food insecurity, marking a 38% increase from the previous year. The WFP report underscored the link between insecurity and the escalating food crisis, which economic pressures and dependency on imported food commodities have further aggravated.
The report noted:
- “Despite significant investments by the Government and its partners, Nigeria grapples with severe and persisting food insecurity, now ranking second globally in terms of populations with the highest burden of a food crisis.
- “In 2023, 24.8 million Nigerians – 38% more people than in 2022 – experienced food insecurity at crisis and emergency levels. The rising scale and intensity of hunger are largely attributed to the persistently precarious and deteriorating security situation across the northern states, which has seriously impacted the food-producing capacity of the region, fuelling the increasing dependence on imported food commodities to meet domestic needs.
- “Global and domestic macroeconomic pressures have further strained the situation, considerably driving up the cost of imported food, transportation, and farm input. Consequently, food is increasingly unavailable and unaffordable for millions of Nigerians.”
The report also noted that Nigeria witnessed increased violence and supply chain disruptions, along with challenges posed by fraudulent activities and economic volatility, which intensified the country’s struggle with food insecurity.
More Insights
- The United Nations World Food Program (WFP) recently stated that it is reviewing its local food procurement. David Stevenson, WFP’s Country Director and Representative in Nigeria said that the group has limited stock of food to continue its operations and will only purchase food from local markets in Nigeria when prices become stable.
- The world bank projected in its Food security report that seven states across Northern Nigeriawill witness severe food crisis.
- Also, the Food and Agricultural Organisation (FAO)warned that around 26.5 million Nigerians will face hunger in 2024.
