Imagine living alone and walking into a local food market in Lagos, Nigeria’s commercial capital, to buy basic groceries for a week. In less than 15 minutes, you will find that you have spent at least 10,000 Naira (or 24 USD at the official exchange rate of 1 USD = 416 Naira).
It may seem like a small thing for privileged households, but such expenses weigh heavily on Nigeria’s 62 million working people.
The majority of Nigerian workers have to make do with a minimum monthly wage of 30,000 naira ($72). Only 17% of Nigerian workers are in jobs that pay enough to lift them out of poverty.
After factoring in rent, transport, medical bills and electricity, among others, the average Nigerian worker cannot make ends meet. This situation has been aggravated by the rising cost of living. For most Nigerians, the cost of living is around 5.3 times the average wage.
Soaring food prices are the main cause. Nigeria’s inflation rate was 15.9% in March 2022 and food prices rose by 17.2%, among the highest in Africa.
Much of the inflation in Nigeria is due to rising prices of basic foodstuffs like bread, cereals, potatoes, yams, fish, meat, oils and fats. Food prices contributed about 60% to Nigeria’s inflation in 2021.
These prices have increased for several reasons, including insecurity in the country’s food-producing areas, poor transport and storage facilities, the removal of certain food products from the list of imports eligible for currency exchange by the official windows of the Central Bank of Nigeria, the depreciation of the Naira, which led to an increase in the prices of imported food, and the closure of borders in 2019, which led to a sharp drop in food imports.
The war in Ukraine has increased upward pressure on commodity and fuel prices. This will lead to an overall increase in inflation and food prices until 2023, a sign that Nigerian workers will be badly hit in the coming months.
The rising cost of living has left Nigerian workers with a stark choice. They either spend a large part of their income on food and forego other essential needs, or they drastically reduce their food expenditure in order to afford essential services. This Hobbesian choice is worse for a single-income multi-person household, where the minimum monthly wage must be distributed among household members.
It is no wonder that the number of poor people in Nigeria is expected to increase by 95 million, or about half of the population in 2022.
Many of these poor Nigerians, including those in vulnerable jobs, would see their standard of living deteriorate precipitously. This is because Nigerians spend most of their income on food. An average Nigerian household spends about 56% of its income on food. The other three countries that spend the most on food are Kenya (46.7%), Cameroon (45.6%) and Algeria (42.5%).
To put this into context, in the US, UK, Canada and Australia, average household food expenditure is 6.4%, 8.2%, 9.1% and 9.8% respectively. income.
The more expensive food becomes, the poorer and healthier Nigerians become. The fact that Nigerian workers neither embarked on food riots nor staged mass demonstrations to protest unsustainable increases in food prices, implies that they must have found ways to deal with inflation. eating.
To maintain a decent level of food consumption and avoid becoming part of the 5 million Nigerians who suffer from hunger, households are reducing their expenditure on essential services such as health, electricity and transport. It has become common for households to turn off the electricity at night to reduce their energy bills. Many are now postponing or avoiding non-essential travel.
Workers also perform additional work. These include the operation of Uber and other shared taxis and the trading of general merchandise. They also offer services such as barbering, hair braiding, fashion design, tailoring, event planning, photography, commission sales, digital marketing, and exploring opportunities on the web. . Some workers even reduce the time spent on their regular work to devote more time to other income-generating activities.
In their attempts to cope with food inflation and the rising cost of living, some Nigerian workers have fallen prey to predatory moneylenders, or what are commonly referred to as “loan sharks”.
Taking advantage of the desperation of workers, these lenders charge exorbitant interest rates of up to 60%. Unable to repay their loans on time, many borrowers find themselves stuck with unsustainable debt.
Does the government have a role to play? Instead of the usual May Day fanfares, government officials are expected to focus on how to make food more affordable in Nigeria. A starting point is to learn how India has successfully coped with its food shortages and rising food prices.
Lessons from India
Food shortages were so severe in the 1950s and 1960s that India became the nation of the “begging bowl”.
Today, India is not only self-sufficient in food, but food is widely affordable. It has become a net food exporter.
He reversed the situation thanks to the green revolution initiated by Prime Minister Jawaharlal Nehru in the early 1960s.
This involved massive investments in rural infrastructure, pro-agricultural economic policies and land reform. India has also invested in agricultural technology, including seedlings, modern machinery, fertilizers and pesticides.
Land reform as part of the Green Revolution gave people in rural areas access to agricultural land, supported by government-provided irrigation systems, rainwater catchments and extension workers. .
India’s land reform placed a cap of 25 acres on land ownership per household. Absentee landowners with surplus land were forced to give up parts of their land to redistribute to landless farmers.
Contrary to the myth that commercial agriculture is the panacea to Nigeria’s food crisis, Indian agriculture is dominated by small and medium farmers.
Perhaps the biggest boost to food production in India is the country’s extremely cheap and extensive transportation network. Villages are connected to major cities, towns, and markets by paved roads and rail systems.
Public buses are very widespread and serve the most isolated regions of the country. With easy access to inexpensive transportation, farmers can bring their produce to the open market on a daily basis.
It’s a win-win situation for both farmers and workers. Farmers’ incomes have increased, while workers have benefited from lower food prices.
Rising rural incomes have spurred the demand for manufactured goods and in many cases led to the establishment of factories in rural communities, thereby generating employment opportunities for rural dwellers.
Small-scale farming is the solution
The Indian case has shown that the key to food security lies with small-scale producers, unlike Nigeria’s emphasis on large-scale agricultural projects that produce cash crops or turn out to be white elephants.
To alleviate food supply constraints and ultimately reduce the cost of food in Nigeria, the government should focus on building the productive capacities of smallholder farmers. This can be done by giving them access to arable land, granting them credit for the purchase of inputs, facilitating access to markets, providing irrigation and storage facilities, as well as security that insulates them from exogenous shocks.