How food insecurity worsens Nigeria’s cost of living crisis

Nigeria is currently grappling with a cost-of-living crisis that is further exacerbated by rising food insecurity, making basic necessities increasingly unaffordable for the average Nigerian. The recent spike in food prices, such as a bag of tomatoes soaring from 40,000 to 150,000 naira in just a month, paints a grim picture of the situation at hand. Bongo Adi, a Professor of Economics at Lagos Business School, sheds light on the underlying challenges fueling this crisis and offers insights into why the cost-of-living situation may worsen in the near future. Adi acknowledges the impact of the rainy season, which is also the planting season in Nigeria, historically leading to a rise in food prices. However, this year's challenges have been exacerbated by adverse weather conditions and international factors. The Russian invasion of Ukraine has disrupted grain exports, impacting food-dependent countries like Nigeria. Additionally, the recent Houthi rebel attack impeding movement around the Suez Canal has increased logistics costs, translating into higher import prices. Locally, the agricultural sector has faced setbacks due to escalating insecurity in key farming areas, leading to disruptions in farming activities and reduced productivity. Climatic conditions, including rising flooding, coupled with inflation-induced higher input costs, have further strained the agricultural landscape. Adi points to the need for infrastructure development, especially storage facilities, to prevent wastage and spoilage of food produce. Transitioning to the discourse on living wages and talks between labor groups and the government, Adi emphasizes the need to address the root cause of the economic challenges rather than solely focusing on increasing wages. He highlights a productivity drop across sectors, citing a decline in agricultural growth rates and the closure of manufacturing outfits. Multinational companies exiting the Nigerian market due to various economic policies further underscore the pressing need to enhance productivity rather than fixating on wage increments. Adi cautions against viewing increased wages as a panacea for the cost-of-living crisis, emphasizing the importance of tackling inflation at its core. He argues that simply injecting more money into the economy without addressing the productivity slowdown would only exacerbate existing challenges. As the country grapples with inflation and economic equilibrium, sustainable solutions that boost productivity and address structural issues are imperative for long-term economic stability. In essence, addressing Nigeria's cost-of-living crisis requires a multi-faceted approach that encompasses both local and international factors. From enhancing agricultural productivity and infrastructure to reevaluating economic policies and fostering a conducive business environment, the path to economic recovery necessitates holistic interventions that tackle the root causes of the current challenges. As Nigerians navigate the intricacies of a fragile economy, the importance of sustainable strategies geared towards long-term stability cannot be overstated.