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HUNGER IN THE LAND: Nigerians Groaning Under Severe Food Shortage

buhari caricature

July 18, (THEWILL) – A scene at the popular Ile-Epo Market in the Alimosho Local Government Area of Lagos, penultimate week, paints the picture of the harsh reality facing most Nigerians today. A huge, brown skinned man whose appearance gave him away as well-to-do had marched his equally tall but light-complexioned wife, who cowed under his angry looks to the market, both walking with such haste as to attract attention from other members of the public.

The couple stood outside a foodstuff shop, close to one of the exit points in the market that is springing up with new shops and immediately started an argument. Apparently the man suspected that his wife had misused the money he gave her to buy some food items. According to him, she came home with “only a bag of rice and some things from the N40, 000 I gave her to take to the market.”

Visibly embarrassed, the woman took time to explain herself, pointing out from the list in her hand every single item that she bought with the money. Sensing trouble as he could not believe that the man was convinced, the shopkeeper brought out his calculator and together they calculated everything.

marketNigeria

Surprisingly they both found that the lady even owed some money, about N500, for ground pepper. The man beat a hasty retreat, leaving his wife behind, while tongues began to wag at him.

“That is what we see every day,” the shopkeeper said, as the crowd dispersed. “The other day, a man dressed in a white garment, who looked like the pastor of a church, came and asked me to ground ogbono, melon, crayfish in large quantities and measure some rice and garri.

“As he ordered the items, I asked my older brother to let the man know the costs. But my brother assumed that he must be able to afford the things. By the time I finished and calculated the cost, we found out he had insufficient money. We had to reduce some of the ground stuff to sell to other customers later. We laughed when he said he would have disappeared with the stuff if he could.”

These stories are a tip of the economic crunch that many Nigerians are undergoing at present. And no less a personality than the Emir of Kano, Aminu Ado Bayero, hammered home this challenge facing Nigerians during President Muhammadu Buhari’s courtesy visit to his palace after commissioning the Kanu-Kaduna railway line and the Dangi Interchange under Bridge Road, which was constructed by the Kano State Government, on Thursday.

The Emir said, “We are delighted that you found time to visit the palace. We appreciate your gesture and we want to commend the President for the infrastructural development across the country, particularly in Kano.

“We are hoping that the President’s aides would continue to advise him on the condition and well-being of the poor masses, especially in those aspects that he will need to be informed on certain development for necessary action. This is a responsibility that we need to discharge accordingly.

“We are calling on the President to look into various departments of the Nigerian society and find ways to ameliorate the suffering and hardship experienced by the masses, especially in the areas of security and economy, particularly food and other commodities.”

Things have become so bad that even the House of Representatives, a fortnight ago, called on the Federal government to convoke a “Special Economic Roundtable” to address these challenges.

The House tasked the Federal Ministry of Commerce, Trade and Investments to devise new intervention strategies to cushion the harsh effects of economic hardship, particularly the ongoing food crisis, in the country.

The House took the resolutions, following the unanimous adoption of a motion sponsored by Shehu Kakale, Julius Ihonvbere, Mukhtar Dan-Dutse, Amiru Tukur, Amos Gwamna, Jatau Mohammed, Benjamin Mzondu, Ahmed Zanna and AbianteAwaji-Inombek.

The lawmakers stated that unemployment and underemployment affects all sectors of the economy, accounting for social pressures and general dissatisfaction.”

A visit to the market in recent times, and as a matter of fact, in the last one year, revealed that the cost of food items has increased drastically! Life has therefore become increasingly difficult for many Nigerians, especially the low-income earners, unemployed and other vulnerable people.

A market survey carried out by THEWILL showed the prices of staple food in the country, namely rice, beans and yam have gone through the roof and beyond the reach of many Nigerians in the national minimum wage bracket.

This newspaper recalls that the Nigeria Labour Congress as at June 20, 2021, said 10 states were yet to implement the N30,000 minimum wage.

The survey showed that a medium-sized cup of beans, which sold for N250 or N300, a few weeks ago is now sold for N500 or N600, while a bucket of 16 cups, locally called ‘ike’, has jumped from N4,000 to N6,000 with to N8,700 as of July 2021.

Also a ‘paint’ bucket of garri, which sold for N350 a few weeks ago, is now sold at N1,500. A tuber of yam, which used to sell for N700, is now sold for between N1,200 and N1,500. In fact, a small tuber of ‘new’ yam that has just arrived in the market sells for N1,200.

