Why Food Prices Keep Rising in Nigeria
Food inflation has become a pressing issue in Nigeria, significantly impacting the cost of living and pushing millions of households into economic distress. Over recent years, the prices of staple foods such as rice, beans, yam, tomatoes, and garri have skyrocketed, with some items doubling or tripling in cost. For instance, the price of a basket of tomatoes surged by 320.67% from ₦547.28 in June 2023 to ₦2,302.26 in June 2024, while rice prices have climbed to as high as ₦78,000 per bag in some regions. According to the Nigerian Bureau of Statistics (NBS), food inflation reached a staggering 40.7% in 2024, the highest in 25 years. This article explores the multifaceted reasons behind the persistent rise in food prices in Nigeria, delving into economic, environmental, social, and policy-related factors, and offers insights into potential solutions.1. Insecurity and Conflict in Food-Producing Regions
One of the primary drivers of rising food prices in Nigeria is insecurity, particularly in the northern regions, which are the country’s agricultural heartlands. Over the past decade, conflicts involving Boko Haram in the North-East, banditry in the North-West, and farmer-herder clashes in the North-Central have disrupted agricultural activities. These conflicts have led to the displacement of millions of farmers, with approximately 2.6 million people displaced and 77,000 killed in the last five years alone. Farmers have abandoned their farmlands due to fear of attacks, kidnappings, or destruction of crops by armed groups or herders’ cattle.This disruption has caused a significant decline in food production. For example, staple crops like rice, beans, and tomatoes have seen price increases of 179.97%, 252.13%, and 320.67% respectively between 2023 and 2024. The reduced supply, coupled with Nigeria’s growing population, has created a demand-supply imbalance, exerting upward pressure on prices. Moreover, bandits often impose illegal levies on farmers, further discouraging agricultural activities and reducing output.
2. Rising Fuel Costs and Transportation Challenges
Fuel scarcity and rising fuel prices have significantly contributed to food inflation in Nigeria. Since February 2022, Nigeria has faced intermittent fuel shortages, exacerbated by the government’s plans to remove fuel subsidies and the importation of substandard fuel. The price of premium motor spirit (petrol) has surged from ₦389 to over ₦1,000 per litre in some areas, directly impacting transportation costs. For instance, the cost of transporting goods from Nyanya (Abuja) to Minna (Niger State) increased from ₦1,500 to ₦2,500 in 2022.As most food items are transported across long distances from rural farms to urban markets, higher fuel costs translate into increased transportation expenses, which are passed on to consumers. Posts on X have highlighted this issue, with users noting that fuel price hikes are a major driver of rising logistics costs in the agricultural value chain. The ripple effect is evident in the prices of staples like yam, rice, and vegetables, which have become unaffordable for many households.
3. Foreign Exchange Rate Volatility and Import Dependence
Nigeria’s heavy reliance on imported food items and agricultural inputs has made it vulnerable to foreign exchange (FX) rate fluctuations. The weakening of the naira has significantly increased the cost of importing essential commodities like wheat, maize, and dairy products. For example, Nigeria imported wheat worth ₦128.1 billion in the first nine months of 2021, and the cost of these imports has risen due to the naira’s depreciation. In 2024, the retail price of wheat in Abuja and Lagos was reported at ₦438.66 per kilogram, a direct result of higher import costs.The scarcity of foreign exchange, coupled with strict capital control policies, has further driven up the cost of imported goods. Importers require more naira to purchase the same quantity of goods, and these costs are inevitably passed on to consumers. The Russia-Ukraine war has also disrupted global supply chains, affecting Nigeria’s access to agricultural imports from these countries, particularly wheat and fertilizers, which has further exacerbated food price increases.
4. Climate Change and Environmental Challenges
Climate change has significantly impacted Nigeria’s agricultural productivity, contributing to food price hikes. The Nigerian Meteorological Agency (NiMet) reported deviations in rainfall patterns, with severe flooding in 2022 displacing over 2.4 million people and submerging farmlands across multiple states. This was one of the worst floods in a decade, severely disrupting crop production and leading to post-harvest losses.Additionally, pests like the tomato leafminer (Tuta absoluta), also known as tomato ebola, have wreaked havoc on tomato yields. In 2016, this pest caused an 80% reduction in Nigeria’s tomato production, leading to a 400% price surge within three months. In 2023, tomato prices rose by 363% over four months due to recurring infestations. These environmental challenges, combined with outdated farming practices and limited access to modern agricultural technologies, have reduced crop yields and driven up prices.
