Rising Hunger, Food Inflation: Need For FG, CBN To Rejig Strategy

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In their avowed determination to make Nigeria a self-sufficient entity in food production as a way of increasing food security and limiting how much foreign exchange it deploys to importation, both the fiscal and monetary authorities have increased funding for the sector since 2015. However, despite the tons of billions pumped into it, little has practically been achieved. SANYA ADEJOKUN looks at how else authorities can ensure that fewer Nigerians die of hunger while stemming rising food inflation.

AT his inaugural press conference just two days after his first appointment in 2015, Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele said the institution under his management would deploy developmental initiatives to create an enabling environment with appropriate incentives to empower innovative entrepreneurs to drive growth and development. He explained that some of the Central Bank’s developmental functions will include credit allocations and direct interventions in key sectors of the economy such as Power, Agriculture, MSME, Oil & Gas, and Health.

Specifically on agriculture, Emefiele stated that “CBN will revisit the goals and implementation of our intervention programmes in the Agricultural Sector, in order to ensure that high value addition is obtained from funds provided… Interventions in the sector will now be driven towards improving productivity in areas with high domestic demand, where opportunities exist to improve domestic supply, such as rice, fish, wheat and sugar and conservation of foreign exchange. These four commodities constitute a huge proportion of our food import bill of N1.3 trillion annually.

“The CBN would facilitate the creation of an ecosystem that will identify and link various local producers and processors with major importers of selected products. With the expected increase in local production, identified major importers would be encouraged to act as off-takers to local producers.”

He lamented that between 2009 and 2013, CBN’s Commercial Agriculture Credit Scheme (CACS) disbursed about N16.2 billion to 12 rice producers who have managed to meet about 10 per cent of national consumption. “We believe that we can scale up this amount to enable these producers meet a much higher share of our national consumption, thereby, reducing our import needs for importation of commodities such as rice. Towards this end, 60 per cent of the Commercial Agricultural Credit Scheme will now be targeted at the identified commodities, while the loan limit under the Agricultural Credit Guarantee Scheme is now increased to N50 million to expand the resources available to small agricultural projects.”

And in November 2015 at the launch of Anchor Borrowers’ Programme (ABP), Emefiele said the Bank was concerned about the huge foreign exchange spent by Nigeria importing food items that could be produced locally. Allocation of foreign exchange to the importation of items such as rice, wheat, milk and fish, among others to he stated had contributed greatly to the depletion of the nation’s foreign reserves, especially in the face of low oil revenue resulting from falling oil prices while disclosing that rising unemployment and escalating food imports prompted the CBN to shift from concentrating only on price, monetary, and financial system stability to act as a financial catalyst in specific sectors of the economy particularly agriculture, in an effort to create jobs on a mass scale, improve local food production, and conserve scarce foreign reserves.

He disclosed that ABP aims at creating economic linkages between over 600,000 smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilization of integrated mills. This, he noted, would close the gap between the levels of local rice production and domestic consumption, as well as complement the Growth Enhancement Support (GES) Scheme of the Federal Ministry of Agriculture by graduating GES farmers from subsistence farming to commercial production Accordingly, he said the CBN had set aside N40 billion from the N 220 billion Micro, Small and Medium Enterprises Development Fund for farmers at a single-digit interest rate of 9 per cent.

Aside its flagship ABP, CBN also has other agricultural intervention schemes like the N50 billion Agricultural Credit Support Scheme (ACSS), Commercial Agriculture Credit Scheme (CACS) and the Agricultural Credit Guarantee Scheme (ACCGS) which capital was recently increased from N3 billion to N50 billion.

And to further encourage farmers by making Nigerians consume their inputs, CBN collaborated with the Federal Ministry of Finance to prohibit further importation of rice, palm oil, maize and other commodities promoted under the ABP with officially sourced forex. For more than one year now, Federal Government has also ensured continued closure of southern borders to further prevent smuggling of then products into Nigeria.

Incidentally however, Nigerians have felt the impacts of these interventions rather negatively as more citizens are hungry while malnutrition continues to kill more children.

Kaduna State Primary Health Care Development Board (KADSPHCDB) recently disclosed that no fewer than 124 children have died from malnutrition in the state between January and September 2020 while another 15,329 malnourished children were being treated for the same condition in various facilities. That was aside the 2,128 that defaulted treatment and 264 remaining unrecovered.

In a report for August this year, 24,245 children with severe acute malnutrition (SAM) were admitted for treatment in 431 UNICEF supported treatment facilities in the three northeast states while 3,464 children 6-59 months were admitted in 25 facilities in the two north-west states.

Also, Action Against Hunger, an international nongovernmental organisation reported that more than half of Nigeria’s population country lives below the poverty line, and northern Nigeria suffers the world’s third highest level of chronic undernutrition among children, blaming the situation on lack of access to safe water and sanitation, rising food insecurity, the disruption of basic services due to conflict, and poor knowledge of healthy feeding practices for infants and young children. The organisation wrote that “across the three crisis-affected states of Borno, Jigawa and Yobe, 7.9 million people – out of a total population of 13 million – will need humanitarian assistance in 2020, representing an 11% increase from 2019, primarily due to rising violence and insecurity.