A fist-sized loaf of bread costs between N100 and N300, whereas a full loaf costs between N250 and N400 or N500, depending on the ingredient. The cost of rice, which is a common feature at parties and ceremonies, including marriages and birthdays, has risen astronomically, too.

The cost of a 50kg bag of rice is between N28, 000 and N30,000 for imported varieties as against N24, 000 or N21,000 for locally produced rice, depending on the brand and location.

Apart from foodstuff, utility bills, school fees and multi-taxes have increased and made budgeting compulsory for many families, in the process determining what to leave out and eat with scant regard for nutrition and a “balanced diet.”

Hunger, Others Fuelling Worsening Misery Index

A detailed study by THEWILL found out that hunger and unemployment are both fuelling the worsening misery index in the country.  The worsening insecurity across the country has also driven farmers away from their farms, despite the onset of the planting season. This has resulted in acute food shortage and high cost of food.

With unemployment at 33 per cent as at December 31, 2020, more Nigerians are out of job than ever.  At present over 90 million Nigerians are out of job, and still counting.  Unemployment – the worst ever – is, no doubt, hitting hard in the urban centres. Businesses are closing down, just as cash-strapped parents are unable to pay their children’s school fees.

This has worsened Nigeria’s misery index and resulted in a lower standard of living.   Although inflation has declined for three months running and currently hitting 17.75 per cent as of June, it is still above the single-digit target of the Central Bank of Nigeria.

The overall consequence is that more Nigerians are falling into the poverty trap. With the high inflation rate in the country persistently eroding incomes, not even well-paid urban dwellers are spared the horror of falling into the poverty bracket.

Penultimate weekend in Yola, the Adamawa State capital, the President of the African Development Bank (AfDB), Dr Akinwunmi Adesina, described Nigeria’s poverty index as unacceptable, saying the country has what it takes to be prosperous.

A report by SBM Intel, a geopolitical research firm, says 40 per cent of Nigerians living below poverty line reduced the number of meals and food quality in the second half of 2021 due to increase in food prices. Coupled with this are multiple taxes that are strangling small businesses burdened with unending levies, taxes, fees and extortion.

FG’s Endless, Reckless Borrowing

More worrisome is the fact that the Federal Government continues to borrow recklessly. A recent report by BudgIT says that Nigeria used 97 per cent of its revenue to service external debts in 2020, thus leading to the Federal Government living on ways and means and the Central Bank of Nigeria giving significant financial support to Abuja and the States.

As Nigerians groan under increasing public debt and increasing debt servicing, Finance Minister, Zainab Muhammed, says public debt currently at N33 trillion may hit N38 trillion by December 2021, following government’s plan to borrow N6.7 trillion in 2021. This will lead to increase in debt servicing, amid dwindling revenue, as ways and means worsen.

Between January and May this year, the Federal Government borrowed N1.8 trillion from the Central Bank of Nigeria with N680 billion interest.  In Feb 2021, DMO announced that it would convert N10 trillion “ways and means” loan into a 30-year bond. The World Bank has however warned against Nigeria’s mounting loan stock, even as public finance management lacks discipline amidst mounting profligacy.

Excess Borrowing Has Grave Consequences, Yusuf Warns 

Meanwhile, the immediate past Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr Muda Yusuf, has expressed concern over excess borrowing by the Federal Government in the midst of dwindling revenue. He observed that a large portion of the domestic borrowing was through ways and means, which has serious implications for inflation.

Ways and means is a mechanism for the government to borrow from the Central Bank under a specified credit policy which, most times, entails printing money.

Speaking at the Bi-Monthly Forum of the Finance Correspondents Association of Nigeria (FICAN) held at its national secretariat in Lagos on Thursday, as part of its capacity building programme, Yusuf, who spoke on “Nigerian economy in first half 2021 and outlook for the financial services sector,” described the Federal Government’s borrowing spree as injurious to the economy as it escalated the already high rate of inflation in the country.

He disclosed that the facility usually came at a huge cost to the taxpayer as the government paid N480 billion interest on the N1.8 trillion facility granted to it through the ways and means window between January and May 2021.

He expressed concern that government’s excess borrowing had put pressure on the apex bank to exceed the “five percent ceiling of actual government revenue for the preceding year”, specified in the CBN Act.

According to him, the fast rate of money supply has adverse effects on the people’s standard of living, which has become a source of worry to Nigerians.