5. Erratic Power Supply and Infrastructure Deficiencies
Nigeria’s unreliable electricity supply has compounded the challenges in the agricultural value chain. The national grid collapsed at least five times in 2022, attributed to factors like insufficient funding, aging infrastructure, and theft of grid equipment. This erratic power supply affects food processing, storage, and preservation, leading to significant post-harvest losses. For instance, without consistent electricity, farmers and processors struggle to preserve perishable goods like tomatoes and vegetables, resulting in spoilage and reduced supply.Businesses often resort to expensive alternatives like diesel generators, which increase production costs. These costs are passed on to consumers, contributing to higher food prices. The lack of adequate storage infrastructure and poor road networks further exacerbate the problem, as food items spoil during transportation or storage, reducing available supply and driving up market prices.
6. Policy Missteps and Subsidy Removal
Government policies, particularly the abrupt removal of fuel subsidies in 2023, have had a profound impact on food prices. While removing fossil fuel subsidies is a step toward economic reform, the lack of adequate compensatory measures for low-income households has worsened the cost-of-living crisis. According to PricewaterhouseCoopers (PwC), the combination of inflation and inadequate social protection could push up to 13 million Nigerians into poverty in 2025.Additionally, the neglect of the agricultural sector since the Structural Adjustment Programme (SAP) in 1986 has weakened Nigeria’s food production capacity. Trade liberalization initially boosted agricultural exports, but its inconsistent implementation and a shift toward importing luxury goods have left the sector underfunded. The government’s focus on food imports as a solution to rising prices has further entrenched Nigeria’s reliance on foreign goods, making it susceptible to global price shocks.
7. Population Growth and Declining Food Supply
Nigeria’s rapidly growing population, estimated at over 220 million, has outpaced food production, creating a supply-demand imbalance. The decline in agricultural output, driven by insecurity, climate change, and outdated farming practices, has not kept up with the increasing demand for food. Basic economics suggests that when supply falls short of demand, prices rise. For instance, a post on X emphasized that staple foods like rice, beans, and yam have seen price increases of over 100% due to reduced supply.The government has attempted to address this by releasing grains from national reserves, but these measures have been insufficient to stabilize prices. The lack of investment in modern farming techniques, irrigation systems, and agricultural extension services has further constrained productivity, perpetuating the cycle of scarcity and high prices.
8. Hoarding and Export Practices
Some X posts have pointed to hoarding and export practices by large merchants as a contributing factor to food price increases. In 2024, Nigeria exported over 4.4 million tons of food, including maize, cassava, yam, and rice, while local markets experienced price doublings. Exporters reportedly hoard stock to create artificial scarcity, driving up domestic prices before selling abroad for higher profits in foreign currency. While these claims require further verification, they highlight a potential issue in the regulation of food exports and market practices.Potential Solutions to Curb Food Inflation
Addressing Nigeria’s food price crisis requires a multifaceted approach that tackles both immediate and long-term challenges. Below are some actionable recommendations:- Enhancing Security in Farming Communities: The government must prioritize securing agricultural regions through increased military presence, community policing, and conflict resolution mechanisms. Promoting ranching over open grazing can reduce farmer-herder clashes and encourage farmers to return to their lands.
- Investing in Agricultural Infrastructure: Improving road networks, storage facilities, and electricity supply can reduce post-harvest losses and transportation costs. Investments in cold storage and processing plants would help preserve perishable goods like tomatoes and vegetables.
- Stabilizing the Naira and Reducing Import Dependence: Strengthening the naira through sound monetary policies and promoting local production of agricultural inputs like fertilizers can reduce reliance on imports. Incentives for local wheat and rice production could also lower costs.
- Adopting Climate-Resilient Farming Practices: The government should support farmers with access to pest-resistant seeds, modern irrigation systems, and training on sustainable farming techniques. Early warning systems for floods and pest infestations can help mitigate losses.
- Subsidizing Farm Inputs and Improving Access: Subsidized fertilizers, seeds, and equipment, coupled with better distribution systems, can boost productivity. Addressing poor political will, as noted in X posts, is critical to ensuring these subsidies reach smallholder farmers.
- Regulating Exports and Market Practices: Stricter oversight of food exports and measures to prevent hoarding can stabilize local supply and prices. The government could impose temporary export restrictions during periods of scarcity.
- Promoting Public-Private Partnerships: Collaborations between the government, private sector, and international organizations can drive investment in agriculture, from mechanization to research and development.