“The number of food-insecure people increased to 3.8 million and 1.1 million women and children are in need of immediate nutrition services or treatment for malnutrition. It is estimated that more than 1.2 million people, including 971,000 in Borno State and 244,000 in Yobe State, are in areas that are inaccessible to international humanitarian organizations.”

Nigeria hunger statistics has continued to worsen even as funding for agriculture increased. Hunger statistics for 2017 rose to 13.40%, a 1.9% increase from previous year when it was 11.50%.

Also, the Food and Agricultural Organisation (FAO) report for October/November 2020 showed that over 9.8 million people from 16 states and the Federal Capital Territory (FCT) are reported to be suffering from food insecurity in Nigeria.

Food analysis from the Agriculture Organization of the United Nations (FAO) released in the first week of November 2020 disclosed that over 9.8 million people from 16 states and FCT including Borno, Adamawa, Yobe, Benue, Gombe, Taraba, Katsina, Jigawa states are struggling with food insecurity and malnutrition. Others are “Kano, Bauchi, Plateau, Kaduna, Kebbi, Sokoto, Niger and the FCT.

Speaking at the presentation of the analysis, the FAO Representative in Nigeria and the ECOWAS, Fred Kafeero said the results of the analysis had exposed the need for urgent intervention by the government. FAO further projected that 13.9 million people may suffer from food insecurity from the affected states in 2021.

The Consumer Price Index (CPI) of National Bureau of Statistics report for September 2020 also showed food inflation on a steady rise, recording a rise from 0.66 per cent to 16.66 per cent. Rise in food inflation was due to increase in prices of bread and cereals, potatoes, yam and other tubers, meat, fish, fruits and oils and fats.

A market survey conducted by the Nigerian Tribune in the last week of October revealed an almost daily rise in food prices. For instance in Ibadan, a bag of yam flour (elubo) which sold for N130,000 two months ago now sells for N160,000, a bag of onions sold for N40,000 in August, now goes for N60,000, while a 50kg bag of rice which was formerly N29,000 is now between N35,000 and N37,000. A sachet of tomato paste is now being sold for N100 as against its retail price of N50 in August. Also, prices of varieties of vegetables are also on the high side, as prices skyrocketed between the month of August and now.

In Lagos and Port Harcourt, a bag of rice, went from N18,000 to N32,000. A bag of onions, which used to sell for N25,000, now goes for N76,000 with one piece going for N100 in most markets across the country. The price of a Mudu/Derica of beans has also gone up from N250/300 to N500 in some markets.

National President of Cocoa Farmers Association, Adeola Adegoke who spoke with a newspaper recently explained that lack of timely and adequate rainfall combined with lack of incentives from the government was chiefly responsible for the hike in price. “The truth of it is that we cannot run away from the reality of the change in our weather system. When you look at it in the last six months we have noticed a lot of paradigm shift that rain-fed agriculture is not sustainable and because of what we are seeing today coupled with the COVID restrictions that have brought lockdown which invariably affected farmers and also decreased production and productivity per most of the commodities which Cocoa is also one that has been affected and other food crops.

“What has led to this is that the amount of rainfall has reduced, the peak period that most of these products are supposed to be growing, fruiting and giving increment, the rain stopped abruptly and for two close to three months, the rain did not fall. Most of the things yam, coconut, pepper, tomatoes, vegetables God destroyed because of the excessive heat and this affected the production and the moment you see scarcity, what happens when demand is above supply? It gives room for skyrocketing of prices.

“Another area is the input when you look at it, most are produced by companies and they are imported and when the farmers go to buy it you see that the prices are just jumping and at the end of the day when you buy input such as fertiliser, herbicides fungicides at high prices — because for agriculture to be sustainable you have to make it a business, there must be profit margin, that is the only way.

He advocated the need for government to support farmers by subsidising the input since their capacity cannot absorb the input mechanism that are drivers of the food crops or other commodities.

“Infrastructure such as road networks have been so bad. For example, a farmer that is in a remote area, before you carry a bad of cocoa to the outer area you realise that you are spending about five thousand Naira, that is an extra cost. Ditto if it is another bag of vegetable, a bag of cocoyam or a bag of yam — all these if you are going to transport it at the end of the day, it must manifest when you are to sell it and that is why I believe these are carryover expenditure. When you look at it in terms of infrastructure, road, light, in fact in the urban area they are not even enjoying light not to talk of the rural areas. The health sector — how many clinics do we have in rural communities? All these are making the youths to run away from it.”

In essence, there is a need for the authorities to rethink the strategy. Federal Government should open the borders so that Nigerians can breathe more easily. Let government build more silos and continue to encourage farmers. According to an agricultural economist, within a given period of time that food importation is allowed, Federal Ministry of Agriculture should be prepared procure everything produces and by the end of the grace period, there will already be food sufficiency.

“It will essentially be like how Joseph managed the affairs of Egypt in the Bible”, the consultant said.

– Nigerian Tribune

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