“It has inflationary implications. It is not healthy for the economy because inflation erodes the value of people’s income and affects their standard of living. The value of a currency has a lot to do with poverty and welfare. We must be worried about the fast rate of money supply because inflation triggers poverty.

“An inflationary environment elevates production costs with adverse impact on corporate profitability, thereby making it increasingly difficult for businesses and corporations to meet their debt obligations to lending institutions. This translates into a significant increase in credit loss provisions with adverse impact on banks’ profitability.

“We need to caution the government against being too dependent on the CBN for financing deficits because of the high inflationary impact.  Inflation is a terrible thing. When people complain about hunger and poverty, it is because the money they have in their hands cannot buy anything much,” he said.

Weak Economic Growth Pushing More Nigerians into Poverty – NESG

Only last Friday, the Nigerian Economic Summit Group said many Nigerians were expected to fall into the poverty trap amid rising unemployment in the country.

The NESG, which is a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.

“Nigeria’s economic growth trajectory is better described as jobless and less inclusive, even in the heydays of high growth regime. While the economy recovered from recession in the fourth quarter of 2020, the unemployment rate rose to its highest level ever at 33.3 per cent in the same quarter. With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward,” the group said, noting that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.

“This corresponds to a rise in headcount poverty ratio to 44.1 per cent in 2020 from 40.1 per cent in 2019. The rising levels of unemployment and poverty are reflected in persistent insecurity and social vices, with attendant huge economic costs,” NESG said.

Urban Dwellers Now Affected – World Bank

Last month, a new World Bank report predicted that about 11 million Nigerians, mostly urban dwellers who depend on service-sector and non-farm business income, will fall into poverty as a result of the COVID-19 pandemic by 2022.

“Before the COVID-19 crisis, the poverty rate was forecast to remain virtually unchanged, with the number of poor people set to rise to 90.0 million by 2022 due to natural population growth. Yet the poverty rate is now forecast to rise to 45.2 per cent by 2022, with 100.9 million people living in poverty, ” the report titled, ‘Rising to the Challenge: Nigeria’s Covid-19 Response,’ said.

According to the report, “Simulations suggest that 10.9 million Nigerians may fall into poverty due to the COVID-19 crisis, a large share of whom are set to be urban dwellers who depend on service-sector and non-farm business incomes. Before the COVID-19 crisis, the poverty rate was forecast to remain virtually unchanged, with the number of poor people set to rise to 90.0 million by 2022 due to natural population growth.

“While poverty has traditionally been concentrated among rural households dependent on agriculture, more than one-third of those falling into poverty due to the COVID-19 crisis are projected to be urban residents, around one-third are projected to live in households whose heads work in services, and almost half are projected to live in households whose heads work in non-farm enterprises.

“Social protection programme coverage has remained low during the COVID-19 crisis. Between mid-March and July 2020, just 4.9 per cent of households had received assistance in the form of cash from any institution—including the government—and 3.6 per cent had received in-kind (non-food) assistance. While food assistance was more common, having been received by 23 per cent of households over the same period, such transfers are more likely to be received by non-poor households.

“Innovative techniques are currently being explored to target poor and vulnerable Nigerian households in the wake of COVID-19. Given the pandemic’s disproportionate impact on urban areas, where pre-pandemic poverty rates were the lowest, it is vital to better understand emerging pockets of poverty in Nigeria’s towns and cities. To this end, a poverty map using satellite and other ‘big data’ sources has been produced to estimate poverty at the ward level in Nigeria.”

The Way Out Of Current Mess

The federal and state governments must as a matter of urgency frontally confront and end the attacks on farm owners by armed herdsmen and bandits that have made farmers abandon their farms for their safety. No nation can produce food or cultivate enough farmlands under the current state of insecurity nationwide.

The current state of affairs should be a source of worry for the President Muhammadu Buhari administration which has played ethnic politics with the herdsmen crisis.

Dr. Yusuf also wants the Federal Government to prioritise its borrowing in the light of dwindling revenue, noting that up to 90 per cent of the nation’s revenue is committed to debt servicing, which he said should be a major concern to the Nigerians.

He suggested rationalisation of spending as a way out of excess borrowing, noting that borrowing to fund recurrent expenditure is inimical to economic development. He also advised the government to consider private partnership in funding projects that require huge capital outlay, as well as selling idle assets to raise funds for building infrastructure.