Nigeria moves to address rising food prices

Nigeria is set to convene a meeting of the National Food Security Council to address the challenges posed by the skyrocketing prices of essential food items in the country. The aim is to develop strategies to spur growth in sectors that have been sluggish in recent times. Kuala Masheh, the Managing Director of Babanguna, shed light on the root causes of the issue during a recent interview on CNBC Africa. One major factor contributing to the rising food prices is the low productivity in the agricultural sector, which leads to higher domestic food prices. Additionally, Nigeria heavily relies on importing key food items such as wheat and rice, which becomes more expensive when the currency depreciates. To combat these challenges effectively, Masheh emphasized the significance of empowering farmers to enhance their productivity through access to credit and training programs. By providing farmers with the necessary financial resources and knowledge, they can significantly increase their yields and contribute to stabilizing food prices in the market. However, the current level of financing in the agricultural sector falls short of what is required to support farmers across the nation. Masheh highlighted the substantial financing gap of around $40 billion needed to bolster the industry, while the credit allocation to agriculture remains remarkably low at only 3% of the GDP. Most of this credit is directed towards agro-processors rather than directly benefiting farmers, resulting in an underfunded sector that struggles to reach its full potential. He pointed out that improving access to financing is crucial for driving agricultural productivity and urged the government to create an environment that incentivizes financial institutions to invest in farmers. Masheh's insights shed light on the importance of closing the financing gap to unlock the sector's growth potential and address the root causes of rising food prices. The interview also touched upon the role of external funding in supporting agriculture, with the African Development Bank announcing a $1.5 billion food facility for Africa. This initiative aims to provide loans to 20 million farmers for seeds and fertilizers to boost food production by an estimated 38 million tons. Masheh viewed this as a positive step forward, emphasizing the need for strategic execution to maximize the impact of the funding. By leveraging private sector channels, the capital injection from the African Development Bank can catalyze further investments and create a ripple effect that generates lasting benefits for the agricultural industry. Overall, the discussion highlighted the urgent need for comprehensive measures to address the challenges faced by the agricultural sector in Nigeria and ensure food security for its population.