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In March, at a time when inflation was eating deeply into Tina’s pockets, she started planting peppers and vegetables in a garden she made at the back of her house to cut down expenses. Food items like beans, yam flour, rice, garri and other commonly consumed foods in Nigeria are slowly becoming out of reach for the average Nigerian. Since President Bola Tinubu removed fuel subsidies in May last year, the economy has plunged and inflation has reached a 28-year high of 33.20%. Like Tina, Nigerians have started employing ways to cope with the harsh economy, finding new ways to adapt, planting crops in their backyards, and cutting down on needs and wants.
What causes inflation?
Nigeria has faced challenges with food inflation for many years, with various factors such as fluctuating oil prices, government policies, exchange rate volatility, and structural economic issues, contributing to it. Achivi.ng analysed the increase in rice prices from 1994 to 2024 and its causes. In 1994, a bag of rice was N1,800, and it rose to N2,500 in 1999 due to tax levies and the devaluation of Naira. In 2004, it increased to N4,500 due to the importation ban. In 2015, it rose to N10,000 due to global food crises and the CBN foreign exchange policy on importation. It reached N25,000 in 2019 due to border closure and N88,000 in 2024 due to depleting Naira value and the continuous ban on importation.
Inflation in Nigeria is measured by the National Bureau of Statistics using the Consumer Price Index (CPI), which tracks the average change in prices of goods and services consumed by people for day-to-day living. With the removal of fuel subsidies, the International Monetary Fund (IMF) highlights that a significant portion of Nigeria’s historical inflation can be attributed to the expansion of the money supply. When the Central Bank of Nigeria (CBN) prints excessive amounts of money, it leads to an oversupply of Naira in the market, driving prices upward. This phenomenon isn’t unique to Nigeria. According to Liz Scheltens’s analysis of inflation, the cause of inflation in the US is “too much money chasing few goods.”
The major cause of inflation is the our currency’s lack of value. As the currency weakens against major global currencies, the purchasing power of the Naira decreases, making imports more expensive. This devaluation increases production costs, which are then passed on to consumers in the form of higher prices. Keystone Bank accurately points out that this exchange rate mechanism significantly contributes to the overall inflationary pressure in the country.
It’s Time To Do Something
63% of Nigerians live in multidimensional poverty. This means that the majority of the population struggle to afford basic needs like food. Nigerians also spend an average of 54% of their total income on food items, due to their rising costs.
Everyday Nigerians, like Tina, are employing creative solutions to cope. People are cutting down expenses and removing expensive farm produce like protein from their list. Sellers are opening sealed and packaged foods, and selling in smaller quantities. Tubers like yams and potatoes are being cut into smaller pieces so people can afford them. Although, these adaptations demonstrate the resilience of Nigerians, it poses an even bigger problem of malnutrition and stunted growth and development of children.
In South Africa, urban farming initiatives gained popularity due to food inflation. Similar to Tina’s approach, people began to grow vegetables and herbs in small spaces such as balconies, rooftops, and gardens. However, there’s the question of whether or not people want to farm. Many working-class Nigerians want to be able to afford food items with their hard-earned money, without having to resort to gardening to feed. This means we must find long-lasting solutions to help manage food inflation.
What the Nigerian government has done so far is distribute trucks of rice to 36 states and the Federal Capital Territory. However, rice handouts do not go far enough to address the worsening cost of living crisis. Distributing rice or encouraging citizens to plant ugu in their gardens are plastic solutions to a much deeper problem. Nigerians do not want to be handed 5kg of rice once or twice a year, they want to be able to afford food – the most basic needs of all.
Rather than handouts, the government can create targeted subsidy programs that will enhance people’s purchasing power and nutritional status at this time. Countries with strong welfare systems like Sweden, Finland, and Norway provide various benefits to their citizens including heavily-subsidised housing, food, clothing, and even education. These subsidy programs can target certain foods items or primarily benefit low income population groups for a period of time. This is to ensure that while long-lasting reforms and policies are being made to manage food crisis, low income earners can afford to feed and nutrient deficiencies are reduced to the barest minimum.
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